Gas Price

drjeff · Apr 26, 2011

SkiFanE said:
95% cash, 5% debit.

I know every full serve place in my area, and some have discounts for cash. These places are cheaper than the self-serve's, can't figure that out. I don't like to pump gas.

Oh..heard Exxon, et. al. will be reporting record profits again, I think Exxon's is up over 60% (whatever that means, exactly lol). Funny...people keep buying gas, they have great incentive to lower prices, eh? But not sure Obama should get involved by nagging the oil companies, isn't supply/demand important for capitalism?

Actually...we're not killed so much at the gas pump, but heating 2 homes in oil this winter - yowza.

Any company that is involved in the extraction of oil from the ground is obviously going to show large revenues, and hence profits when the price of oil soars. Heck, the reality is that what it costs them to get a barrel of oil out of the ground isn't that much different when oil is $50 a barrel as verses when it's $110 a barrel, but what they get paid for that barrel certainly is!

Plus, as much as people love to villify the oil companies, take what happened to Shell yesterday. The government via the EPA pulled their new Alaskan oil drilling permits, after Shell had spent about 2 TRILLION in pre-drilling exploration/prep work, with one of the apparent main reasons being that one of the ice breakers that they had to use during the exploration process and would be using presumably to help with future supplying, and it's smoke stack emmissions weren't taken into account in the permit process! WTF!

If so much of this price spike is being driven by futures speculation, and we seem to be doing our best in this country to make it as difficult as possible to access/extract the vast supplies of oil that we have, you'd think that maybe, just maybe if certain people that live a good chunk of the year in an area defined by Virgina and Maryland might just want to consider making access easier as opposed to more difficult, and I'd bet that you'd see the futures prices start to fall, and do so quickly!

dmc · Apr 26, 2011

drjeff said:
If so much of this price spike is being driven by futures speculation, and we seem to be doing our best in this country to make it as difficult as possible to access/extract the vast supplies of oil that we have, you'd think that maybe, just maybe if certain people that live a good chunk of the year in an area defined by Virgina and Maryland might just want to consider making access easier as opposed to more difficult, and I'd bet that you'd see the futures prices start to fall, and do so quickly!

Cool... just no hydrofracking..

deadheadskier · Apr 26, 2011

Jeff,

While I agree that increasing supply can do nothing but help with prices at the pump, the pain at the pump has nothing to do with supply right now. 2008 spike proves that.

Personally I think that commodities should never be traded. The practice only helps investors, not consumers.

Glenn · Apr 26, 2011

Some solid points Jeff. It would be hard to speculate if you had more domestic supply coming online. We're shooting ourselves in the foot with the NIMBYing. IMHO.

Warp Daddy · Apr 26, 2011

I'm probably off the wall on this BUT I think AMERICA has OTHER potent bargaining chips with which to wheel and deal and squeeze the livin beejeepers out of the OPEC crowd and other wildcat speculator nations and international cartels .

IMO The pass thru of the TRUE DIRECT and INDIRECT costs to the end beneficiaries of the USA being both the World's Muscle and the Breadbasket could easily begin to offset some Middle Eastern, South American and other oil producing biggies shenanigans.

drjeff · Apr 26, 2011

deadheadskier said:
Jeff,

While I agree that increasing supply can do nothing but help with prices at the pump, the pain at the pump has nothing to do with supply right now. 2008 spike proves that.

Personally I think that commodities should never be traded. The practice only helps investors, not consumers.

But yet back in '08, one of the things that helped break that rapid rise up in oil prices was when the folks that spend most of their year living in that area defined by Virginia and Maryland decided to open up vast areas to exploration and drilling. The futures market saw this (along with a few other things) as a sign that stability would be more reliable in the future, and hence stopped "betting" that prices would rise.

Lastly, since oil is a globally traded commodity, the more places in the world that we can be extracting oil from the ground that are generally speaking "politically stable" the better for the world markets.

Sure, we need to find greener energy sources, but the the reality is that this country is decades away from first finding the mass scale greener energy technology that it would require and then being able to manufacter enough of those technologies to meet the demand and then get them implemented into the hands of the consumer in a way that is feasible. In the mean time, we've got a HUGE amount of oil that for various reasons we've decided that we should't be accessing, and yet we're still trying our best to say that the root of the problem is the speculators and the oil companies

Nick · Apr 26, 2011

it's really painful right now and I have a Saab that gets pretty decent mileage (4-banger turbo).

What's annoying is now it costs > $50 to fill my tank (premium) and many of the local gas stations cap purchases at $50 so I can't even fill up the whole way.

hammer · Apr 26, 2011

drjeff said:
But yet back in '08, one of the things that helped break that rapid rise up in oil prices was when the folks that spend most of their year living in that area defined by Virginia and Maryland decided to open up vast areas to exploration and drilling. The futures market saw this (along with a few other things) as a sign that stability would be more reliable in the future, and hence stopped "betting" that prices would rise.

Lastly, since oil is a globally traded commodity, the more places in the world that we can be extracting oil from the ground that are generally speaking "politically stable" the better for the world markets.

Sure, we need to find greener energy sources, but the the reality is that this country is decades away from first finding the mass scale greener energy technology that it would require and then being able to manufacter enough of those technologies to meet the demand and then get them implemented into the hands of the consumer in a way that is feasible. In the mean time, we've got a HUGE amount of oil that for various reasons we've decided that we should't be accessing, and yet we're still trying our best to say that the root of the problem is the speculators and the oil companies

Guess I thought that the reason behind the decline in oil/gas prices (and I remember seeing prices under $2 at the pump) was a combination of the tanking of the economy and that the crisis in financial markets meant that there wasn't as much cash around to speculate with.

Maybe I'm completely off base but if we don't have a supply vs. demand problem then the prices should not be shooting up...

That all said I have no problem with increasing domestic supply as long as it's done responsibly.

wa-loaf · Apr 26, 2011

hammer said:
That all said I have no problem with increasing domestic supply as long as it's done responsibly.

If all the potential US oil supply came into operation today it would only be a drop in the bucket and doesn't really have much of an impact on supply overall. A lot of it is also very expensive to extract and isn't really worth pulling up unless the price of oil is high. Either way I'd really like to see the tax subsidies for the Oil companies taken away.

deadheadskier · Apr 26, 2011

drjeff said:
But yet back in '08, one of the things that helped break that rapid rise up in oil prices was when the folks that spend most of their year living in that area defined by Virginia and Maryland decided to open up vast areas to exploration and drilling. The futures market saw this (along with a few other things) as a sign that stability would be more reliable in the future, and hence stopped "betting" that prices would rise.

You actually believe that?

I don't one bit. The 'manipulators' (not speculators, let's call them what they truly are) knew the bubble would pop and backed out.

Trading of commodities most of the time has nothing to do with speculated future supply and demand. It's market manipulation to create cash for investors. Just another exotic shaddy investment practice like the banking industry swapping credit defaults. I see the same crap in the food wholesale business.

So, while changing policy to increase supply would be a good thing, I don't think that's the primary problem. Adding or eliminating 5% supply shouldn't cause such massive swings in market costs in such short periods of time. That's not true market supply and demand.

ctenidae · Apr 26, 2011

deadheadskier said:
You actually believe that?

I don't one bit. The 'manipulators' (not speculators, let's call them what they truly are) knew the bubble would pop and backed out.

Trading of commodities most of the time has nothing to do with speculated future supply and demand. It's market manipulation to create cash for investors. Just another exotic shaddy investment practice like the banking industry swapping credit defaults. I see the same crap in the food wholesale business.

So, while changing policy to increase supply would be a good thing, I don't think that's the primary problem. Adding or eliminating 5% supply shouldn't cause such massive swings in market costs in such short periods of time. That's not true market supply and demand.

Of course, if fighting in Libya and protests/violence elsewhere calm down a bit, you'll see all those speculative trades getting unwound, with a subsequent massive drop in prices (a la 2009). But, no one praises the effect of financial speculators when gas falls below $2.

Regardless of hand wringing, NIMBYism, eco-angst, or anything else that fits in a headline, the marginal cost of another barrel of oil is around $80. Prices may go up and down, and will, sometimes wildly. But in the end, getting the next barrel out of the ground to replace the one you just put in your car is going to cost about $80, all in.

bigbog · Apr 26, 2011

The sick joke is in having Washington leave Big Oil in command(financially-wise), to a large part, towards developing alternative forms of energy...imo.

SkiFanE · Apr 26, 2011

bigbog said:
The sick joke is in having Washington leave Big Oil in command, to a large part, of developing alternative forms of energy..

Lol!

I think if prices are high, through supply/demand, that is incentive for creating alternative energy. Who wants to invest $ in finding something new when gas is $2/gallon? And if people do invest when gas prices are high, and then they drop...their business plan is shot to hell b/c noone will buy alternatives unless it's cheaper than gas. So the gov't is just effing up everything by being in bed with big oil.

ctenidae · Apr 26, 2011

bigbog said:
The sick joke is in having Washington leave Big Oil in command(financially-wise), to a large part, towards developing alternative forms of energy...imo.

There is, actually, a perverse incentive for oil companies to embrace alternative energy. Reducing demand can help moderate prices, which actually supports demand. At $3.50 gas, we grumble but drive. At $4.50, we stop driving.

But, oil companies are not solar companies, or wind companies, or bio fuel companies. They know how to drill holes in the ground, lay pipe, and operate refineries. They don't know how to grow polysilicone crystals, tune a blade on a windmill, or grow more corn. Nor should they, any more than Microsoft should know how to build a helicopter. It's not the oil companies' job to develop alternative energy sources. They should do what they can to be ready to capitalize on it if they want, but to paraphrase Exxon, they're oil and gas companies, not windmill manufacturers.

Car companies should be, and to a large extent are, driving efficiency and new technologies. Builders should be, and are, developing and utilizing more efficient structures. Lightbulb manufacturers should be, and are, creating more efficient lightbulbs. Consumers should be, and only barely are, demanding, utilizing, and paying for new, efficient, renewable devices.

Should government be funding research and development of new energy sources? Absolutely (along with all kinds of other new R&D). Of course, I think those agencies that fund R&D should be able to monetize those developments adn generate a return on onvestment for tax apyers, however modest, but that's a whole other theory.

SkiFanE · Apr 26, 2011

ctenidae said:
Lightbulb manufacturers should be, and are, creating more efficient lightbulbs. Consumers should be, and only barely are, demanding, utilizing, and paying for new, efficient, renewable devices.

I admit I hate the new CFL lightbulbs. Stopped buying them. The ones outside and in the garage take too long to warm up. The light is too stark for inside. I think I'll be hoarding the incandescent when they become illegal lol.

And...to be all conspiracy-like, I swear incandescents are blowing out faster then ever, so manufacturers can say CFLs last so much longer. I have one thats a major pain to replace and we are doing it so much more often now it seems..

bigbog · Apr 26, 2011

So you both are saying that Washington IS doing its part? It's part in furnishing the environment(financially to work with other companies) where companies other than big oil are getting Whatever it Takes.... That's what it took to get NASA's Project Apollo to fruition...to some degree.
Mega-$$$ a month to Karzei and Iraq's head honcho to maintain civil societies..what a laugh. Add to that our puppet dictators in the mid-east we're now trembling over losing as weapons buyers....to the populations wanting more of a future....with our great mass-media saying they all are wanna-be Al Quaida recruits...LOL.
Apologize for the rambling but there are many players playing ball with Big Oil.....to keep the status quo.
It's just that gasoline doesn't have to be used in so many places........

ctenidae · Apr 26, 2011

bigbog said:
So you both are saying that Washington IS doing its part? It's part in furnishing the environment(financially to work with other companies) where companies other than big oil are getting Whatever it Takes.... That's what it took to get NASA's Project Apollo to fruition...to some degree.
Mega-$$$ a month to Karzei and Iraq's head honcho to maintain a civil societies...LOL.

I didn't say Washington is doing its part- certainly not in its entirety. But, I don't think Washington's "part" involves hammering oil and gas companies for not investing in renewable energy. At least, not until paper companies are hammered for not subsidizing iPads, municipal water companies are hammered for not supplying Evian at the tap, fast food companies are hammered for not serving 5-star quisine, and Crocs is hammered for not making shoes that don't look stupid.

wa-loaf · Apr 26, 2011

ctenidae said:
Crocs is hammered for not making shoes that don't look stupid.

:beer:

deadheadskier · Apr 26, 2011

ctenidae said:
. But, no one praises the effect of financial speculators when gas falls below $2.

no, I won't praise them because I disagree with the manipulating/speculating. As said prior, I would rather commodity futures not be a tradeable financial instrument. The only people who benefit from that are the traders and investors.

Consumers would be best served by true market values on commodities, not what some guy in a suit in a corner office predicts to make a buck for himself and an investor.

wa-loaf · Apr 26, 2011

Who says we're holding anyone back ... ?

Halliburton's consolidated revenue in the first quarter of 2011 was $5.3 billion, compared to $3.8 billion in the first quarter of 2010. Consolidated operating income was $814 million in the first quarter of 2011, compared to $449 million in the first quarter of 2010. These increases were attributable to increased activity in United States land, as the unabated shift to unconventional oil and liquids-rich basins more than offset geopolitical issues in North Africa and the ongoing effects of the suspension of deepwater activity in the Gulf of Mexico.

http://ir.halliburton.com/phoenix.zhtml?c=67605&p=irol-newsArticle&ID=1551221

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