Back when gas cost $2/gallon the price of oil only contributed 50% to that or $1. The other $1 was taxes, refining costs, distribution, etc.. So if the price of oil triples the $1 becomes $3 and the total cost is now $4, only twice as much. However the price of oil now makes up over 70% of the price of gasoline.
yesterday gas in my town hit $4. Did the math on my new 30 mile commute with my 23 mpg pickup compared to a 32 mpg Mazda 3. It came out like $1.47 difference per day. With 225 work days in a year, that is enough savings to pay the new Indiana vehicle excise tax I'd get hit with on the NEW car. There would be no savings left to cover the higher insurance or interest on the loan let alone the $17k value that starts depreciating. If the '99 pickup was unreliable then other factors weigh in, but today's $1.47 is not incentive enough. Benefits of $4 gas: less traffic on I-70 in metro area and on most other roads nets me better mileage in anything I drive on almost every trip I take. Trips anywhere take less time due to less people on road. Less eratic driving going on around me making commute safer. No lines at gas stations or restaurants. I'm also able to slow down to 60 in the right lane in a 55 zone without as many other drivers acting mad about it, making me less likely to get a ticket or get beeped at. In my particular stretch I drive, there are speed traps almost every day and people doing 65 in the left lane are getting tickets in the 55 zone. Do we now need to start a thread on what will you do when gas hits $5 a gallon?
I just bought an Ezip electric bike with the *intention* of using it to commute to work a few days a week. We'll see how it goes. The business case is compelling:
Current commute: 15 miles by road in heavy traffic, almost a gallon each way, ~$7 per day Electric bike: 12 miles by bikepath, recharge each way, ~$0.04 per day for electricity, invested $384 total in buying electric bike, replace battery pack after 250 cycles for $75
Breakeven is about 65 commutes (bike pays for itself with gas savings).
Variable cost of commuting is $7 for car, $0.64 for bike (included electricity and cost of replacing batteries).
Historically for every $1 change in the price of oil gasoline prices will be affected by around 2 - 2 1/2 cents. So if oil prices go up or down by $10 then gasoline prices typically move up or down 20-25 cents. If in 2003 the price of oil was $21.53 then it contributed around 50 cents to the $1.72 you were paying at the pump. Oil prices are now 6 times higher so they probably make up around $3 of what we are paying for gasoline. We actually should be paying 20-30 cents more right now for gasoline based upon the price of oil but refiners' margins are way down.
My girlfriend this morning just mentioned how with the higher gas prices she may switch jobs to our hometown, and save 20 miles per day driving. She's a teacher and can put-in a request for any school in the district.
So people will adjust. And as the previous post said, things like this will mean less congestion, and a more pleasant environment on the road.
I will gladly pay more per gallon, for less congested roads.
Congrats !! I've got that bike and have been commuting on it daily for several months now. Some warnings:
1. The throttle wires are very tiny and not attached very well. If you let the handlebar twist too far one way and the cable tightens, you can ruin the throttle by pulling those connections loose. Best idea to avoid it: Get you some slack in the cable coming from the throttle control and use a small cable tie to make sure the end of the cable which goes into the throttle control on the handlebar cannot pull tight and stress the connections inside.
2. Watch out that the battery gets smoothly into the rackmount battery slot every time. The terminal at the bottom with the two contact points is PLASTIC and if the battery contacts somehow get off a little, you can ruin the terminal on the rack that the battery contacts. This happened to me and I had to order another terminal.
3. Buy an extra charger and charge the bike at home and at work with separate chargers, instead of hauling one charger around with you all the time. Great time saver.
4. Better to do this BEFORE your first flat: take the bike to a bike shop and let them replace your tubes with the heavy duty tubes with Slime already inside. My bike shop did both tires for about $30 and it has kept my tubes leak-free. It's no fun going out to start your ride home and finding a flat tire.
5. Get you an AirZound horn for the bike. It will get the attention of any car that does not see you or is not paying attention.
You are going to enjoy the bike. I love mine.
Anyway, those are the tips I could think of right quick. Let me know if you have any other questions. And Happy Biking !!!
Maybe the oil companies and OPEC are like drug pushers. They sell the drug cheap or give it away for free. Once the person is hooked, the dealer then jacks up the price. The junkie wants his drugs and will pay any price.
Yes that was the oil companies' strategy that they started 90 years ago. They suckered our grandparents into building a society like we have now, and aha! - they spring the trap - 90 years later! They are wascally! Next thing you know, the chocolate tycoons are going to spring their trap, and I won't be able to afford Hershey's syrup on my Bear Claw ice cream.
take the bike to a bike shop and let them replace your tubes with the heavy duty tubes with Slime already inside.
Especially true if you live in a cactus patch :shades: I did that to my tires on my bike in Hawaii. The trail to the beach was covered with bullhead thorns and my tires looked like a porcupine after one trail ride.
Ten bucks. That's all the money Rochelle Dabney had to put fuel in the voracious gas tank of her '98 Dodge Stratus, and it had to last through the long holiday weekend.
A Dodge Stratus has a voracious gas tank! Geeze, thank God she didn't have an "Elantra with an enormous appetite" or a "pig of a Prius" or a "ravenous Rabbit" or a "surfeiting Sentra!"
Last year she downsized from a Chevrolet Tahoe to a Toyota Highlander but she still sinks $55 into the tank every five days or so.
This would be like I downsized from a Cadillac Fleetwood Brougham d'Elegance to a Sedan DeVille. Shoot, if she really wanted to downsize, why didn't she get a RAV4?
Heck, these days ten bucks is only going to get you 2.5 gallons, maybe 2 2/3 at best. So it's not like it's going to last you very long, unless you're driving some ultra-high mileage subcompact or hybrid.
My first reaction to this forum is .. "well yes it does cause pain and grief, I mean c'mon consumerism in the US is still up and the Big Oil companies continue to bend us all over the pumps!" then I thought well ethere are a whole bus load of discussions going on here.
So I'm tossing my two cents into the wishing pond.
The price of oil we hear about every day is the price of OIL FUTURES, not the current price of oil being refined today and not how much oil the BIG OIL firms have in reserve or how much oil was purchased that hasn't been shipped to refineries yet.
If we go back to 2001 and look at the price of oil futures from Jan 2001 through Jan 2003 (two year window in which the "war" was initiated and the use of military vehicles on the global petroleum reserves) we would all have a slightly different view of the cost and impact to each of us.
If we go even further back to 1991 with the police action against Iraq for invading Kuwait, we see the price of oil futures were quite a bit different still. Oh yeah, Saddam set many of the oil field pumping stations on fire as retaliation for not being allowed to stay in Kuwait.
Oil futures prices actually don't affect us for three to five years, so you should anticipate paying closer to $6 to $8 per gallon in 2010. Oh and that's a lot more than your US congressman or woman is willing to tell you.
So yes prices are getting to me but there isn't alot I can do really. Except maybe go out and buy a golfcart with full body coverage and lights that will go at least 55 so I can drive fee free locally and not get squished on the road by Mr and Ms BMW or the HUMMER's. :P
I think we should all be happy that it hasn't gone up more than it has, I was expecting a national average of $4 and $4.25 in California by Memorial Day. And here it is, Memorial Day, and I am still paying "only" $4.05.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Today's WSJ reports the International Energy Agency now forecasts a coming crude shortage: 12.5 MMBOPD gap by 2015"
Even the oil execs before Congress today are saying they expect at least a 7 million barrels per day shortfall by 2015. If either comes to fruition, we can expect oil prices to at least double by then, exceeding the figure of $200/bbl that Goldman Sachs has put out there. That would entail another 50% increase in gas prices, to $6/gallon in the U.S. before taking into account ANY other factors. :surprise:
We need 100 mpg cars, like yesterday!
One thing that seems very significant to me is that everyone seems to agree that while the oil is there in the existing fields as well as new accessible places, the shortfall is in the investment needed to bring it to production. Seems like that should be a fixable problem...
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Wow... it seems no one ever asks the simple questions?
If BIG OIL are supposedly putting their record breaking profits aside for the "down market", when do they anticipate this down market? When there is no supply to meet the demand or no demand? Are they talking about the time when futures prices drop?
Futures and Pump prices are separated by at least 3 to 5 years! So it makes no sense to say they need to expand their profit to cover the prices they are paying for higher futures prices unless they know the demand will fall. Which they don't expect to happen!!
The problem with this thinking is If demand falls the overall cost to deliver will not diminish only the rate of consumption will. How the heck does that mean we need to pay more at the pump? They are simply being greedy and no-one even this congressional committee is not nailing them to the wall for it. They're just putting on a show to make it look like they're concerned.
Futures prices reflect the amount of reserves available based on the current allocations purchased 2-3 years ago, what's getting pumped out of the ground today and whats still in the ground and the delivery demand expected 3-5 years from now, not actually today!
Statistics are used to calculate this so that's why the futures prices are up, there are problems with international delivery and refinement. So why are pump prices up today if delivery is meeting the demands or if the prices paid 2 years ago are still good? Are they saying our demand is eating into current prices, NO THEY ARE NOT SAYING THIS.
Are these guys planning for when there are no fossil fuels left or when the demand is reduced solely to heating or industrial use? How does that equate to the individual consumer pump prices versus climate driven home prices?
Hey and what about the dividends these companies pay to their stock holders and board? Oh never mind...
If they manage to get Iraq back to some semblance of normal existence in, say, the next five years or so, isn't it possible that Iraqi oil production could begin to close the gap between existing production and what is needed? You always hear that Iraq has a lot of oil.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I don't quite understand how you can ever have a shortage. To estimate demand you must have a price in mind. Obviously the demand for $20/barrel oil will be considerably more than $200/barrel oil. It all you can reasonably estimate is supply and how high the price would have to go so that demand and supply are in equilibrium.
Another thing that article mentioned that didn't seem quite right was it stated these OPEC countries with the record high prices don't have any incentive to invest in more production. That implies that with low oil prices there would be an incentive to make these investments. That seems counter-intuitive to me.
Unfortunately, a 1998 Stratus isn't quite that efficient. :sick: The 2.4 4-cyl was EPA rated at 21/30, while the 2.5 V-6 was 19/28. I remember thinking it was kinda dumb to have a car that small getting that kind of economy, when the bigger Intrepid with the 2.7 was rated at 20/29.
Ten bucks probably could have gotten my '79 New Yorker 100 miles down the road. When it was brand new!
Of course, you're right, in a tight market supply = demand, I think they're saying that there's not enough oil to meet the current demand growth forecast, so something will have to give on demand. How's that happen? Continued price hikes and/or major economic downturn. I imagine some of both.
As for the Opec countries, they're making big $$ in a tight market, so they don't want to increase production and see prices fall. Say they increase production 10% and prices fall 50% - they're out $$, big time.
"Oil futures prices actually don't affect us for three to five years, so you should anticipate paying closer to $6 to $8 per gallon in 2010. Oh and that's a lot more than your US congressman or woman is willing to tell you" Man, you have really no any idea about how price of oil works. Go to the library, read some books or at least - watch Bloomberg TV everyday. For your info - price of the futures and real price are both very close. Future contract ussually - it's a contract, which will be executed in 2 ( two ) months, but not 2-5 years. Anyhow....whatever you smoke - it's cool stuff )))).
To estimate demand you must have a price in mind. Obviously the demand for $20/barrel oil will be considerably more than $200/barrel oil. It all you can reasonably estimate is supply and how high the price would have to go so that demand and supply are in equilibrium.
Yes, yes, yes!! If oil were $20/barrel demand would probably be 150M bpd, if oil is $200/barrel demand would be like 50M bpd.
If oil is cheap there are many, many people won this Earth who would use oil or use more of it. If oil is expensive people find alternatives, or have to find ways to reduce their usage.
Personal example: if oil was cheap, I wouldn't be planning on cutting a lot of firewood this year, I would burn 1000 gal instead of 200 in my furnace. Similarly with gasoline - I would be taking several trips this weekend rather than mainly staying home.
As for the Opec countries, they're making big $$ in a tight market, so they don't want to increase production and see prices fall. Say they increase production 10% and prices fall 50% - they're out $$, big time.
What's a little interesting is that in the past the OPEC ministers used to talk about a price they were comfortable with. Two years ago it was $50/barrel. Last year it was $60/barrel. Now they don't even mention it. Basically the sky's the limit as far as their concerned. As many people have pointed out it is not in OPEC's best interest for the world economy to collapse. So why are they suddenly so indifferent to oil prices doubling in one year? As I've posted before, my suspicion is that there's nothing OPEC can do about it because they are producing at or very close to their max. They don't want to admit this because that would be acknowledging that they no longer have it within their power to control the market and it might also cause somewhat of a panic situation.
"Years ago ,I heard someone invent something that made his car run on water ,well I think it's time he got it out of the cupboard and made some good money."
Doesn't New Zealand have a lot of geothermal energy?
Heat + water = steam engine
I better get out there quick so that I'm the first to patent this new steam engine invention.
Doesn't New Zealand have a lot of geothermal energy?
I don't know about New Zealand but I do know that Iceland has a lot of free geothermal energy. I believe they will use this to be one of the early countries to transition from ICE powered vehicles.
"One thing that seems very significant to me is that everyone seems to agree that while the oil is there in the existing fields as well as new accessible places, the shortfall is in the investment needed to bring it to production. Seems like that should be a fixable problem..."
When you say a fixable problem, what do you really mean by that?
The world is producing 80+ million barrels a day of crude and liquids. I have dozens of stations willing to sell me as much gasoline as I want within a few miles. I don't have a problem, is anyone else having trouble finding gasoline? :shades:
Well sure, but in the oil biz it's all about looking long-term at new exploration, then developing new production to replace resources that are tapped out.
THAT'S what they are talking about in terms of shortfall of investment. The oil companies and other national agents need to be investing more in finding and developing more oil for production.
And that's why I say it seems fixable. These nations and these oil companies (especially the oil companies with their MASSIVE MASSIVE profits) can fix the problem by investing more in their future production.
And if your intent was to pretend there is no problem, then I am with you up to a point. As more than one of these officials have said, the market is working just as it should. Americans have just been coddled by dirt-cheap oil for much too long. But at the same time, it will not work in oil companies' favor for the global economy to crash, or for a global political war to begin over securing the dwindling oil supply. They need to look out for their bottom line, yes, but part of that bottom line is developing new oil fields for the future, and increasing production to the extent possible.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Electric bike: 12 miles by bikepath, recharge each way
Electric? That's cheating. :sick:
What's wrong with a good old fashion pedal bike, especially if your commute is a 12 mile bike path?
Anyway, you're at least a few steps closer than some of these people who don't seem to realize there are other options between their gas-guzzling car and a pair of Nikes.
Could be with the rising gas prices they raised their prices and he decided that for $X he will do it himself. I used to have an electric mower many years ago. The power cord was no problem, just plug it in and mow away from the outlet. That way the cord never gets in your way.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
So do I and I have yet to experience a power outage more than 4 hours long. Yeah I know that places get hit with outages that are days long but the reality of the situation is that is rare,
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
A couple years ago Chevron discovered what appears to be a sizable oil reserve in the Gulf of Mexico (Jack 2). They had to go a couple hundred miles offshore and drill over 4 miles deep but they found it and are now developing it. It will be expensive to extract oil from this location but at $130/barrel it will be profitable. It appears these oil companies are investing in finding new sources. The cheap, low lying fruit has already been picked. Where do you suggest they go from here? Maybe there's oil on the Moon.
Over 50% of the oil the USA uses, is drilled right here in the USA. America's largest oil importer is Canada followed by Mexico. Saudi Arabia is our #4 major source of oil, but in Opec there only a few Mid East countries. Of all the oil America actually get from the Mid East, it represents less than 10% of what we use.
The real profits are made on the Crude side. In New York State, the Niagara Power Project earns an 80% profit on Electricity it generates.. nobody seems to complain.
Gasoline costs $7 - $9 a gallon all over Europe and they deal by carpooling, buying 4 cylinders, and are used to it.
In America we complain about gas, but we sure have enough money to have 250 HD channels, multiple cell phones, high speed internet, buy trendy clothes, eat out all the time, buy stuff we don't really need at wal-mart, buy cigarettes, booze, a lot of people have a regular dope budget, and so on.
America needs to figure out where their priorities are, and if we want cheaper gasoline, we can drill the 2 trillion + barrels we have in the CONUS and not pay market price of $127 a barrell.
We would be able to do like Saudi Arabia and provide it at cost - so they can sharge their people .47 cents a gallon, and Venuzuela where they charge their people .17 cents a gallon.
If we drilled all our own oil and made a Hemispheric Oil Alliance with Canada and Mexico, we never need to pay market prices, we can control costs, and we have enough oil and oil sands in the US, Canada and mexico to power 300 million cars for 300 years.
If fuel does go short like some are speculating I don't think the big problem will be the price. I'm more concerned about breakdowns in our society.
Thefts of fuel are beginning now in isolated places. An SUV holds about 25+ gal of gas. At $4 / gal that's a $100 bill for illicit uses.
A 45 or 55 or 75 mpg Prius or Volt or small Honda hybrid might be a prime target for hijackers.
INFLATION!!!! Our increasingly worthless US$ guarantees it will bite us hard. Everything we buy gets moved with a diesel powered vehicle at one time or another. The wholesalers in our society operate on pennies per dollar margin but they pay almost the entire delivery cost ...then pass it on to us.
"Well sure, but in the oil biz it's all about looking long-term at new exploration, then developing new production to replace resources that are tapped out."
They are trying, but Shell and BP lost projects in Russia. Exxon is fighting Venezuela over oil assets. Alberta and Alaska raised royalty rates. It is slowing down the production side. Everybody wants the $$$$$$$
We still have an issue with rig and worker availability in some parts. The Thunder Horse rig in the Gulf of Mexico was supposed to go on line in 2005. If things work out they should be up and running this year. TH should produce 250,000 barrels a day. That is almost twice what North Dakota produces. BUT, it has taken an extra 3 years to get things sorted out.
"THAT'S what they are talking about in terms of shortfall of investment. The oil companies and other national agents need to be investing more in finding and developing more oil for production."
I would suggest it is more a political or national problem. The oil companies are getting locked out of areas or taxes are making it cost enough that projects get delayed. Several of us have also talked about the problem in Mexico. It is not the oil companies fault. The people of Mexico will need to make an important decision. Either feed the cow or at some point the cash cow will die.
"And if your intent was to pretend there is no problem, then I am with you up to a point. As more than one of these officials have said, the market is working just as it should. Americans have just been coddled by dirt-cheap oil for much too long."
That is my basic point. People should not be in a position where a few dollars extra for gasoline is killing them. Lack of long term planning, living on the edge and zero budgeting have put people in this fix. A co-worker went to a course on buying a home. He said a number of people in the room do not budget. How does a person buy a car, let alone a house, without budgeting. There should be a law.
The problem here is that we have destabilzed Iraq so much that if we ever leave, it will just become a puppet state for Iran or it will be the center of all terrorism in the world. We have by getting rid of one tyrant opened the flood gates for a million little Saddams to come live in the very heart of Islam, in the very birthplace of Western Civilization. Now rather than being isolated in some Afghani or Yemeni desert camp these million little Saddams are now living in the center of the world.
Naaah..... heading up to Boston tomorrow - shakedown cruise in a friend's new (2 month old) BMW 530, then when I get back on Saturday, if the weather cooperates, I'll grab the kids and head down to Jersey Shore. Life's too short.
Plans are staying the same. Friends of ours are driving their family 160 miles to our house tomorrow. Saturday we're hooking up the boat and towing it 60 miles to our camper which is at a seasonal campsite on a lake. Hopefully Saturday and Sunday we'll be boating. I've got 35 gallons of cheap $3.39 gas in the boat waiting to get burned.
Actually we probably won't use much gas in the boat. Current water temps are in the 60's, so probably no watersports. Well pack a huge cooler of beer, head to our favorite sandbar (about 5 miles down the lake) hang out until the beer is gone and go back to the dock. I doubt I'll use more than 10 gallons in the boat this weekend. I'll probably spend more money on beer and brats than gas.
Comments
In May of 2003 a barrel of oil went for $21.53 (according to your link)
gas at that time hit a "record" of $1.72 per gallon
Now that a barrel of oil costs 6 times that, a gallon of gas at the same increase would be over $10 per gallon.
Benefits of $4 gas: less traffic on I-70 in metro area and on most other roads nets me better mileage in anything I drive on almost every trip I take. Trips anywhere take less time due to less people on road. Less eratic driving going on around me making commute safer. No lines at gas stations or restaurants. I'm also able to slow down to 60 in the right lane in a 55 zone without as many other drivers acting mad about it, making me less likely to get a ticket or get beeped at. In my particular stretch I drive, there are speed traps almost every day and people doing 65 in the left lane are getting tickets in the 55 zone.
Do we now need to start a thread on what will you do when gas hits $5 a gallon?
Current commute: 15 miles by road in heavy traffic, almost a gallon each way, ~$7 per day
Electric bike: 12 miles by bikepath, recharge each way, ~$0.04 per day for electricity, invested $384 total in buying electric bike, replace battery pack after 250 cycles for $75
Breakeven is about 65 commutes (bike pays for itself with gas savings).
Variable cost of commuting is $7 for car, $0.64 for bike (included electricity and cost of replacing batteries).
Let's see how it goes. :confuse:
So people will adjust. And as the previous post said, things like this will mean less congestion, and a more pleasant environment on the road.
I will gladly pay more per gallon, for less congested roads.
1. The throttle wires are very tiny and not attached very well. If you let the handlebar twist too far one way and the cable tightens, you can ruin the throttle by pulling those connections loose. Best idea to avoid it: Get you some slack in the cable coming from the throttle control and use a small cable tie to make sure the end of the cable which goes into the throttle control on the handlebar cannot pull tight and stress the connections inside.
2. Watch out that the battery gets smoothly into the rackmount battery slot every time. The terminal at the bottom with the two contact points is PLASTIC and if the battery contacts somehow get off a little, you can ruin the terminal on the rack that the battery contacts. This happened to me and I had to order another terminal.
3. Buy an extra charger and charge the bike at home and at work with separate chargers, instead of hauling one charger around with you all the time. Great time saver.
4. Better to do this BEFORE your first flat: take the bike to a bike shop and let them replace your tubes with the heavy duty tubes with Slime already inside. My bike shop did both tires for about $30 and it has kept my tubes leak-free. It's no fun going out to start your ride home and finding a flat tire.
5. Get you an AirZound horn for the bike. It will get the attention of any car that does not see you or is not paying attention.
You are going to enjoy the bike. I love mine.
Anyway, those are the tips I could think of right quick. Let me know if you have any other questions. And Happy Biking !!!
drom daycare? I guess you drive.
Especially true if you live in a cactus patch :shades: I did that to my tires on my bike in Hawaii. The trail to the beach was covered with bullhead thorns and my tires looked like a porcupine after one trail ride.
http://www.bicycletrailers.com/Burley-DLite.pro
The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009.
"We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally.
uh huh
Ten bucks. That's all the money Rochelle Dabney had to put fuel in the voracious gas tank of her '98 Dodge Stratus, and it had to last through the long holiday weekend.
A Dodge Stratus has a voracious gas tank! Geeze, thank God she didn't have an "Elantra with an enormous appetite" or a "pig of a Prius" or a "ravenous Rabbit" or a "surfeiting Sentra!"
This would be like I downsized from a Cadillac Fleetwood Brougham d'Elegance to a Sedan DeVille. Shoot, if she really wanted to downsize, why didn't she get a RAV4?
Regards,
OW
So I'm tossing my two cents into the wishing pond.
The price of oil we hear about every day is the price of OIL FUTURES, not the current price of oil being refined today and not how much oil the BIG OIL firms have in reserve or how much oil was purchased that hasn't been shipped to refineries yet.
If we go back to 2001 and look at the price of oil futures from Jan 2001 through Jan 2003 (two year window in which the "war" was initiated and the use of military vehicles on the global petroleum reserves) we would all have a slightly different view of the cost and impact to each of us.
If we go even further back to 1991 with the police action against Iraq for invading Kuwait, we see the price of oil futures were quite a bit different still. Oh yeah, Saddam set many of the oil field pumping stations on fire as retaliation for not being allowed to stay in Kuwait.
Oil futures prices actually don't affect us for three to five years, so you should anticipate paying closer to $6 to $8 per gallon in 2010. Oh and that's a lot more than your US congressman or woman is willing to tell you.
So yes prices are getting to me but there isn't alot I can do really. Except maybe go out and buy a golfcart with full body coverage and lights that will go at least 55 so I can drive fee free locally and not get squished on the road by Mr and Ms BMW or the HUMMER's. :P
I think we should all be happy that it hasn't gone up more than it has, I was expecting a national average of $4 and $4.25 in California by Memorial Day. And here it is, Memorial Day, and I am still paying "only" $4.05.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Even the oil execs before Congress today are saying they expect at least a 7 million barrels per day shortfall by 2015. If either comes to fruition, we can expect oil prices to at least double by then, exceeding the figure of $200/bbl that Goldman Sachs has put out there. That would entail another 50% increase in gas prices, to $6/gallon in the U.S. before taking into account ANY other factors. :surprise:
We need 100 mpg cars, like yesterday!
One thing that seems very significant to me is that everyone seems to agree that while the oil is there in the existing fields as well as new accessible places, the shortfall is in the investment needed to bring it to production. Seems like that should be a fixable problem...
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
If BIG OIL are supposedly putting their record breaking profits aside for the "down market", when do they anticipate this down market? When there is no supply to meet the demand or no demand? Are they talking about the time when futures prices drop?
Futures and Pump prices are separated by at least 3 to 5 years! So it makes no sense to say they need to expand their profit to cover the prices they are paying for higher futures prices unless they know the demand will fall. Which they don't expect to happen!!
The problem with this thinking is If demand falls the overall cost to deliver will not diminish only the rate of consumption will. How the heck does that mean we need to pay more at the pump? They are simply being greedy and no-one even this congressional committee is not nailing them to the wall for it. They're just putting on a show to make it look like they're concerned.
Futures prices reflect the amount of reserves available based on the current allocations purchased 2-3 years ago, what's getting pumped out of the ground today and whats still in the ground and the delivery demand expected 3-5 years from now, not actually today!
Statistics are used to calculate this so that's why the futures prices are up, there are problems with international delivery and refinement. So why are pump prices up today if delivery is meeting the demands or if the prices paid 2 years ago are still good? Are they saying our demand is eating into current prices, NO THEY ARE NOT SAYING THIS.
Are these guys planning for when there are no fossil fuels left or when the demand is reduced solely to heating or industrial use? How does that equate to the individual consumer pump prices versus climate driven home prices?
Hey and what about the dividends these companies pay to their stock holders and board? Oh never mind...
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Another thing that article mentioned that didn't seem quite right was it stated these OPEC countries with the record high prices don't have any incentive to invest in more production. That implies that with low oil prices there would be an incentive to make these investments. That seems counter-intuitive to me.
Unfortunately, a 1998 Stratus isn't quite that efficient. :sick: The 2.4 4-cyl was EPA rated at 21/30, while the 2.5 V-6 was 19/28. I remember thinking it was kinda dumb to have a car that small getting that kind of economy, when the bigger Intrepid with the 2.7 was rated at 20/29.
Ten bucks probably could have gotten my '79 New Yorker 100 miles down the road. When it was brand new!
As for the Opec countries, they're making big $$ in a tight market, so they don't want to increase production and see prices fall. Say they increase production 10% and prices fall 50% - they're out $$, big time.
Man, you have really no any idea about how price of oil works. Go to the library, read some books or at least - watch Bloomberg TV everyday. For your info - price of the futures and real price are both very close. Future contract ussually - it's a contract, which will be executed in 2 ( two ) months, but not 2-5 years.
Anyhow....whatever you smoke - it's cool stuff
Yes, yes, yes!! If oil were $20/barrel demand would probably be 150M bpd, if oil is $200/barrel demand would be like 50M bpd.
If oil is cheap there are many, many people won this Earth who would use oil or use more of it. If oil is expensive people find alternatives, or have to find ways to reduce their usage.
Personal example: if oil was cheap, I wouldn't be planning on cutting a lot of firewood this year, I would burn 1000 gal instead of 200 in my furnace. Similarly with gasoline - I would be taking several trips this weekend rather than mainly staying home.
What's a little interesting is that in the past the OPEC ministers used to talk about a price they were comfortable with. Two years ago it was $50/barrel. Last year it was $60/barrel. Now they don't even mention it. Basically the sky's the limit as far as their concerned. As many people have pointed out it is not in OPEC's best interest for the world economy to collapse. So why are they suddenly so indifferent to oil prices doubling in one year? As I've posted before, my suspicion is that there's nothing OPEC can do about it because they are producing at or very close to their max. They don't want to admit this because that would be acknowledging that they no longer have it within their power to control the market and it might also cause somewhat of a panic situation.
You're right, I think the IEA report says the same thing, in effect - OPEC can't cover the 12.5 MMBOPD of unmet demand. They're close to tapped out.
Doesn't New Zealand have a lot of geothermal energy?
Heat + water = steam engine
I better get out there quick so that I'm the first to patent this new steam engine invention.
I don't know about New Zealand but I do know that Iceland has a lot of free geothermal energy. I believe they will use this to be one of the early countries to transition from ICE powered vehicles.
When you say a fixable problem, what do you really mean by that?
The world is producing 80+ million barrels a day of crude and liquids. I have dozens of stations willing to sell me as much gasoline as I want within a few miles. I don't have a problem, is anyone else having trouble finding gasoline? :shades:
THAT'S what they are talking about in terms of shortfall of investment. The oil companies and other national agents need to be investing more in finding and developing more oil for production.
And that's why I say it seems fixable. These nations and these oil companies (especially the oil companies with their MASSIVE MASSIVE profits) can fix the problem by investing more in their future production.
And if your intent was to pretend there is no problem, then I am with you up to a point. As more than one of these officials have said, the market is working just as it should. Americans have just been coddled by dirt-cheap oil for much too long. But at the same time, it will not work in oil companies' favor for the global economy to crash, or for a global political war to begin over securing the dwindling oil supply. They need to look out for their bottom line, yes, but part of that bottom line is developing new oil fields for the future, and increasing production to the extent possible.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Electric? That's cheating. :sick:
What's wrong with a good old fashion pedal bike, especially if your commute is a 12 mile bike path?
Anyway, you're at least a few steps closer than some of these people who don't seem to realize there are other options between their gas-guzzling car and a pair of Nikes.
Think outside the box.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
So do I and I have yet to experience a power outage more than 4 hours long. Yeah I know that places get hit with outages that are days long but the reality of the situation is that is rare,
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
America's largest oil importer is Canada followed by Mexico.
Saudi Arabia is our #4 major source of oil, but in Opec there only a few Mid East countries. Of all the oil America actually get from the Mid East, it represents less than 10% of what we use.
The real profits are made on the Crude side. In New York State, the Niagara Power Project earns an 80% profit on Electricity it generates.. nobody seems to complain.
Gasoline costs $7 - $9 a gallon all over Europe and they deal by carpooling, buying 4 cylinders, and are used to it.
In America we complain about gas, but we sure have enough money to have 250 HD channels, multiple cell phones, high speed internet, buy trendy clothes, eat out all the time, buy stuff we don't really need at wal-mart, buy cigarettes, booze, a lot of people have a regular dope budget, and so on.
America needs to figure out where their priorities are, and if we want cheaper gasoline, we can drill the 2 trillion + barrels we have in the CONUS and not pay market price of $127 a barrell.
We would be able to do like Saudi Arabia and provide it at cost - so they can sharge their people .47 cents a gallon, and Venuzuela where they charge their people .17 cents a gallon.
If we drilled all our own oil and made a Hemispheric Oil Alliance with Canada and Mexico, we never need to pay market prices, we can control costs, and we have enough oil and oil sands in the US, Canada and mexico to power 300 million cars for 300 years.
Peak oil - is a scam.
Thefts of fuel are beginning now in isolated places. An SUV holds about 25+ gal of gas. At $4 / gal that's a $100 bill for illicit uses.
A 45 or 55 or 75 mpg Prius or Volt or small Honda hybrid might be a prime target for hijackers.
INFLATION!!!! Our increasingly worthless US$ guarantees it will bite us hard. Everything we buy gets moved with a diesel powered vehicle at one time or another. The wholesalers in our society operate on pennies per dollar margin but they pay almost the entire delivery cost ...then pass it on to us.
They are trying, but Shell and BP lost projects in Russia. Exxon is fighting Venezuela over oil assets. Alberta and Alaska raised royalty rates. It is slowing down the production side. Everybody wants the $$$$$$$
We still have an issue with rig and worker availability in some parts. The Thunder Horse rig in the Gulf of Mexico was supposed to go on line in 2005. If things work out they should be up and running this year. TH should produce 250,000 barrels a day. That is almost twice what North Dakota produces. BUT, it has taken an extra 3 years to get things sorted out.
"THAT'S what they are talking about in terms of shortfall of investment. The oil companies and other national agents need to be investing more in finding and developing more oil for production."
I would suggest it is more a political or national problem. The oil companies are getting locked out of areas or taxes are making it cost enough that projects get delayed. Several of us have also talked about the problem in Mexico. It is not the oil companies fault. The people of Mexico will need to make an important decision. Either feed the cow or at some point the cash cow will die.
"And if your intent was to pretend there is no problem, then I am with you up to a point. As more than one of these officials have said, the market is working just as it should. Americans have just been coddled by dirt-cheap oil for much too long."
That is my basic point. People should not be in a position where a few dollars extra for gasoline is killing them. Lack of long term planning, living on the edge and zero budgeting have put people in this fix. A co-worker went to a course on buying a home. He said a number of people in the room do not budget. How does a person buy a car, let alone a house, without budgeting. There should be a law.
There will be little or no stability IMO.
Unintended Consequences.
Actually we probably won't use much gas in the boat. Current water temps are in the 60's, so probably no watersports. Well pack a huge cooler of beer, head to our favorite sandbar (about 5 miles down the lake) hang out until the beer is gone and go back to the dock. I doubt I'll use more than 10 gallons in the boat this weekend. I'll probably spend more money on beer and brats than gas.