Low gas prices

How low will it go?
How long will it stay?

How low? Who knows.

How long? Until OPEC is satisfied that US production has been sufficiently dismantled and/or ISIS has been sufficiently defunded.

I just want everyone to note that cheap gas didn't bring utopia, or roll back all those price increases supposedly driven by expensive gas.

http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_vs_Oil_Price_Chart.asp

In the Caribbean, Trinidad is being hurt badly by this since they're about as reliant on oil exports as the UAE. The rest of us are savoring the lulz at how the tables have turned

GameboyRMH wrote: How low? Who knows. How long? Until OPEC is satisfied that US production has been sufficiently dismantled and/or ISIS has been sufficiently defunded. I just want everyone to note that cheap gas didn't bring utopia, or roll back all those price increases supposedly driven by expensive gas.

"We jacked up the prices on all of our products and told them it was due to the price of fuel. lol!"

(Image removed because political, despite my intent. Just picture greedy stereotypes...)

Here, this is better:

"Oh E36 M3, fuel is cheap again! Should we lower our prices?"

"Are they still buying?"

"Yes."

"Well, raise them even higher! I need a second yacht and another villa in the Hamptons. lololololololololololol. "

(Not a political post, I searched "old white guys with cigars" and this was the first image result. Though, oddly I don't see any cigars...)

In reply to The_Jed:

Those guys aren't old either. The white part appears to be correct however.

The pic definitely has the right message anyway

Well, this is an election year, so there's that...

One thing's for sure, when expensive gas comes back, it's going to be back with a vengeance, so now's the time to buy a fuel-efficient car (or EV).

Shoot. I'm still paying almost $2/gal for diesel and gas for the blue land barge is 30 cents more then the above picture around here. E85 is still only about 15% cheaper then 87....

I paid 1.29 Sunday, cheaper than 2002.

GameboyRMH wrote: One thing's for sure, when expensive gas comes back, it's going to be back with a vengeance, so now's the time to buy a fuel-efficient car (or EV).

We have no way of knowing if that's really true or not, but if I had to make a bet, I'd be in 100% agreement with you. Definitely is the right time to pick up a fun fuel miser, 'cause my suspicion is that at some point they'll skyrocket in price. Conversely, my wife still wants a behemoth SUV. When the E36 M3 hits the fan with gas prices, Suburban/Expedition EL prices will drop like a rock and I'll grab one.

GameboyRMH wrote: I just want everyone to note that cheap gas didn't bring utopia, or roll back all those price increases supposedly driven by expensive gas.

But it sure did a number on the stock market.

CNN's Fareed Zakaria had an interesting take on what causing oil prices. This is from his Sunday show GPS. I know he's part of the "mainstream media", but I always find his point of view well thought out, and interesting:

http://www.cnn.com/videos/tv/2015/08/21/exp-gps-0823-take-oil.cnn

Klayfish wrote:

GameboyRMH wrote: One thing's for sure, when expensive gas comes back, it's going to be back with a vengeance, so now's the time to buy a fuel-efficient car (or EV).

We have no way of knowing if that's really true or not, but if I had to make a bet, I'd be in 100% agreement with you. Definitely is the right time to pick up a fun fuel miser, 'cause my suspicion is that at some point they'll skyrocket in price. Conversely, my wife still wants a behemoth SUV. When the E36 M3 hits the fan with gas prices, Suburban/Expedition EL prices will drop like a rock and I'll grab one.

I'd bet heavily on it. Gas will be even more scarce than it was before - they're not making more of it (on civilization-relevant timescales), we're not going to be using a whole lot less of it until maybe 2025~2030, production capacity will be lower than it was before, and OPEC countries will actually need the money after running a loss all of this time, so they're not going to give us a break out of the goodness of their hearts.

RealMiniParker wrote: Well, this is an election year, so there's that...

You have years that are NOT election years?

Joe Gearin wrote: CNN's Fareed Zakaria had an interesting take on what causing oil prices. This is from his Sunday show GPS. I know he's part of the "mainstream media", but I always find his point of view well thought out, and interesting: http://www.cnn.com/videos/tv/2015/08/21/exp-gps-0823-take-oil.cnn

Interesting. Seems far more researched and reasoned than I could be.
In my layman's terms, at $2 per gallon I feel okay with the price and not being taken advantage of. At $1.50 I am ecstatic. At less than $1.50, I get concerned of instability to a false and already unstable market that is Big Oil.

I run a transportation business. I estimate that I am seeing a 5% reduction in operating expenses due to cheaper gas. My concern is that those I have contracts with are going to want to renegotiate prices due to falling gas prices. My fear is they will expect a 10% price reduction sighting cheap gas while I only see a 5% reduction in real operating expenses.

When oil was expensive it became profitable to use new, more expensive technologies like fracking to get more oil. Those technologies got more efficient and cheaper through mass implementation (as tech always does.) Then the US found itself producing a record amount of crude, so much that we began exporting. Oil prices fell and OPEC got nervous so they began flooding the market. They have the resources to keep augering the price at a loss and all the US companies are going out of business.

At some point when the US industry is just about gone, Opec will tighten up supply and prices will go up. Eventually they will go up enough that it becomes profitable to extract oil here in the US, and US oil companies will proliferate again. The supply will go up vs demand and prices will come down. In an idealized model this will eventually stabilize at some price that is high enough to sustain US oil companies and not terrify OPEC.

I think in the end it will stabilize at CHEAPER prices than we've seen in the past. Why? Three reasons:

1. Technologies like fracking HAVE gotten cheaper and more efficient through the use and research that expensive oil made possible. We have proven that we have the ability and resources to be an oil supplier, and there's no reason to NOT do it if prices go that high.

2. Hungry people want to eat - all those out of work oil companies will be all-too-ready to turn the faucet back on if they can make a profit, or probably just break even. The $/barrel figure to justify their existance is lower when they're desparate.

3. Decreasing demand. Higher MPG cars are decreasing overall demand, meaning we reach comfortable supply levels quicker and decrease the frequency of shortages.

The main thing that can derail all of that is governmental intervention - that of OPEC, OUr government, or outside players like ISIS. One of the main issues could be the environmental impact of fracking, or more accurately, the public perception of it. If I were an outside force that truly wanted to screw the US on oil prices, I'd start an NGO/publicity group to seed distrust and hatred of fracking. If you scare enough consumers the government will regulate against it even if there aren't real problems, thus crippling the US ability to be oil-independent.

I'm paying under $1.25 for regular and under $1.70 for diesel these days. With enough store-credit kickbacks I've seen it under $1 easily, and I have a friend that got it down to $0.58/gal. In a household full of V8 engines, times are good!

In reply to JohnRW1621:

Speaking of, when was the last time anyone remembers the Federal Reimbursement Rate for mileage DECREASING like it did this year?

JohnRW1621 wrote:

Joe Gearin wrote: CNN's Fareed Zakaria had an interesting take on what causing oil prices. This is from his Sunday show GPS. I know he's part of the "mainstream media", but I always find his point of view well thought out, and interesting: http://www.cnn.com/videos/tv/2015/08/21/exp-gps-0823-take-oil.cnn

Interesting. Seems far more researched and reasoned than I could be. In my layman's terms, at $2 per gallon I feel okay with the price and not being taken advantage of. At $1.50 I am ecstatic. At less than $1.50, I get concerned of instability to a false and already unstable market that is Big Oil. I run a transportation business. I estimate that I am seeing a 5% reduction in operating expenses due to cheaper gas. My concern is that those I have contracts with are going to want to renegotiate prices due to falling gas prices. My fear is they will expect a 10% price reduction sighting cheap gas while I only see a 5% reduction in real operating expenses.

Agreed. Fareed tends to delve into things intelligently. I try to watch his show whenever possible. He has an outlook that is more global than national.

ultraclyde wrote: The main thing that can derail all of that is governmental intervention - that of OPEC, OUr government, or outside players like ISIS. One of the main issues could be the environmental impact of fracking, or more accurately, the public perception of it. If I were an outside force that truly wanted to screw the US on oil prices, I'd start an NGO/publicity group to seed distrust and hatred of fracking. If you scare enough consumers the government will regulate against it even if there aren't real problems, thus crippling the US ability to be oil-independent.

There are real problems though, wastewater injection associated with fracking causes earthquakes:

https://www.washingtonpost.com/national/health-science/fracking-is-not-the-cause-of-quakes-rather-its-frackings-wastewater/2015/04/27/e87a6e82-e9f4-11e4-aae1-d642717d8afa_story.html

http://earthquake.usgs.gov/research/induced/

Fracking releases methane:

https://www.texastribune.org/2015/07/07/new-study-adds-fuel-debate-fracking-and-climate/

And the effects of the industry secret mystery sauce pumped into the ground are still unknown, because it's a secret. So I wouldn't bet that fracking will be around in the long term, especially since the most prominent effect - induced earthquakes - is immediate, local, and unavoidable, unlike global warming.

I find it amusing that Big Oil is crying in their beer about crude prices under $40 a barrel. berkeley them! When gas was $4 bucks a gallon they were posting year over year record profits and it was nearly breaking the budgets of many working class stiffs. I'm enjoying the cheap gas for as long as it lasts, if some jagoff oil executives can't buy their third mansion...tough.

You know, I could care less to be honest with you. I got to be less car dependent over the last couple years anyways. Once they finish the last section of trail between the house and work, I'll be riding my bike to work and pretty much parking my car except for the weekends.

So I guess this means that we will no longer have to pay baggage fees from the airlines? hahaha. Yeah right.

In reply to GameboyRMH:

I didn't mean to imply that there weren't problems, there certainly are. Just to say that public perception of the issue has more impact on legislation than actual science. If there are environmental issues with he process they can be surmounted when the price is right.

For instance, the push would be "ban fracking, it causes earthquakes" instead of "ban wastewater injection, it causes earthquakes.

Still around 2.80-3.00 in California.