How low will it go?

[MP5_Rizzo]

I just purchased gas at the lowest price I've seen in years. $1.659 in Dickson county.

[Spots]

I paid $1.67 in Kingston a couple days ago.

Sent from behind the anvil

[CommsNBombs]

Gotta love diesel for 1.88 in Clarksville. I remember last winter or so when Diesel was near 4.50

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[Erik88]

A lot of domestic jobs have been lost in the oil business. I wonder if the pros outweigh the job loss?

 

We all have more expendable income each month as a result of the low prices. Using my Food City points I was able to get gas for $1.45 last week here in Lenoir City. Had I waited until Wednesday it would have been $1.30 with  the double discount.

[Spots]

A lot of domestic jobs have been lost in the oil business. I wonder if the pros outweigh the job loss?

We all have more expendable income each month as a result of the low prices. Using my Food City points I was able to get gas for $1.45 last week here in Lenoir City. Had I waited until Wednesday it would have been $1.30 with the double discount.

Just a few weeks ago I was talking to a friend who was complain about his wage cuts due to low gas prices. He works in the oil fields. Funny, he didn't complain one bit when I could barely afford to drive to work on almost $4 a gallon gas but he was making 6 figures and had an $80k diesel dually with tons of aftermarket work. When I said something he told me to find an oilfield job and quit complaining. He got the same advice, find a different job and quit complaining. Cheap gas means more money for food, entertainment, guns, hobbies, etc which is good for the economy

Sent from behind the anvil Edited December 27, 2015 by Spots

[Erik88]

Gotta love diesel for 1.88 in Clarksville. I remember last winter or so when Diesel was near 4.50

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Is Clarksville an anomaly when it comes to fuel prices? I never recall seeing it get that high and I was in FL where prices were consistently .25 higher than TN.

 

According to YCcharts.com Diesel hasn't hit $4.00 since March of 2014. Even at it's peak the nation average was no where near $4.50 and TN is typically some of the cheapest fuel in the nation.

[CommsNBombs]

Is Clarksville an anomaly when it comes to fuel prices? I never recall seeing it get that high and I was in FL where prices were consistently .25 higher than TN.

According to YCcharts.com Diesel hasn't hit $4.00 since March of 2014. Even at it's peak the nation average was no where near $4.50 and TN is typically some of the cheapest fuel in the nation.

I meant in general, out east it was near that high especially in NYC.

Clarksville is typically on the low end with certain stations like BP gouging a few dozen cents above. Its 1.88 at Dodges and near 2.33 at BP

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[nightrunner]

Just a few weeks ago I was talking to a friend who was complain about his wage cuts due to low gas prices. He works in the oil fields. Funny, he didn't complain one bit when I could barely afford to drive to work on almost $4 a gallon gas but he was making 6 figures and had an $80k diesel dually with tons of aftermarket work. When I said something he told me to find an oilfield job and quit complaining. He got the same advice, find a different job and quit complaining. Cheap gas means more money for food, entertainment, guns, hobbies, etc which is good for the economy

Sent from behind the anvil

Maybe I don't understand but why are they cutting wages instead of charging more for the oil? Is the price being kept low artificially? Usually they raise prices anytime for anything weather related or holiday driving season, but it hasn't happened lately.

[peejman]

Maybe I don't understand but why are they cutting wages instead of charging more for the oil? Is the price being kept low artificially? Usually they raise prices anytime for anything weather related or holiday driving season, but it hasn't happened lately.

It's a global market. There's various speculations as to why, I don't details other than supply is high so the price is low. Can't charge more than the market price, else the buyers will go somewhere else.

[ReeferMac]

I meant in general, out east it was near that high especially in NYC.
 

 

Ummm... As a recently former resident of Western NY, I regularly paid north of 4-bucks for regular unleaded (87 octane).

 

As of now (was JUST busting a buddies stones as I paid $1.42 to fill the wife's van @ the food city in Lenoir), folks in the country-parts of NY are paying 2.15+ per gal. NYC/Manhattan is probably double.

 

As to the question on the thread title... hang onto your hats, it's going lower. Not a good time to invest in oil (though there are some great ways to short it!)

 

- K

[runco]

Many reasons why fuel is so cheap right now.   One is the strength of the USD.  A good check on the strength is look at precious metals.  Another good reason why fuel is so cheap, supply and demand.  The market is over supply, with the US fracking industry.  That drill baby drill really did work.  However, OPEC can under cut the cost of fracking.  I recollect that fracking method costs about $40-$60 barrel to produce (actual cost + investment), anything above that is profit, but any thing less is attaching dollar bills to the barrels.  I think OPEC costs are around $18 barrel.  So OPEC can lower the cost of crude to drive out fracking, basically the walmart method of getting rid of small town businesses. 

 

According to WSJ for Thursday, Dec. 24th:

• Gold $1075.80 troy ounce
• Oil $38.12 a barrel

http://www.wsj.com/public/page/news-oil-gold-commodities.html

 

At some point in the future, the fracking industry will have to cease until crude prices rise. 

[nightrunner]

Many reasons why fuel is so cheap right now. One is the strength of the USD. A good check on the strength is look at precious metals. Another good reason why fuel is so cheap, supply and demand. The market is over supply, with the US fracking industry. That drill baby drill really did work. However, OPEC can under cut the cost of fracking. I recollect that fracking method costs about $40-$60 barrel to produce (actual cost + investment), anything above that is profit, but any thing less is attaching dollar bills to the barrels. I think OPEC costs are around $18 barrel. So OPEC can lower the cost of crude to drive out fracking, basically the walmart method of getting rid of small town businesses.

According to WSJ for Thursday, Dec. 24th:

• Gold $1075.80 troy ounce
• Oil $38.12 a barrel

http://www.wsj.com/public/page/news-oil-gold-commodities.html

At some point in the future, the fracking industry will have to cease until crude prices rise.

Whoa! I don't keep up with prices at all, but last time I went to buy some silver, gold was around $1600/oz. and gas was pretty high then if I remember correctly.

[tartanphantom]

Murphy Express 1.5 miles from me in Murfreesboro is currently posted at $1.61 for regular-- no discount or loyalty card required.

[bud]

.

Edited January 6, 2016 by bud

[Trekbike]

Many reasons why fuel is so cheap right now. One is the strength of the USD. A good check on the strength is look at precious metals. Another good reason why fuel is so cheap, supply and demand. The market is over supply, with the US fracking industry. That drill baby drill really did work. However, OPEC can under cut the cost of fracking. I recollect that fracking method costs about $40-$60 barrel to produce (actual cost + investment), anything above that is profit, but any thing less is attaching dollar bills to the barrels. I think OPEC costs are around $18 barrel. So OPEC can lower the cost of crude to drive out fracking, basically the walmart method of getting rid of small town businesses.

According to WSJ for Thursday, Dec. 24th:

• Gold $1075.80 troy ounce
• Oil $38.12 a barrel

http://www.wsj.com/public/page/news-oil-gold-commodities.html

At some point in the future, the fracking industry will have to cease until crude prices rise.

Yea, OPEC continues to flood the market to drive the frackers out of business. Once they have accomplished that, OPEC will slow the flow. One might say the fracking will start again, but I'm not sure how quickly that might happen. If it takes a capital reinvestment, some may not be eager to do that again. Edited December 28, 2015 by Trekbike

[Omega]

Yea, OPEC continues to flood the market to drive the frackers out of business.    Once they have accomplished that, OPEC will slow the flow.    One If might say, the fracking will start again, but I'm not sure how quickly that might happen.   If it takes a capital reinvestment, some may not be eager to do that again.    

When OPEC does that, we should do the same to refined gas to make up the difference.  Artificial price wars work both ways, make it hurt their domestic market too.

[SupaRice]

It's actually still pretty high if you calculate all the money and lives we've spent on babysitting the east.... that's our oil. On top of what we have here.

[No_0ne]

When OPEC does that, we should do the same to refined gas to make up the difference.  Artificial price wars work both ways, make it hurt their domestic market too.

 

I'm not exactly sure where their infrastructure is today, but at one time the Saudi's were building the largest refining operations in the world. If those facilities are online, we no longer have as much control on the prices of refined products as we once had.  I also seem to remember that refining capability has expanded many times over in other parts of the world as well.

[No_0ne]

 

At some point in the future, the fracking industry will have to cease until crude prices rise.

 

Fracking is already slowed considerably throughout the US, and the Canadian oil sands operations are in even worse shape, as their productions costs are higher than the frackers.  The oil boom states are going through a "bust" now, much like Texas went through in the 90's when gas/oil prices collapsed the last time ...

[Dolomite_supafly]

I read a report that there are tons of tankers sitting in the gulf waiting on prices to climb. I went and checked a live shipping map and there does seem to be a lot of ships not doing a lot of moving in the gulf.

[peejman]

Yea, OPEC continues to flood the market to drive the frackers out of business. Once they have accomplished that, OPEC will slow the flow. One might say the fracking will start again, but I'm not sure how quickly that might happen. If it takes a capital reinvestment, some may not be eager to do that again.

 

 

I've read that the low prices are a ploy to drive the fracting producers out of the market, and I've also read it's a way to put a pinch on the Russian economy in the hopes that Putin will take the hint and leave them alone.  I don't think he takes hints real well. 

 

 

 

I read a report that there are tons of tankers sitting in the gulf waiting on prices to climb. I went and checked a live shipping map and there does seem to be a lot of ships not doing a lot of moving in the gulf.

 

 

I've read that too.  I've also read that it's more an issue of having no storage space for the crude at the refineries, so they couldn't offload it even if they wanted to. 

[ReeferMac]

What Peejman said....

 

Take a look at Cushing, OK for US current inventory info:

 

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W

 

There is a TON of inventory floating around the world's oceans waiting for prices to improve. And the cost of operating one of those VLCC's is staggering - tells you what's at stake.

 

Prices will be going lower from here, mostly due to supply/demand - demand has cratered worldwide, and they keep pumping more b/c they need the cashflow to service debt. One day it will all go 'pop'.

 

- K
 

Edited December 28, 2015 by ReeferMac

[btq96r]

Just think, Newt Gingrich would have been good getting get gas down to $2.50.  Glad we didn't elect him!

 

 

[frankmako]

With the money saved from low gas prices you can use the saving to pay the increase in your health care increase.

[MP5_Rizzo]

 I've heard and read the reports that Mid Eastern oil producers where purposely driving the prices down to make U.S. produced petroleum unprofitable and therefore force the us out of the business and then be OPEC and Persian Gulf dependent again.  I find it hard to believe the OPEC and Persian Gulf countries would float large quantities offshore in hopes of price increase if they are purposely controlling prices.  I guess it would be interesting to know what the country of origin is of for all the crude floating in limbo.  I found some interesting information from the US Energy Information Administration. Like as in 2014, about 27% of the petroleum consumed by the United States was imported from foreign countries, the lowest level since 1985.   http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6

 

Adjusting for inflation gas prices are lower than they were in the 1970. Global economics makes my head hurt trying to figure it out  I just know I can deal with current gas prices even though my gut tells me this isn't going to be long term.