Featured Gas Prices Shrink as Inventory Swells

Interesting. Until now, I haven't had a reason to use sta-bil as my lawn grows year around and my other power equipment items were converted to battery a couple of years ago. Sta-bil is used extensively by northern (seasonal) motorcycle riders with positive results.

 

The mechanic I was working with asked "sta-bil" first thing when he saw the carb. Obviously he had seen the problem before. Problem occurred after a full season of use.

And I too had used it before in cars.

 

See, I'm conflicted. Low prices have negatively impacted oil and gas extraction in the US. From shale fracking, to shell's exploration in Alaska. All good things IMO, but then, as you mentioned, it also impacts the adoption of and use of fuel efficient and alternative vehicles.


iPhone ?

 

Its fairly massive chevron and exxon have both cut R&D by 50%, as they don't expect the price to go up much next year. Relatively it is incresing sales of lower efficiency cars and trucks, which marginally increases total fuel use and increases dependance on OPEC nations, which is exactly why saudi arabia is doing this.
Oil crash is killing more American jobs - Sep. 1, 2015
Over 50,000 jobs lost already. Note opec would not be stimulating more US oil consumption if US oil taxes were higher. These higher oil taxes might be able to lower payroll taxes which would create american jobs. As it is though the move bellow $70/bbl is probably a negative to the US. Russia and Iran, rivals to saudi when it comes to which terrorist get funded, and in oil are probably hurt worse, but this temporarily cheap oil, is likely bad for america. Our main pusher, saudi, has dropped the price to increase addiction, I don't see how that is good for the country. They will raise it again when wells are capped and demand increases.

 

I even had near $20 fill-up on my minivan, but OK the tank was not quite empty and I had 60 cents off from the grocery credits.

 

Filled up with premium yesterday at $2.29 a gallon, today, it's $2.25 a gallon. Gas goes up, gas goes down.

 

same here, but oil has been fluctuating in the 40's lately.

 

The Saudi "government" provides a massive outflow of various payments to its people historically based on the higher oil prices. Now that there is competition that sets a lower price, they need to sell more to keep the money coming in so they can fund those programs lest the populace choose another "government". At current prices, they are rapidly drawing down their reserves. That is driving the unit sales. Internal political economics.

Imagine the result if there is chaos in that country that shuts off the flow of oil. Think what a EV or even a hybrid would then be worth (said as one who sold his 4-cylinder BMW to a guy who would pay anything to retire his Cadillac during the late-70's oil crisis).

 

This is politics not economics. Saudi government has announced they have a budget deficit. I'm sure there would be a surplus if they played through. The long game is pretty clear. Hurt the independants so they cap wells, hurt the russians who back assad their enemy, hurt the iranians that are their big rivals. Boone pickens sees some of the russian involvement in the mid east as part of the mission to gain more control of the oil, and notes that though the low oil prices hurt oilmen, they are a tiny percentage of the US economy, it will has taken a little while but the 150,000 laid off because of low oil, have been outnumbered by the number employed because of cheap oil and gas. If you sell 20% more oll at $46/bbl verus $70/bbl oil, and it cost $10 to take it out of the ground, you do the math, saudi only profits only 60% at these levels. Eventually they need to cut production after they have hurt the people they want to hurt. Then they get extra profit for a couple of years as those countries slowly add back workers and oil capacity. Exxon and Chevron are betting this goes on a while longer and have cut R&D in half, and laid off a lot of workers, while picking up a lot of wells at low prices from independants that can't wait it out. What if Iran and Russia get Assad to leave and Iran stops the proxy war in Yemen? I think saudi would get OPEC to cut production. I don't think Iran and Russia are ready to play ball, but that would get saudi a lot of what it wants.

Oil blackmail has been used twice. The question is if the saudi's have the stomach to last this out long enough to use oil blackmail again. I think they need to keep over producing for 2 years, which will have the rest of opec over produce. Iraq, Venezuela, and Iran already hate the strategy. I don't know how much they want this.

Saudi has funded Al Quida, Hamas, Hezballah, ISIL, etc. Many of these terrorist organizations have caused blow back inside the kingdom. Rich members of the Royal family still fund all of these terrorist. Now that the King is dead (Abdullah) I hope the new king (Salman) does beetter. I have not seen Salman use oil blackmail or directly fund terrorism like Abdullah or Fahd before him. Salman may actually be a better monarch, and really is using oil not guns to combat Iran and Russia, in which case we should see production cuts in a way that does not cause price spikes.

 

if iran develops a nuke...

 

You mean when right? The "agreement" seems to give Iran permission to do that in 10 to 15 years. I hope the government in Saudi and Iran has changed by then. That really won't change oil prices unless they use it. I hope the US is off the OPEC oil habbit by then. Low oil prices and low oil taxes is slowing the move to north american oil independence.

1) As oil workers are laid off without decent prospects in the oil patch for years, they are going to find other jobs, and forget their training. This will slow getting the oil out of the ground.

2) Oil train and truck regulation has not improved, and infrasstructure improvements have been slowed. That means increasing oil train and oil truck accidents when the price goes up, especially from canadian oil.

3) The saudi plan to increase oil consumption appears to be working relatively. Lower mpg vehicles are being sold today versus if their were higher oil prices or fuel taxes. The highway bill was passed but without adequate funding and no increased fuel taxes, making the US government complicit in this lowering of fleet efficiency.

I fear that with demand for lower mpg vehicles the cafe regulations for 2025 will be rolled back.

 

Suspect many here follow this:


Gas Price Charts - GasBuddy.com - GasBuddy.com

 

that's a lot of hoping, but i live in hope as well.

 

It's not retracing the line from last year, is it?

 

Probably easier to see on a 3 year. Green is crude oil which was still over $100/bbl in July 2014. You can see there is some seasonality in the blue line, national gas prices. The red line shows LA prices that seem disconnected from both oil prices and national gas prices. If oil trades between $40-$55 /bbl in 2016, expect similar prices on the East coast and gulf coast. West coast with strange regulation will probably be disconnected. Midwest and dakotas, probably slightly higher prices as wells are capped, and they pay more of a market rate as the glut without cheap transportation goes away.

 

California's new cap-and-trade gasoline fees probably account for a large portion of recent deviation. See how the graphs further diverge in January when this was enacted, even if you plug in different cities in CA.

 

Unfort the CA refinery issues at the same time obscure the (hidden) CA carbon tax impact.