RedScare Posted September 8, 2008 Share Posted September 8, 2008 http://www.chron.com/disp/story.mpl/front/5988709.htmlApparently, OPEC thinks the price is too low, as well.This brings up an interesting scenario. By cutting back on driving, US gasoline use has dropped, causing a 30% decline in oil prices. IF offshore drilling in the restricted areas began, more oil on the market would cause an even bigger drop. Great news, huh? Well, great for consumers, not so great for the oil companies that spent all of that money drilling deep water wells. Oil companies and OPEC do not want a return to the days of $10 oil. They would snatch up those offshore leases, and thet'd probablt look around to see if there is any oil down there (we don't know for sure that there is, or how much), but it is not the least bit certain that they'd rush in to drill if the price is soft. They would just hold the lease until the price shot up again, completely undermining the whole rush to drill.Here's something else that adds to the mix. Currently, all of the Gulf oil wells produce about 1.3 million barrels of oil per day. During Gustav, 95% of those wells were shut down. They have been slowly bringing them back online, but now that Ike is coming, most of the wells are still shut down. Even though over 1 million bpd per day of oil production has been shut down for over a week, the price of oil has dropped. This makes it clear that when we conserve oil the price drops much faster than when we just produce more.All of this figures into the mix. More efficient vehicles, plus less mileage, plus alternative energy sources all put downward pressure on oil prices. Low oil prices makes drilling less profitable. The "Drill now" chant is not as simple as it sounds. Quote Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 8, 2008 Share Posted September 8, 2008 Pretty typical end of summer dip. Quote Link to comment Share on other sites More sharing options...
musicman Posted September 8, 2008 Share Posted September 8, 2008 All of this figures into the mix. More efficient vehicles, plus less mileage, plus alternative energy sources all put downward pressure on oil prices. Low oil prices makes drilling less profitable. The "Drill now" chant is not as simple as it sounds.what alternative energy sources have put downward pressure on oil prices? Quote Link to comment Share on other sites More sharing options...
TJones Posted September 16, 2008 Share Posted September 16, 2008 (edited) $95 dipping to $92 today. Things are about to get scary for Houston again. We got a Hurricane to clean up and oil is coming down because of the Lehman Holdings thing. I think oil could go back to $70 now, whereas I didn't think it could get to $80 just a month ago. Edited September 16, 2008 by TJones Quote Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 22, 2008 Share Posted September 22, 2008 Hmmmmmmmmmmmmmmmm! $130.5/bbl, "Just when you thought you were out, they pull you back in........." Michael Corleone GFIII Quote Link to comment Share on other sites More sharing options...
Mr. Chenevert Posted October 9, 2008 Share Posted October 9, 2008 An emergency OPEC meeting to discuss how to stop falling prices? Oh my, what 3 months can do to change things...I wonder where it will bottom out?Normal summer dip my butt Quote Link to comment Share on other sites More sharing options...
westguy Posted October 9, 2008 Share Posted October 9, 2008 Everyone went bankrupt trying to pay for those exorbitant prices. OPEC is beating a dead horse. Quote Link to comment Share on other sites More sharing options...
Pumapayam Posted October 10, 2008 Share Posted October 10, 2008 (edited) Everyone went bankrupt trying to pay for those exorbitant prices. OPEC is beating a dead horse.It touched the upper 70's today during trading, who knows.Check out this quote."People have to remember oil used to trade for the longest time at $35-$40 a barrel," said Cordier, referring to prices not seen since 2004. "The consumption that we saw back then, we could see it again." Edited October 10, 2008 by Pumapayam Quote Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted October 10, 2008 Share Posted October 10, 2008 OPEC is already plotting to shut a few valves to run the price back up, and believe me it won't take long. Have you noticed any relief at the pump? The last time Oil was at this price gas was two dollars a gallon. Oil prices go up and within a few hours the pump prices go up. Oil has been dropping for weeks now, where's the relief. Keep listening to James Cordier and you will be broke, if you are optioning oil stocks. Quote Link to comment Share on other sites More sharing options...
memebag Posted October 10, 2008 Share Posted October 10, 2008 Have you noticed any relief at the pump?Yeah. I paid $3.19 for regular yesterday.See this article from yesterday (http://abcnews.go.com/Business/Economy/story?id=5997000):In just four months the average price of a gallon of gas nationwide has plummeted 78 cents to $3.39. In some places, it's even lower: In New Jersey, gas is $2.90 a gallon. In Texas, it's $2.88, and in Kansas it's a mere $2.83. Quote Link to comment Share on other sites More sharing options...
RedScare Posted October 10, 2008 Share Posted October 10, 2008 I paid $3.19 a week ago, and $3.06 yesterday. It is under $2.90 in Tomball. Too bad that's 20 miles out of my way. Quote Link to comment Share on other sites More sharing options...
sevfiv Posted October 10, 2008 Share Posted October 10, 2008 Yeah, the Texaco near me will probably be under $3 soon at this rate - and this month looks like I'll come in below my gas budget (aka target spending) for once. Quote Link to comment Share on other sites More sharing options...
Mr. Chenevert Posted October 10, 2008 Share Posted October 10, 2008 ...Have you noticed any relief at the pump?Yea, I remember just a few months ago I was paying $4.20/gallon for premium.It has dropped by about a dollar/gallon and continues to fall. Quote Link to comment Share on other sites More sharing options...
Pumapayam Posted October 10, 2008 Share Posted October 10, 2008 I paid $3.19 a week ago, and $3.06 yesterday. It is under $2.90 in Tomball. Too bad that's 20 miles out of my way.I wonder how those suckers who bought into the 3 year lock at $2.99/gallon gas deal from Chrysler feel now. It should have been $1.99 to generate real savings. Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 10, 2008 Share Posted October 10, 2008 Yea, I remember just a few months ago I was paying $4.20/gallon for premium.It has dropped by about a dollar/gallon and continues to fall.Yay! But it won't last. Quote Link to comment Share on other sites More sharing options...
Pumapayam Posted October 10, 2008 Share Posted October 10, 2008 Yay! But it won't last.You think.When we slow down, other economies, like China, do too, since we are their number one consumer.They will slow down too.Once we get out of this depression, we will see $4 gas again.I can bet we will see $2.25 gas in the coming months. Quote Link to comment Share on other sites More sharing options...
N Judah Posted October 10, 2008 Share Posted October 10, 2008 All the money that was bidding up the price of commodities has vaporized. Quote Link to comment Share on other sites More sharing options...
musicman Posted October 10, 2008 Share Posted October 10, 2008 i paid 2.99 at a shell earlier this week....clr lake shell was 3.37 this morning. robbery! Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 10, 2008 Share Posted October 10, 2008 i paid 2.99 at a shell earlier this week....clr lake shell was 3.37 this morning. robbery!The horror and outrage! I paid $3.30 over the weekend. I should have waited. Quote Link to comment Share on other sites More sharing options...
Pumapayam Posted October 10, 2008 Share Posted October 10, 2008 The horror and outrage! I paid $3.30 over the weekend. I should have waited. Yeah man, you got raped at the pump. No, actually, you did alright, that was 6 days ago. The price has been falling pennies each day. Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 10, 2008 Share Posted October 10, 2008 Yeah man, you got raped at the pump. Yeah, I hate that... Quote Link to comment Share on other sites More sharing options...
Subdude Posted October 23, 2008 Share Posted October 23, 2008 I hadn't seen that. Apparently, there are all these economist that are doing these comparisons of other types of market bubbles (stocks, housing, tech stocks, etc.) and they feel that oil is at the peak and will burst as well.They are predicting we're at the high now and therefore will burst in a few weeks.Guess time will tell huh?Hey! They were right! Oil is at about $67. The really odd thing is the negative correlation between the dollar and oil prices. Euro have absolutely plunged against dollars - the exchange rate now is 1.277. We had our economic briefing at work the other day, and economists are scratching their heads trying to figure out how the dollar can stay so strong. I'm thinking the dollar valuation is all about offsetting changes in oil prices. Producers are receiving less per barrel now, but they get paid in a currency that's worth more, and that helps ease the pain.Btw, where have all the "peak oil" and wicked speculator theorists gone? Quote Link to comment Share on other sites More sharing options...
RedScare Posted October 23, 2008 Share Posted October 23, 2008 Hey! They were right! Oil is at about $67. The really odd thing is the negative correlation between the dollar and oil prices. Euro have absolutely plunged against dollars - the exchange rate now is 1.277. We had our economic briefing at work the other day, and economists are scratching their heads trying to figure out how the dollar can stay so strong. I'm thinking the dollar valuation is all about offsetting changes in oil prices. Producers are receiving less per barrel now, but they get paid in a currency that's worth more, and that helps ease the pain.Btw, where have all the "peak oil" and wicked speculator theorists gone?Right, but not necessarily for the correct reasons. Those that predicted a worldwide recession would have been correct. Even those who predicted a drop due to a US recession would have been partially correct. Those who made the argument that the weak dollar was causing high prices, since oil is priced in dollars appear to have been largely correct.Peak oil has not been disproven. If demand slumps due to recession or increased efficiency, the price will still drop. Note that the price of oil has "slumped" to 2007 prices, hardly record lows. Prices will still strengthen next spring, and once the economy rebounds, it will jump on higher demand. As for speculators, well, live by the sword, die by the sword. Southwest and Continental Airlines got hammered by hedging at higher prices. Heating oil users in the Northeast and Midwest who locked in prices this summer in anticipation of higher winter prices got stung as well.Talk about your catch 22. One of the causes of high prices was drilling and production lagging the surging demand. The lag was due to oil producers and drillers not having enough employees or equipment to keep up with demand. Now, with the credit crisis, it is tougher to finance the equipment and capital needed to drill. The lower price will also impact the decision to drill in high cost areas. When demand returns, supply may well get pinched again. Quote Link to comment Share on other sites More sharing options...
HtownWxBoy Posted October 23, 2008 Share Posted October 23, 2008 Hey! They were right! Oil is at about $67. The really odd thing is the negative correlation between the dollar and oil prices. Euro have absolutely plunged against dollars - the exchange rate now is 1.277. We had our economic briefing at work the other day, and economists are scratching their heads trying to figure out how the dollar can stay so strong. I'm thinking the dollar valuation is all about offsetting changes in oil prices. Producers are receiving less per barrel now, but they get paid in a currency that's worth more, and that helps ease the pain.Btw, where have all the "peak oil" and wicked speculator theorists gone?The dollar is doing better compared to the Euro b/c although our economy is in a bit of trouble right now, Europe and Asia's economies are doing even worse. Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 23, 2008 Share Posted October 23, 2008 Hey! They were right! Oil is at about $67. The really odd thing is the negative correlation between the dollar and oil prices. Euro have absolutely plunged against dollars - the exchange rate now is 1.277. We had our economic briefing at work the other day, and economists are scratching their heads trying to figure out how the dollar can stay so strong. I'm thinking the dollar valuation is all about offsetting changes in oil prices. Producers are receiving less per barrel now, but they get paid in a currency that's worth more, and that helps ease the pain.Btw, where have all the "peak oil" and wicked speculator theorists gone?I am thinking they are all gone to the same place the folks that were saying India and China had all the demand for oil. Something fishy is going on.Still haven't figure it all out. Quote Link to comment Share on other sites More sharing options...
musicman Posted October 23, 2008 Share Posted October 23, 2008 at least a little bit more money will probably be put back into the economy. escalade anyone? Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 23, 2008 Share Posted October 23, 2008 at least a little bit more money will probably be put back into the economy. escalade anyone?I actually heard someone (MSNBC or maybe even Wall Street Journal This Morning ... I think) say that because gas prices have come down, we all got a raise. I understand where he was going with this, but I did NOT get a raise because gas prices dropped! I have a bit more spending money, but my salary didn't suddenly increase. Quote Link to comment Share on other sites More sharing options...
TheNiche Posted October 23, 2008 Share Posted October 23, 2008 I actually heard someone (MSNBC or maybe even Wall Street Journal This Morning ... I think) say that because gas prices have come down, we all got a raise. I understand where he was going with this, but I did NOT get a raise because gas prices dropped! I have a bit more spending money, but my salary didn't suddenly increase.Because the Dollars that you earn are worth more, the purchasing power of your earnings just increased. Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 23, 2008 Share Posted October 23, 2008 Because the Dollars that you earn are worth more, the purchasing power of your earnings just increased.Yes, I understand. But I didn't start getting PAID more. Quote Link to comment Share on other sites More sharing options...
Pumapayam Posted October 23, 2008 Share Posted October 23, 2008 Yes, I understand. But I didn't start getting PAID more.I did last week, w00t!BTW, gasbuddy has the lowest gas station in Houston a mere 17 cents away from hitting $2.Looking forward to seeing some relatively fair pricing for a change.escalade anyone?I don't think anyone will have short term memory to purchase that or Hummers anytime soon.We all know what to expect again this summer. Quote Link to comment Share on other sites More sharing options...
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