We're always begging them to increase production when prices are high. I don't see it as a big deal that they want to cut back since the price has dropped. It would be nice if we can keep energy prices on a level keel. Although I don't see that happening.
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- Thread starter andyzee
- Start date
We're always begging them to increase production when prices are high. I don't see it as a big deal that they want to cut back since the price has dropped. It would be nice if we can keep energy prices on a level keel. Although I don't see that happening.
Warp Daddy
Active member
Cynically speaking i have zero faith in the energy companies doing the right things -- left unattended they will be self serving as always. But NOW is the time to press forward with alternatives
Geoff
Well-known member
That's because they are Oil Companies, not Energy Companies.
andyzee
New member
I have little faith in all companies these days. They're all just driven by the stock market.
ctenidae
Active member
OPEC quotas have been a joke since what, the mid 80's? Iran pretty much blew that whole idea away, and when the Saudis gave up even trying to be the "swing producer" (because compensating for other's over production cost them too much) OPEC became mostly irrelevant. They've brandished the oil sword a couple of times, and it was nearly effective twice, but not so much anymore. I just hope oil goes back up so the Russians will start spending on drilling and upstream stuff again. Most of their land costs a bit more than $40/boe to develop. Besides, at these prices, their oligarchs can't afford their mega luxury yachts, and that hurts the businesses of some friends. Poor Russians...
drjeff
Well-known member
Yup, those production cuts sure did the trick, as December contract crude fell below $38 a barrel in trading this AM. As of 11AM it had gone as low as $37.71 before bouncing back slightly into the mid $38 range so far today
ctenidae
Active member
Date Gas Oil
YE 2008 $6.35 $46.79
2009 $6.71 $54.00
2010 $7.64 $64.85
2011 $7.81 $73.86
2012 $7.79 $76.01
2013 $7.78 $78.75
2014 $7.82 $80.82
2015 $7.95 $82.93
2016 $8.08 $84.33
2017 $8.16 $85.40
Interesting to look at forward strip pricing (essentially what the market thinks oil will cost in the longer-term future)
YE 2008 $6.35 $46.79
2009 $6.71 $54.00
2010 $7.64 $64.85
2011 $7.81 $73.86
2012 $7.79 $76.01
2013 $7.78 $78.75
2014 $7.82 $80.82
2015 $7.95 $82.93
2016 $8.08 $84.33
2017 $8.16 $85.40
Interesting to look at forward strip pricing (essentially what the market thinks oil will cost in the longer-term future)
Dr Skimeister
New member
Unless we persue alternative energy, these low oil prices have a good chance of setting the stage for very high prices and small crude oil reserves in the future. Low prices lead to less consumer concern about oil use/waste as well as less incentive by the producers to explore and drill. Eventually it comes around to snakebite us consumers.
This game has been played many times over through the years. It will be more than coincidence that just as we think our economy is starting to rebound ( 3rd quarter 2010), fuel prices will be stratospheric again.
We're being played.
This game has been played many times over through the years. It will be more than coincidence that just as we think our economy is starting to rebound ( 3rd quarter 2010), fuel prices will be stratospheric again.
We're being played.
ctenidae
Active member
Even without alternatives, we're going to see a price spike- at $40, it's not economic to develop new reserves. Guess what happens when teh current oversupply is used up, adn there's no new development happening?
Longer-term, absolutely, alternatives are going to be a requirement. No one will be able to afford petroleum for anything at all if we keep using it as fuel.
andyzee
New member
Today's news:
"Oil drops 9 percent as demand outlook overshadows OPEC" http://finance.yahoo.com/news/Oil-drops-to-36-as-demand-rb-13870828.html
Gotta love it.
"Oil drops 9 percent as demand outlook overshadows OPEC" http://finance.yahoo.com/news/Oil-drops-to-36-as-demand-rb-13870828.html
Gotta love it.
andyzee
New member
$1.39 today. Opec, please cut production again, please....
Warp Daddy
Active member
wow Zeeman that's low -- i paid $1.73 here
GrilledSteezeSandwich
New member
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If this cheap gas contines for 2009..I might be able to stick to my new budget..
drjeff
Well-known member
It took me 52 minutes to get out of the mall I went to tonight once I got to my car 
The really pathetis part is that it took me less than 15 minutes to complete the shopping in the 4 stores that I went to tonight.
The really pathetis part is that it took me less than 15 minutes to complete the shopping in the 4 stores that I went to tonight.
ctenidae
Active member
I have to wonder about gas prices. 2 (okay, maybe 3) things going on that we haven't seen before that ought to have some impact:
1) Hurricane Ike. In September, capacity utilization of refineries fell to 74% (meaning refineries were only producing 74% of the distillates (gas, diesel, heating oil, etc) that they could). Normally, it's 85%-90%, which is effectively 100%, once you account for normal maintenance and interruptions. Utilization hasn't been that low since mind 1985 (and I don't know at the moment what happened then)
B) Dollar exchange rates. the USD price of oil vs the EUR price blew way out the past couple of years, particularly around the oil high in July. They've returned to "normal" now. Part of that is the fact that, in a crisis, all correlations move to 1, but it looks like FX rates are normalizing (an over-broad statement, to be sure, since the past 12 months are entirely unlike anything that approaches normal)
So, what happens? I'm not sure, but some parts are a bit worrisome. For one thing, and this may be THE thing, inventories of distillates have done some strange things of late. Not that they're ever actually all that good, but analysts have missed their estimates of inventories of gas, crude, heating oil, and such by huge margins the past 6 months or so (I sometimes think that petroleum analysts are really just failed meteorologists. Seriously, you have to be right sometimes, right?) If the refineries are slow coming back online, then a fairly severe supply crunch is in the works. If they're slow because there truly is no demand, then maybe life is good in a year or so, as the refineries have had time to do all the maintenance and upgrades they maybe didn't have time for before. But, if they're slow and there is some demand (either pent-up or due to a nasty winter (hello past week)), then prices may very well spike as demand outstrips supply.
Gasoline gets the added factor of the foreign exchange trade. A surprisingly large amount of gas in the US comes from Europe, since they have a higher demand for diesel, and gas is an "unwanted" byproduct of diesel production. So an increasing percentage of our gasoline stocks could be shipping in from Europe, giving us a fairly serious FX effect.
On top of that, shipping has gone to hell lately. Dry bulk shipping (stuff that's not liquid, duh) has gotten creamed lately, with day rates falling below the daily expenses (it costs more to operate the ship than people are willing to pay to ship stuff). There's been a huge re-setting of that lately, but it's a massive percentage increase on a very small base. Rates are still at or slightly below costs. It has started to creep into the wet bulk (liquids, duh) rates, and will likely continue. Which means that the banks that loaned the money to build a lot of those ships may soon find themselves owning those ships (a la the housing market). Banks don't operate ships (no more than they like to own houses), and it's just as easy for them to dock a ship they've already written the loan off on as it is to do anything else, so if they can't get profitable rates, guess what- they'll pull the ships.
So, we have refineries not refining, and ships that, soon, may not be shipping. Returning to the second bit, FX rates are a bit of a quandry. The British Pound and the Euro have both hit about $1.40 ($1.48 and $1.40 today, to be precise), which makes some sense because much of Europe and the UK have been hit as hard, or harder, as the US by the housing bubble (yes, Virginia, NINJA loans exist everywhere). How do the US and Eurozone financial problems relate, and what will it do to exchange rates? I have no idea. But, a swing one way will make the dollar strong, which makes European gas imports cheap, and a swing the other way makes the dollar weak, which makes European gas imports quite expensive.
So, how much gas in imported into the US from Europe? I'm not entirely sure. I think it's a significant, but not game-changing, amount when refineries in the US are running at normal levels. When they're not, I suspect it's quite a lot. How long have been, or how long will be, refinery's production down? Another variable.
Unfortunately, the number of unknowns and variables characterize the current ongoing crisis quite well. There's another shoe to drop, on that we can all agree. What we don't know is when it drops, how big the shoe is, and how many pairs are still in the closet.
Sorry for the extended rant/diatribe. I'm wrestling with these questions on a daily basis, and it often helps me to think out loud. I could delete this post now that I've typed it, but I won't, because I think that the thoughts and reactions of "average" folks (not that any of us really qualify as "average," rabid ski-spenders and equipment-buyers that we all are) plays into the whole dynamic in a fairly massive way. Just think- what you say on this little message board could, in the long run, have a very material impact on (seriously) thousands and thousands of people.
Scary, isn't it?
In closing, I have but two things to say:
And:
:beer:
And third:
andyzee
New member
I have to wonder about gas prices. 2 (okay, maybe 3) things going on that we haven't seen before that ought to have some impact:
1) Hurricane Ike. In September, capacity utilization of refineries fell to 74% (meaning refineries were only producing 74% of the distillates (gas, diesel, heating oil, etc) that they could). Normally, it's 85%-90%, which is effectively 100%, once you account for normal maintenance and interruptions. Utilization hasn't been that low since mind 1985 (and I don't know at the moment what happened then)
B) Dollar exchange rates. the USD price of oil vs the EUR price blew way out the past couple of years, particularly around the oil high in July. They've returned to "normal" now. Part of that is the fact that, in a crisis, all correlations move to 1, but it looks like FX rates are normalizing (an over-broad statement, to be sure, since the past 12 months are entirely unlike anything that approaches normal)
So, what happens? I'm not sure, but some parts are a bit worrisome. For one thing, and this may be THE thing, inventories of distillates have done some strange things of late. Not that they're ever actually all that good, but analysts have missed their estimates of inventories of gas, crude, heating oil, and such by huge margins the past 6 months or so (I sometimes think that petroleum analysts are really just failed meteorologists. Seriously, you have to be right sometimes, right?) If the refineries are slow coming back online, then a fairly severe supply crunch is in the works. If they're slow because there truly is no demand, then maybe life is good in a year or so, as the refineries have had time to do all the maintenance and upgrades they maybe didn't have time for before. But, if they're slow and there is some demand (either pent-up or due to a nasty winter (hello past week)), then prices may very well spike as demand outstrips supply.
Gasoline gets the added factor of the foreign exchange trade. A surprisingly large amount of gas in the US comes from Europe, since they have a higher demand for diesel, and gas is an "unwanted" byproduct of diesel production. So an increasing percentage of our gasoline stocks could be shipping in from Europe, giving us a fairly serious FX effect.
On top of that, shipping has gone to hell lately. Dry bulk shipping (stuff that's not liquid, duh) has gotten creamed lately, with day rates falling below the daily expenses (it costs more to operate the ship than people are willing to pay to ship stuff). There's been a huge re-setting of that lately, but it's a massive percentage increase on a very small base. Rates are still at or slightly below costs. It has started to creep into the wet bulk (liquids, duh) rates, and will likely continue. Which means that the banks that loaned the money to build a lot of those ships may soon find themselves owning those ships (a la the housing market). Banks don't operate ships (no more than they like to own houses), and it's just as easy for them to dock a ship they've already written the loan off on as it is to do anything else, so if they can't get profitable rates, guess what- they'll pull the ships.
So, we have refineries not refining, and ships that, soon, may not be shipping. Returning to the second bit, FX rates are a bit of a quandry. The British Pound and the Euro have both hit about $1.40 ($1.48 and $1.40 today, to be precise), which makes some sense because much of Europe and the UK have been hit as hard, or harder, as the US by the housing bubble (yes, Virginia, NINJA loans exist everywhere). How do the US and Eurozone financial problems relate, and what will it do to exchange rates? I have no idea. But, a swing one way will make the dollar strong, which makes European gas imports cheap, and a swing the other way makes the dollar weak, which makes European gas imports quite expensive.
So, how much gas in imported into the US from Europe? I'm not entirely sure. I think it's a significant, but not game-changing, amount when refineries in the US are running at normal levels. When they're not, I suspect it's quite a lot. How long have been, or how long will be, refinery's production down? Another variable.
Unfortunately, the number of unknowns and variables characterize the current ongoing crisis quite well. There's another shoe to drop, on that we can all agree. What we don't know is when it drops, how big the shoe is, and how many pairs are still in the closet.
Sorry for the extended rant/diatribe. I'm wrestling with these questions on a daily basis, and it often helps me to think out loud. I could delete this post now that I've typed it, but I won't, because I think that the thoughts and reactions of "average" folks (not that any of us really qualify as "average," rabid ski-spenders and equipment-buyers that we all are) plays into the whole dynamic in a fairly massive way. Just think- what you say on this little message board could, in the long run, have a very material impact on (seriously) thousands and thousands of people.
Scary, isn't it?
In closing, I have but two things to say:
And:
:beer:
And third:
Ok Steve, whatchu do with ctenidae? :lol:
andyzee
New member
Bonus suggestions for CEOs this year: http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=11229996&src=finance&ch=2813875
andyzee
New member
Times are so bad, folks are getting laid off left and right, yet receipt checkers exist. Is it me or is there something wrong with this picture?
billski
Active member
I'm not following you. When times are down, theft is up. Thus these "Loss Prevention Specialists" are more necessary.
andyzee
New member
I'm looking at it from a consumers perspective. I would prefer to go into a store and find helpful staff as opposed to someone that checks my receipt right after I step away from a register. Also, most stores have sensors that will sound alarms like crazy if you do not pay for something.
Which brings up another question. You pay for something, person at the counter doesn't do his thing so that it doesn't sound the alarm as you walk out the door. You walk towards the door, alarm sounds, do you stop and wait or do you continue on. Me, I just continue on. I payed, I have receipt, your system is screwed up, leave the the f alone.
