With Iran's entry into the oil glut, it's dipped to $28 a barrel. Will probably hit $20 in a few months tbh.
OPEC can eat shit and die
OPEC can eat shit and die
BS? Oil companies were eating too good and price gouged cause they could. This correction is long overdue.
This isn't a correction. At all. It's Saudi literally trying to drive the US and others out of the market.
By reilo Go To PostOkay, semantics aside, what is it?From what I understand the bad Chinese market isn't helping matters in *any* sector.
There's also apparently an oversupply from the US market, which has managed to heroically continue producing fossil fuels in spite of the heavy hand of God Emperor Obama.
Everybody cheers lower gas, but that's short term thinking. Thousands of people are effected. Housing market is effected. Retirement accounts. Funding is effected. But hey fill up at $20 with not a care.
By PSYCH! Go To PostMust've really hurt your check damnI might not *have* a check in a couple months if this keeps up.
Thankfully I have the law degree to fall back on but that probably means a serious pay cut at least. All my experience is in oil and gas.
It has not.
Although I'm not really sure what's funny about it effecting everything I mentioned above or others that are dangerously close to not having a job.
Although I'm not really sure what's funny about it effecting everything I mentioned above or others that are dangerously close to not having a job.
By Smokey Go To PostEverybody cheers lower gas, but that's short term thinking. Thousands of people are effected. Housing market is effected. Retirement accounts. Funding is effected. But hey fill up at $20 with not a care.But cost of goods goes down because cost of delivery is hugely affected by overpriced gasoline. Like, there was a point when barrel prices were $60+ that my dad was paying $10,000/mo for a single longhaul truck per month. My dad's retirement account didn't benefit from that.
By KingGondo Go To PostI might not *have* a check in a couple months if this keeps up.What do you do? For some reason I thought you were a teacher.
Thankfully I have the law degree to fall back on but that probably means a serious pay cut at least. All my experience is in oil and gas.
By PSYCH! Go To PostWhat do you do? For some reason I thought you were a teacher.I examine title for oil and gas rights.
I figure out who owns the mineral (oil and natural gas) interests so that companies can lease those people for the rights to drill on their land.
By reilo Go To PostBut cost of goods goes down because cost of delivery is hugely affected by overpriced gasoline. Like, there was a point when barrel prices were $60+ that my dad was paying $10,000/mo for a single longhaul truck per month. My dad's retirement account didn't benefit from that.
If your dad has any kind of stock in oil, which has he probably does in one of those retirement accounts, yes it did.
Okay, he saw benefits in his retirement account, but none of those benefits were worth $10,000 in month just in gasoline costs man. Not to mention that the Great Recession followed, so yay. Good job? I honestly feel for you and everyone else's job security in that industry, but that industry has been propped up much like the housing market, and people suffer far more by high gas prices because it affects everything else negatively. Your retirement account can survive because chances are it's diversified enough in other industries which see benefits from low oil prices.
"Propped up"? As if the entire country and the entire world doesn't depend on fossil fuels to keep going.
We're telling you the reasons the market is suffering. Sure the companies get subsidies, but it takes larger forces than that to affect the price of oil that much. Societal and worldwide market forces. You make it sound like the only reason oil hasn't been this low for the last decade is because it's being "propped up" in some kind of way you have failed to specify.
We're telling you the reasons the market is suffering. Sure the companies get subsidies, but it takes larger forces than that to affect the price of oil that much. Societal and worldwide market forces. You make it sound like the only reason oil hasn't been this low for the last decade is because it's being "propped up" in some kind of way you have failed to specify.
Just cause there are people employed in one sector by Oil Companies, and that sector then does badly because it is no longer worth as much, doesn't mean the whole economy is worse off. Just the people related to that one sector.
There are literally dozens of others where everything is now cheaper, making them more profitable.
People in Transport who have been hit very hard for a very long time by the continually rising price of oil over the last 15 years. People who saw the cost double inside a decade. On their main on going expense. To them, if it ever translates at the pump, this will be the biggest boost to them in 15 years.
Which in turn means they don't have to do as many absurd driving hours, or try to speed to get through more deliveries. Which means less accidents, which means better returns for insurance companies.
That flow on effect will be felt in many industries.
Sucks for you guys in Oil, hope shit comes through for you. I believe it will, they will eventually slow down production. They all want their finite oil reserves to be worth the most that they can, so they will go back to drip feeding the entire world and driving up demand / price.
There are literally dozens of others where everything is now cheaper, making them more profitable.
People in Transport who have been hit very hard for a very long time by the continually rising price of oil over the last 15 years. People who saw the cost double inside a decade. On their main on going expense. To them, if it ever translates at the pump, this will be the biggest boost to them in 15 years.
Which in turn means they don't have to do as many absurd driving hours, or try to speed to get through more deliveries. Which means less accidents, which means better returns for insurance companies.
That flow on effect will be felt in many industries.
Sucks for you guys in Oil, hope shit comes through for you. I believe it will, they will eventually slow down production. They all want their finite oil reserves to be worth the most that they can, so they will go back to drip feeding the entire world and driving up demand / price.
By KingGondo Go To Post"Propped up"? As if the entire country and the entire world doesn't depend on fossil fuels to keep going.For years the entire oil industry had plenty of supply over demand but barrel prices kept being increased in magnitudes without rhyme or reason. To believe that oil cos didn't cash in because they could is naive at best.
We're telling you the reasons the market is suffering. Sure the companies get subsidies, but it takes larger forces than that to affect the price of oil that much. Societal and worldwide market forces. You make it sound like the only reason oil hasn't been this low for the last decade is because it's being "propped up" in some kind of way you have failed to specify.
Thankfully the price of oil isn't the be-all end-all because at the end of the day, producing from an existing well at $20/barrel is better than sitting there losing even more money by producing nothing. But new exploration and future outlays will slow *way* down.
I need to think about changing my career long-term, because this kind of uncertainty (that will only increase as time goes on and we move more and more to renewables) is taking years off my life, man.
I need to think about changing my career long-term, because this kind of uncertainty (that will only increase as time goes on and we move more and more to renewables) is taking years off my life, man.
By KingGondo Go To PostI need to think about changing my career long-term, because this kind of uncertainty (that will only increase as time goes on and we move more and more to renewables) is taking years off my life, man.Thats true. Maybe move into nuclear? :D
I'm always going to be happy when gas is cheap can't help it. It does suck for those who work in the industry it has to be really stressful right now.
By giririsss Go To PostThats true. Maybe move into nuclear? :DFail to see how those English and law degrees would transfer. Should have been an engineer. ;)
I need to do something that's transferable into different regions of the country. I do have the law degree to fall back on, so my options are better than a lot of the guys I work with.
My wife's career is going great, so if she gets a job offer in another part of the country I don't want to hold her back because I only have experience in one industry.
By reilo Go To PostFor years the entire oil industry had plenty of supply over demand but barrel prices kept being increased in magnitudes without rhyme or reason. To believe that oil cos didn't cash in because they could is naive at best.So... you're alleging collusion? Then why don't the companies all collude now to keep prices higher?
By KingGondo Go To PostSo… you're alleging collusion? Then why don't the companies all collude now to keep prices higher?
I think it's hard to say that there wasn't collusion. Particularly within regions.
Why now? because there's governmental pressure, due to the ever increasing price, on certain countries to produce more. Several suppliers are being opened up. And others are starting to compete against each other where they didn't use to challenge each other.
OPEC for e.g. used to basically set the world price because they'd set the barrels/day ... but others are basically saying, we'll produce as much as we want, you can do w/e you want. In particular, the American producers have been strongly encouraged to ramp up all their production. Which caused a rash of public PR exchanges between them and OPEC.
I mean, the OPEC mission statement is basically saying "these countries will collude to set a price"
In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.
It can be taken two ways, one, to make sure that the supply of petrol isn't interrupted and they aren't fighting petty squabbles / wars amongst themselves over control of the oil. Two, that they want to control all of the market in relation to the oil and make sure everyone is on the same page.
Of course, it's probably both, the second one hiding behind the benefits of the first.
Cynical? Sure. Some truth to it? Probably.
I want to add, the increased price of oil wasn't a 100% bad thing. It forced people to look at renewable energy with more seriousness, and governments to start putting in to place schemes to get the populace off of a reliance on oil / fossil fuel. Which bled into people thinking about the whole electricity grid, not just cars.
There were some upsides, as pie in the sky as they are.
The real test is coming now though, to see how much governments are willing to think very long term, and on the back of the cheaper oil, keep backing renewable energy funding.
There were some upsides, as pie in the sky as they are.
The real test is coming now though, to see how much governments are willing to think very long term, and on the back of the cheaper oil, keep backing renewable energy funding.
I feel bad for anyone in this sector, and I find it a little distasteful that there are those dancing on their graves because hey, fuck you ! cheap gas! as if that is really beneficial long-term to the world's economy (it isn't). I just hope you guys can ride it out till OPEC decides they've had enough and start cutting production back.
It's good that Oil is cheap on a geopolitical aspect as well for America. Our economy is doing well compared to everyone else because most countries (including mother Russia) were doing so great because their money was tied to Oil. As aggressive as Putin has been to try to take attention away from this fact, imagine the fuckery he would be getting into if he wasn't being held back by a sagging oil based economy.
Collusion? Come on like, absolutely. We've seen it time and time again within big markets where significant dollar amounts are exchanged daily and there's only a handful of stakeholders. Just look at big telecoms and banks. It's all big profit until there isn't and oil cos are finally getting to that point. This isn't something that was unforeseen or unpredictable, either. It just happened to be a slower slide rather than a crash like big banking in 2008 but the signs are usually always there in hindsight.
By reilo Go To PostCollusion? Come on like, absolutely. We've seen it time and time again within big markets where significant dollar amounts are exchanged daily and there's only a handful of stakeholders. Just look at big telecoms and banks. It's all big profit until there isn't and oil cos are finally getting to that point. This isn't something that was unforeseen or unpredictable, either. It just happened to be a slower slide rather than a crash like big banking in 2008 but the signs are usually always there in hindsight.This is relatively different though, There is a really finite amount of oil.
OPEC can just cut their production, and drive it higher again. The question is, can the OPEC nations put up with short term cash flow reduction for long term asset profitability.
By Smokey Go To PostThis isn't a correction. At all. It's Saudi literally trying to drive the US and others out of the market.
What? No it's not.
It's Saudi Arabia trying to hurt Iran by overflooding the market. Iran's sanctions lifted means there will be a steady stream of a lot of oil money coming to Iran. Saudi Arabia has to lower production in a couple of months again, simply because the strategy isn't working out and the price dropped to levels they couldn't possibly have expected (and moved on with production). Iranian oil hasn't even entered the market yet. Saudi Arabi wouldd hurt themselves too much to keep this going for an extended period of time.
By DerZuhälter Go To PostWhat? No it's not.
It's Saudi Arabia trying to hurt Iran by overflooding the market. Iran's sanctions lifted means there will be a steady stream of a lot of oil money coming to Iran. Saudi Arabia has to lower production in a couple of months again, simply because the strategy isn't working out and the price dropped to levels they couldn't possibly have expected (and moved on with production). Iranian oil hasn't even entered the market yet. Saudi Arabi wouldd hurt themselves too much to keep this going for an extended period of time.
From what i've read Saudi took the decision to increase supply two years ago (roughly) because the US and China started to become more self sufficent thus reducing the demand. Saudi figured if we over supply the market, not only will put their domestic rivals out of business but also reduce investment in alternative energy sources (why would you look to alternatives if oil is so cheap). Saudi have enough oil to outlast most and they dont give a fuck about there Kamikazee approach. Irans sanctions have been lifted but it's not exactly like they can start supplying the world economies with oil tomorrow, there's going to be significant ramp up time. The reason I think Saudi will try to keep prices as low as they can because they want more market share as long term the price of oil is going to cheaper and they dont want to have to share that oil money with as many people as they are now.
People in this thread realize this price is not sustainable, right? Saudia Arabia does not have unlimited oil. However, it does buy us time to hopefully transition more of our economy to renewables (let's hope the upcoming administration isn't blind to that fact).
Look, what the Saudis are doing is entirely unsustainable. Look at what's happened to the Riyal since the big oil drop began. They are playing a very dangerous game and could very well burn themselves badly (and perhaps already have). We know that changes to oil production and lower demand was never going to sustain $100/barrel prices anymore. That ship's sailed and it's never coming back. But sub $30 oil is absolutely not sustainable and goes far below what the price floor could ever be.
By HasphatsAnts Go To PostLook, what the Saudis are doing is entirely unsustainable. Look at what's happened to the Riyal since the big oil drop began. They are playing a very dangerous game and could very well burn themselves badly (and perhaps already have). We know that changes to oil production and lower demand was never going to sustain $100/barrel prices anymore. That ship's sailed and it's never coming back. But sub $30 oil is absolutely not sustainable and goes far below what the price floor could ever be.Around $80/barrel was the price for shale to be profitable, if not higher in some regions, so what you're saying is tantamount to saying that when traditional oil dries up, we'll have a completely sustainable economy. I would like to believe that, but I don't.
Of course what they are doing is unsustainable (and they know this) but by keeping the price as it is for as long as possible as it effectively kills the appetite for shale gas (production costs etc) and I believe they had hoped would stave of investment in renewables. That was the short term goal long term they want more market share by making it unviable for countries like Trinidad (for exmaple) to keep producing oil.
By Sharp Go To PostAround $80/barrel was the price for shale to be profitable, if not higher in some regions, so what you're saying is tantamount to saying that when traditional oil dries up, we'll have a completely sustainable economy. I would like to believe that, but I don't.
Given how market forces are moving in China and the U.S., those prices just aren't sustainable under these new demand side pressures that didn't exist 3 years ago. Granted, we will have nominal $100/barrel oil prices again by virtue of inflation, but I honestly don't believe oil will ever get back to 2012-13 levels again.
By HasphatsAnts Go To PostGiven how market forces are moving in China and the U.S., those prices just aren't sustainable under these new demand side pressures that didn't exist 3 years ago. Granted, we will have nominal $100/barrel oil prices again by virtue of inflation, but I honestly don't believe oil will ever get back to 2012-13 levels again.When it comes to oil, there is always going to be built-in demand unless we are able to run completely on renewables. And even in a mostly-renewable society, there will always be a place for oil. For example, many forms of transportation pretty much require oil (electric car batteries are much too expensive for real mass production, and are a nonstarter for things like air transportation). It's not a purely economic question of "well, consumers won't pay for it at that price," because we don't have a good substitute for it for many things. In any case, we are not currently even close to being majority-renewable, so it's not clear to me what market forces you're referring to; when cheap oil runs out, either we've moved off oil, or we see a return to those high prices.
By Sharp Go To PostWhen it comes to oil, there is always going to be built-in demand unless we are able to run completely on renewables. And even in a mostly-renewable society, there will always be a place for oil. For example, many forms of transportation pretty much require oil (electric car batteries are much too expensive for real mass production, and are a nonstarter for things like air transportation). It's not a purely economic question of "well, consumers won't pay for it at that price," because we don't have a good substitute for it for many things. In any case, we are not currently even close to being majority-renewable, so it's not clear to me what market forces you're referring to; when cheap oil runs out, either we've moved off oil, or we see a return to those high prices.
Those prices were heavily dependent on China hitting its growth targets year after year, quarter after quarter. It's becoming increasingly clear that China's slowdown is not a blip on the radar, but the result of a developing economy reaching the end of its 7-10% a year growth stage as it matures.
By HasphatsAnts Go To PostThose prices were heavily dependent on China hitting its growth targets year after year, quarter after quarter. It's becoming increasingly clear that China's slowdown is not a blip on the radar, but the result of a developing economy reaching the end of its 7-10% a year growth stage as it matures.I feel like we're talking past each other. Just to clarify: is your assertion that we will never run out of cheap oil because China hasn't hit its growth targets? Or at least, won't run out of it until we have time to transition to renewables? Because I don't see how what you said is related to what I said otherwise.
By Sharp Go To PostI feel like we're talking past each other. Just to clarify: is your assertion that we will never run out of cheap oil because China hasn't hit its growth targets? Or at least, won't run out of it until we have time to transition to renewables? Because I don't see how what you said is related to what I said otherwise.
No what you're referring to is the price inelasticity of the demand for fossil fuels, which is a commonly accepted fact. Fluctuations in supply moves the supply curve from side to side and affects equilibrium pricing without changes to equilibrium quantity, and that's what's happening to the market right now.
What I'm suggesting is that total demand will start to move left as the second largest market for fossil fuels begins to cool, so the price movement there is supply independent. What alternative energy does is that it will gradually remove the price inelasticity of oil, lessening the pricing impact of supply side changes.
It'd be easier if I can draw it out on MSPaint lol.
By HasphatsAnts Go To PostNo what you're referring to is the price inelasticity of the demand for fossil fuels, which is a commonly accepted fact. Fluctuations in supply moves the supply curve from side to side and affects equilibrium pricing without changes to equilibrium quantity, and that's what's happening to the market right now.I guess my point is that there is more to oil price than its supply. There's extraction cost, which (in general) rises over time, since companies tend to extract from the cheap spots first. So even if the market need for fossil fuels decreases, it won't necessarily lead to lower prices, because the oil producers have to stay solvent. The assumption that this won't happen is what I find dubious.
What I'm suggesting is that total demand will start to move left as the second largest market for fossil fuels begins to cool, so the price movement there is supply independent. What alternative energy does is that it will gradually remove the price inelasticity of oil, lessening the pricing impact of supply side changes.
It'd be easier if I can draw it out on MSPaint lol.
By DerZuhälter Go To PostWhat? No it's not.
It's Saudi Arabia trying to hurt Iran by overflooding the market. Iran's sanctions lifted means there will be a steady stream of a lot of oil money coming to Iran. Saudi Arabia has to lower production in a couple of months again, simply because the strategy isn't working out and the price dropped to levels they couldn't possibly have expected (and moved on with production). Iranian oil hasn't even entered the market yet. Saudi Arabi wouldd hurt themselves too much to keep this going for an extended period of time.
No, the main reason was to drive north american producers (frackers, sands, etc.) who were engaging in practices that result in higher costs per barrel than drilling out of the market because long-term that will hurt OPEC if they are allowed to hang around, develop, and get cheaper. Iran as a casualty is a nice side-effect for them, but not the primary reason for the decision.
By Enron Go To PostNo, the main reason was to drive north american producers (frackers, sands, etc.) who were engaging in practices that result in higher costs per barrel than drilling out of the market because long-term that will hurt OPEC if they are allowed to hang around, develop, and get cheaper. Iran as a casualty is a nice side-effect for them, but not the primary reason for the decision.
Dude u can't just steal the exact same point I made lol
By Kidjr Go To PostDude u can't just steal the exact same point I made lol
sorry, i stopped reading at his post and just hit QUOTE and replied before getting through the rest of the thread.
By RATHasReturned Go To PostPremium gas still $2.59 at Costco. Feel's bad man.Hasn't dropped in the East Bay yet.
try paying £0.995 per litre. We're not seeing any benefits at the pump here in the UK just yet, if ever.
By reilo Go To PostAt least your gas tax goes to making public roads drivable. The roads in SF are basura.My lady and I were driving 101 North/South over the weekend. Went as far as Windsor, you're right. Shit roads. Pot holes. Rain tore the road up.