Gas prices falling!

[dodge_guy]

With the gas prices falling daily, I hope the oil companies are doing OK? I can`t imagine their profits are very high right now? I hope they can make it through these rough times!


:B

[TOMMY47]

Well, the original post was obviously sarcasm.
However, the Saudis are in a game of chicken with the US. They want to drive prices down so we'll stop pumping. They're taking a huge hit themselves. Good for drivers.
Anyone who buys a gas guzzler because prices are temporarily lower is nuts.
Diesel in SE Michigan seems very high still. $3.50--$4.00.

[goducks10]

2012Coleman wrote:

dodge guy wrote:
With the gas prices falling daily, I hope the oil companies are doing OK? I can`t imagine their profits are very high right now? I hope they can make it through these rough times!


:B

Are you kidding me? Oil companies make BILLIONS of dollars and prices have just started falling. I'm pretty sure thay have plenty of reserve cash on hand. Your free to donate to their relief fund though.

The Saudies again declined to reduce production, so there is a world wide glut, and consumption in the US has declined. This may be a ploitical move on their part in order to degrade rival economies that are dependant on oil revenue. While this helps the US economy as people are again buying big vechiles, the last laugh will be theirs when they decide to limit their production and drive up the price.

Bingo

[2012Coleman]

dodge guy wrote:
With the gas prices falling daily, I hope the oil companies are doing OK? I can`t imagine their profits are very high right now? I hope they can make it through these rough times!


:B

Are you kidding me? Oil companies make BILLIONS of dollars and prices have just started falling. I'm pretty sure thay have plenty of reserve cash on hand. Your free to donate to their relief fund though.

The Saudies again declined to reduce production, so there is a world wide glut, and consumption in the US has declined. This may be a ploitical move on their part in order to degrade rival economies that are dependant on oil revenue. While this helps the US economy as people are again buying big vechiles, the last laugh will be theirs when they decide to limit their production and drive up the price.

[lushy]

bukhrn wrote:

midnightsadie wrote:
guy on the stock market said the oil co, are still happy at $70. per barrel. and gas should drop to about $2.50 a gal. gas should drop to about $2.50 a gal. now if diesel would only come down, but it won,t diesel is heating oil and alot of it is used during the winter. enjoy it while its cheap it won,t last, and we,ll be headed for that $5.dollar a gal figure.

Too late, already past that, $2.43 around Richmond.

Diesel at $2.43!? :E Or are you talking about gasoline? It might be worth me taking a drive to Richmond to fill up if it's diesel. Diesel is still about $3.80+ in Chicagoland area.

(I know you're talking about gasoline, I just wish diesel was that low. 🙂 )

[Beaker]

Good thing is we get only a small percentage of our oil from international sources outside of N America.

Oil is a world wide commodity, doesn't much matter where the oil comes from.

[bukhrn]

midnightsadie wrote:
guy on the stock market said the oil co, are still happy at $70. per barrel. and gas should drop to about $2.50 a gal. gas should drop to about $2.50 a gal. now if diesel would only come down, but it won,t diesel is heating oil and alot of it is used during the winter. enjoy it while its cheap it won,t last, and we,ll be headed for that $5.dollar a gal figure.

Too late, already past that, $2.43 around Richmond.

[Caveman_Charlie]

n7bsn wrote:
OPEC is meeting, literally almost right now (I think it's tomorrow) and yes some members want to slow production and increase prices (Iran, Venezuela) But others do not (Nigeria and Saudi Arabia).
What the results will be I'm not smart enough to know. But I'm guessing that production will continue at near current levels.

The producers that want to maintain current production have number of reasons: *They can make enough money at lower prices
*The prices are low enough that fracking/tar-sands/oil-shale production may not be cost effective
*They want to reign in the military spending in Russia and Iran (current prices is costing the Russian government about $100B per year)

In the long run, consumption drives prices, but in the short run speculators can drive up the prices. Recall 2008 when world wide consumption was falling, but the speculators were driving up the futures prices. Of course when those futures matured and actual oil demand could not maintain the prices, some of the "late comers" to the oil-futures took a fleecing

I agree with this.

[paulcardoza]

SUPPLY & DEMAND..... Simple as that.

Fracking to extract shale oil deposits has taken off, resulting in a glut of crude oil supplies around the world The best news is that this has crippled the ability of OPEC to control world oil prices by throttling their output. They are in turmoil, because nothing they do will impact pricing to the extent it has in the past. Any cuts in OPEC output will have minimal effect on prices, but will directly impact their revenues, so they are unable to agree on any action.

Fracking, however, is more costly than traditional drilling. At some point, the price of oil could drop below that break-even point and we could see the whole cycle reverse itself. I've read various claims of where that break-even point is. Some say $70/bbl and others go as low as $50/bbl. No idea where the truth lies.

Let's just enjoy the lower pricing while we can.

[rockhillmanor]

Bucky Badger wrote:

rockhillmanor wrote:
Gas prices are driven by the stock market not the supplier. ....

I'd like to do some reading that production has no effect on prices. Got any?

If you don't know that gas is traded on the market and prices reflect that, then there is nothing here for you to read.

PM n7bsn he can further explain stock market 101 to you just how it all works. :W

posted By:n7bsn on 11/26/14 09:11am.......In the long run, consumption drives prices, but in the short run speculators can drive up the prices. Recall 2008 when world wide consumption was falling, but the speculators were driving up the futures prices. Of course when those futures matured and actual oil demand could not maintain the prices, some of the "late comers" to the oil-futures took a fleecing.........

[Old-Biscuit]

Prices bottomed last week and are now heading back up.

Did manage to fuel up at $2.80/gallon diesel

[n7bsn]

Locally prices stopped falling some weeks ago and some of the "price leaders" edged back up about a dime.

OPEC is meeting, literally almost right now (I think it's tomorrow) and yes some members want to slow production and increase prices (Iran, Venezuela) But others do not (Nigeria and Saudi Arabia).
What the results will be I'm not smart enough to know. But I'm guessing that production will continue at near current levels.

The producers that want to maintain current production have number of reasons: *They can make enough money at lower prices
*The prices are low enough that fracking/tar-sands/oil-shale production may not be cost effective
*They want to reign in the military spending in Russia and Iran (current prices is costing the Russian government about $100B per year)

In the long run, consumption drives prices, but in the short run speculators can drive up the prices. Recall 2008 when world wide consumption was falling, but the speculators were driving up the futures prices. Of course when those futures matured and actual oil demand could not maintain the prices, some of the "late comers" to the oil-futures took a fleecing

[wildtoad]

Never fear, the gas companies are still going to make their rather low 8% profit on the sale of gasoline.

[FlatBroke]

No sign of production slowing down in No Colo. Punching holes faster than you can count.

[rockhillmanor]

Gas prices are driven by the stock market not the supplier. Smoke and mirrors is given to the public regarding production and oil drilling, etc.

[fla-gypsy]

OPEC is already talking cutting production. Good thing is we get only a small percentage of our oil from international sources outside of N America. Thanks to new technology and renewed interest in exploration/production of new sources we are benefiting nicely. I have no issue with the oil companies making plenty of money, my 401k is partly invested in oil and while their profit margin may be down, production is running off the chart with the US becoming the major producer of oil. I say "Nice job" and keep finding new ways to get it and finding new sources!