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Oil nearly falls below $80 on oversupply
- Thread starter Puck it
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Scruffy
Active member
Bad news for the economy though.
Perhaps for the economy of Saudi Arabia...
Scruffy
Active member
Na .. they can hold out, our team can't a 0 profit.
Puck it
Well-known member
Elaborate? Low oil means a lot things get cheaper.
Scruffy
Active member
Until the shale stops flowing because no one is making money getting it out of the ground. The current trajectory of West Texas crude is a big impediment to our economic recovery.
All the experts say as gas prices fall then so will our economy. I think its a fin sham by big oil to scare us into thinking prices cant get to low. I mean imagine them not making ridiculous profits and the little guy in business receiving the benefits of people having an extra dollar in their pocket.
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Puck it
Well-known member
I am sure there is point when it is too low for the domestic oil production since there is a break even on it with the extraction.
Scruffy
Active member
Yup, and $80 or below is the dipping point, according to a lot of analysts.
Oh, and another problem with too much production is not enough refineries and little to no storage for the stuff. So we are a victum of our own success.
BenedictGomez
Well-known member
The Russian economy? Absolutely. The Canadian economy? Sure.
The US economy? Not really. It's a mixed bag, but it does more good than harm. The rising USD which is partially responsible for the pullback in oil will likely have a more negative short-term effect.
Likely not going to happen, prices would have to get to the low $60s for break-even, which is a far cry from here. Though it could possibly lead to some scaling down along the way.
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BenedictGomez
Well-known member
This is tin-foil hat paranoia. And FYI, little known fact, the government makes more money on a gallon of gasoline than the "Big Oil" company that worked to extract it, provided thousands of jobs, paid to transport it, paid to refine it, and then paid to transport it again.
More like a victim of the Eco-nuts who have tirelessly worked to prevent the creation of additional refineries on US soil.
The last large refinery was built in the late SEVENTIES* due solely to politics. We, all Americans, should pay less at the pump, but we dont because one of our political parties is held hostage by wealthy campaign donors who block their creation.
* http://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6
Puck it
Well-known member
Little dated but still true. Taxes are about 10-20% of the price for a gallon.
Tin
Active member
From $3.40s a gallon a few weeks ago to $3.17 right now. Interesting what happens when there are no hurricanes in the Gulf to "blame" things on and such.
Puck it
Well-known member
Now, if we could get that pipeline from the oil shale deposits built.
BenedictGomez
Well-known member
$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.
Puck it
Well-known member
And the BP oil spill that shut all deep water drilling and the rigs went other places in the world.
And no major hurricanes to hit Gulf since 10/2005.
Scruffy
Active member
I hope you're right
" “If prices go to $80 or lower, which I think is possible, then we are going to see a reduction in drilling activity,” Ralph Eads, vice chairman and global head of energy investment banking at Jefferies LLC, which advised 38 percent of U.S. energy mergers and acquisitions this year, said in an Oct. 1 interview. “It will be uncharted territory.” "
Tin
Active member
Isaac was a Cat. 1, IT shut down refineries in its' path for 3-4 days (end of August). Prior to the hurricane even making landfall there was a 5-15 cent spike out of fears. 92% of refineries were online within 2 days and ONE refinery was flooded and non-operational for over a week, yet and gas prices continued to rise and did not fall to their previous level until mid October.
BenedictGomez
Well-known member
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.....
Puck it
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