Oil nearly falls below $80 on oversupply

Tin · Oct 15, 2014

Puck it said:
I think I said major

You did, but it does not take a major hurricane to shut things down. Unless I'm misunderstanding your point then sorry.

And now for the classic BG....

BenedictGomez said:
This is more tin-foil hat stuff.

Hurricanes in the Gulf do have a disruptive impact on oil supply, and thus prices, from both an extraction standpoint as well as a large refining impact due to geographic location of US refiners.

BenedictGomez said:
Oil is a global commodity. You cant just look at one event/factor and say, "whelp, that's why gas is Up/Down".

There's many things that move the price of oil which are all occurring simultaneously, including improving/deteriorating global economies, middle east strife & war, increased/decreased production, the value of USD, geopolitical risks, weather, tax increases, the price of competing energies, refinery shutdowns, OPEC meetings, and on and on and on.....

Please, continue to educate us with all your wisdom or just admit you really don't know what you're talking about.

Puck it · Oct 15, 2014

Tin said:
You did, but it does not take a major hurricane to shut things down. Unless I'm misunderstanding your point then sorry.

I agree with your point but there has not been a Katrina that shut things down for weeks or months.

Tin · Oct 15, 2014

Puck it said:
I agree with your point but there has not been a Katrina that shut things down for weeks or months.

Understood

BenedictGomez · Oct 15, 2014

Tin said:
Please, continue to educate us with all your wisdom or just admit you really don't know what you're talking about.

Sigh..... wow, you really don't get it.

I don't know why I'm bothering, but try this next pairing on for size to see if you can understand (though frankly I'm not confident you even want to understand).

Every wild swordfish that ends up on your dinner plate came from the ocean, but not every wild swordfish on your dinner plate necessarily came from the Atlantic ocean.

Every disruption to oil supply & demand is a factor that ultimately effects the price, but not every factor can be unilaterally blamed for 100% of that swing, up or down.

It's. Not. Complicated.

Puck it · Oct 15, 2014

BenedictGomez said:
Sigh..... wow, you really don't get it.

I don't know why I'm bothering, but try this next pairing on for size to see if you can understand (though frankly I'm not confident you even want to understand).

Every wild swordfish that ends up on your dinner plate came from the ocean, but not every wild swordfish on your dinner plate necessarily came from the Atlantic ocean.

Every disruption to oil supply & demand is a factor that ultimately effects the price, but not every factor can be unilaterally blamed for 100% of that swing, up or down.

It's. Not. Complicated.

I thought my point was that we can ski more if the price of gas down. Silly me!!!!!

Tin · Oct 15, 2014

BenedictGomez said:
$2.89 in NJ as of a few days ago, might be a touch lower now.

This is more tin-foil hat stuff.

Hurricanes in the Gulf do have a disruptive impact on oil supply, and thus prices, from both an extraction standpoint as well as a large refining impact due to geographic location of US refiners.

So a single system in the Gulf can cause a price spike?

BenedictGomez · Oct 15, 2014

Puck it said:
I thought my point was that we can ski more if the price of gas down. Silly me!!!!!

Back of the envelope it will save me ~$22 per ski trip to VT. Not bad I guess, but nothing major.

That's said, it could possibly have a BIG effect on people willing to travel to VT and NH to ski. There is nothing more economically irrational that human behavior & response to gasoline prices.

BenedictGomez · Oct 15, 2014

Tin said:
So a single system in the Gulf can cause a price spike?

Will it be a factor in pricing? Yes.
Can it cause a price spike? Yes.
Will it most likely cause a price spike? Yes.
Does it have to cause a price spike? No.

Again, it's a global commodity.

If, for instance, the "single system in the gulf" happens and OPEC immediately announces it's boosting production by X% to specifically offset that decrease from the market disruption, then no, you're not going to see a price spike.

x10003q · Oct 15, 2014

Costco in Edison, NJ - 2.65 for RUG today

Puck it · Oct 15, 2014

BenedictGomez said:
Back of the envelope it will save me ~$22 per ski trip to VT. Not bad I guess, but nothing major.

That's said, it could possibly have a BIG effect on people willing to travel to VT and NH to ski. There is nothing more economically irrational that human behavior & response to gasoline prices.

$80 a barrel should get to around $2.5 a gallon. That is a about $10 savings roundtrip. I will take it.

Debbie downer!!!

Scruffy · Oct 15, 2014

It's important to note too, that crude and the products refined from it, are separate commodities, and thus the down turn price of one may not be immediately reflected in the price of the other. The lower price of gasoline right now, has a lot to do with decreased demand.

Puck it · Oct 15, 2014

Scruffy said:
It's important to note too, that crude and the products refined from it, are separate commodities, and thus the down turn price of one may not be immediately reflected in the price of the other. The lower price of gasoline right now, has a lot to do with decreased demand.

Thus an oversupply of crude.

Domeskier · Oct 15, 2014

Scruffy said:
The lower price of gasoline right now, has a lot to do with decreased demand.

So Prius owners will be even more insufferable now?

jack97 · Oct 15, 2014

Puck it said:
Thus an oversupply of crude.

Yep, its in light crude and congress wants to debate whether we should export it to other countries. Interesting thing is US has plateaued in our energy consumption while China and India has increased theirs.

And not only have we started leveraging shale oil. Some of the old US oil fields are back online, the outfits shut them down not because they ran out of oil, they shut down because they could not complete with cheap oil at that time.

Some are speculating that OPEC is increasing production to drive off competing sources.... time will tell.

millerm277 · Oct 16, 2014

To be actually discussing something more related to skiing: Low oil prices means that ski areas running diesel compressors will have their fuel budgets go much further than they were expecting them to.

Of course, electric rates are way up in parts of New England as a result of the natural gas pipeline capacity issues that showed up last winter, but at least the low oil prices mean some savings for ski areas and snowmaking budgets.

mister moose · Oct 16, 2014

millerm277 said:
To be actually discussing something more related to skiing: Low oil prices means that ski areas running diesel compressors will have their fuel budgets go much further than they were expecting them to.

Of course, electric rates are way up in parts of New England as a result of the natural gas pipeline capacity issues that showed up last winter, but at least the low oil prices mean some savings for ski areas and snowmaking budgets.

Depends on when they bought contracts. I bought the winter's heating oil in July (normally the seasonal low price) at $3.49, and that isn't looking very good now.

drjeff · Oct 16, 2014

Tin said:
So a single system in the Gulf can cause a price spike?

After the flight that I had yesterday from San Antonio to Tampa, I have a much greater grasp as to how a single storm in the Gulf of Mexico could very well cause a price spike!

My flight crossed the Texas Coast a bit North and East of Houston and then flew a bit offshore of the TX/LA/AL coast. It was a clear day and I was amazed at how many oil platforms there are in the shallow coastal waters of the Northern Gulf, easily 100's that I could see.

Granted all of them may not be producing right now, but with that many platforms in an area that an "average" sized hurricane would cover if it headed that way, I can easily see how that could cause a spike due to the shutting down of that much production while the crews would be evacuated for safety sake ahead of the storm

Smellytele · Oct 16, 2014

drjeff said:
After the flight that I had yesterday from San Antonio to Tampa, I have a much greater grasp as to how a single storm in the Gulf of Mexico could very well cause a price spike!

My flight crossed the Texas Coast a bit North and East of Houston and then flew a bit offshore of the TX/LA/AL coast. It was a clear day and I was amazed at how many oil platforms there are in the shallow coastal waters of the Northern Gulf, easily 100's that I could see.

Granted all of them may not be producing right now, but with that many platforms in an area that an "average" sized hurricane would cover if it headed that way, I can easily see how that could cause a spike due to the shutting down of that much production while the crews would be evacuated for safety sake ahead of the storm

Stay away from Drjeff he has the double trouble - he was in Texas and he flew on a plane - he may have ebola.

snoseek · Oct 16, 2014

Driving from NH to California again at the end of next week...this will save me a good bit of cash. I imagine its even lower once you get into Nebraska

BenedictGomez · Oct 16, 2014

mister moose said:
Depends on when they bought contracts. I bought the winter's heating oil in July (normally the seasonal low price) at $3.49, and that isn't looking very good now.

Yeah, while the price might head a bit lower, if people still have the option to freeze in their rate, now would be a great time to lock in a contract if it's being offered.

Oil nearly falls below $80 on oversupply

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