Oil at less than $48/barrel

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I think that answer is all over the news. The Saudis are purposely not cutting supply in order to put the US and Canadian non-traditional oil producers out of business.

The Saudis are not undercutting their own price BTW. Their cost to produce is still below $40/barrel (depending on which field of course). The same is true for many fields in the US as well, but not for Bakken. And certainly not for Canadian tar sand oil.

Originally Posted By: cjcride
Good Point. How did the people at the helms of the oil companies and OPEC allow such a glut of oil? Who undercuts the price of their own product to this degree?
 
Originally Posted By: kschachn
I think that answer is all over the news. The Saudis are purposely not cutting supply in order to put the US and Canadian non-traditional oil producers out of business.

The Saudis are not undercutting their own price BTW. Their cost to produce is still below $40/barrel (depending on which field of course). The same is true for many fields in the US as well, but not for Bakken. And certainly not for Canadian tar sand oil.

Originally Posted By: cjcride
Good Point. How did the people at the helms of the oil companies and OPEC allow such a glut of oil? Who undercuts the price of their own product to this degree?


I think you missed the point of my question. You claim that the industry doesn't control prices by controlling supply. If this were true, then it wouldn't matter how much supply was on the market, the price would stay the same...
 
Originally Posted By: grampi
Originally Posted By: kschachn
I think that answer is all over the news. The Saudis are purposely not cutting supply in order to put the US and Canadian non-traditional oil producers out of business.

The Saudis are not undercutting their own price BTW. Their cost to produce is still below $40/barrel (depending on which field of course). The same is true for many fields in the US as well, but not for Bakken. And certainly not for Canadian tar sand oil.

Originally Posted By: cjcride
Good Point. How did the people at the helms of the oil companies and OPEC allow such a glut of oil? Who undercuts the price of their own product to this degree?


I think you missed the point of my question. You claim that the industry doesn't control prices by controlling supply. If this were true, then it wouldn't matter how much supply was on the market, the price would stay the same...


I could be wrong, but I think that he is saying that oil is imported?
 
Originally Posted By: MalfunctionProne
Originally Posted By: grampi
Originally Posted By: kschachn
I think that answer is all over the news. The Saudis are purposely not cutting supply in order to put the US and Canadian non-traditional oil producers out of business.

The Saudis are not undercutting their own price BTW. Their cost to produce is still below $40/barrel (depending on which field of course). The same is true for many fields in the US as well, but not for Bakken. And certainly not for Canadian tar sand oil.

Originally Posted By: cjcride
Good Point. How did the people at the helms of the oil companies and OPEC allow such a glut of oil? Who undercuts the price of their own product to this degree?


I think you missed the point of my question. You claim that the industry doesn't control prices by controlling supply. If this were true, then it wouldn't matter how much supply was on the market, the price would stay the same...


I could be wrong, but I think that he is saying that oil is imported?


What does that have to do with it?
 
Originally Posted By: grampi

What does that have to do with it?


If I read him correctly, that the importers of the oil set the supply vs the demand and then oil companies set it according to that.. I also am attempting to get clarity on what kschachn suggested.
 
If the market sets the pricing for gas, then waiting to lower it while raising it if it goes that way would APPEAR TO ME to be "Corporate Greed." Though I am interested on this take of supply, the market, etc. It is also why I said that price per gallon of pump gasoline seems "ridiculously cheap," given all involved.

Please note that Diesel fuel costs more, as does perhaps aviation fuel, and other things, etc.
 
IMO the price of gas is about what it should be right now. It was way too high for the past few years. We've been conditioned to thinking 3 dollar a gallon gas is cheap.
 
Originally Posted By: grampi
I think you missed the point of my question. You claim that the industry doesn't control prices by controlling supply. If this were true, then it wouldn't matter how much supply was on the market, the price would stay the same...


I honestly don't know what you are asking. Sometimes your questions are very convoluted in their wording because I think you are trying to make a point at the same time.

But limitless supply with no change in price? That makes no sense unless it's communism, and I don't think it works then either. I think the recent drop in crude prices is indicative of supply and demand, don't you? Supply increase (Bakken and Canadian tar sand crude), along with a lower demand. Coupled with the Saudis and other OPEC producers not lowering supply, that trends towards a sharply lower price doesn't it?

North American crude production will fall if it hasn't already. That will raise prices a little but how much we are going to have to see.

It's just your use of "the industry" and "control" that I take issue with. Here in the US it is mostly driven by demand but pricing is set globally. Plus not all crude costs the same here and elsewhere so the effect of price on supply is not uniform.

All of which is my opinion. You may and probably do think differently. I'm not pontificating here just discussing.
 
I know a couple of people who invest a lot in this industry, I keep hear them say that maybe $60 a barrel is the new ceiling for awhile.


I don't see anything right now going on in the world that would support much of an increase off its current lows if any at all.

The love affair with the BRIC countries is finally starting to wear off as well, good.
 
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Originally Posted By: kschachn
Originally Posted By: grampi
I think you missed the point of my question. You claim that the industry doesn't control prices by controlling supply. If this were true, then it wouldn't matter how much supply was on the market, the price would stay the same...


I honestly don't know what you are asking. Sometimes your questions are very convoluted in their wording because I think you are trying to make a point at the same time.

But limitless supply with no change in price? That makes no sense unless it's communism, and I don't think it works then either. I think the recent drop in crude prices is indicative of supply and demand, don't you? Supply increase (Bakken and Canadian tar sand crude), along with a lower demand. Coupled with the Saudis and other OPEC producers not lowering supply, that trends towards a sharply lower price doesn't it?

North American crude production will fall if it hasn't already. That will raise prices a little but how much we are going to have to see.

It's just your use of "the industry" and "control" that I take issue with. Here in the US it is mostly driven by demand but pricing is set globally. Plus not all crude costs the same here and elsewhere so the effect of price on supply is not uniform.

All of which is my opinion. You may and probably do think differently. I'm not pontificating here just discussing.


When gas was selling at $3.50-$4, prices were kept at those high levels because the industry kept supply at levels that just barely met demand. Supplies were so tight that one or two refineries being down for maintenance would cause price spikes. There was no reason for supplies to be so tight during that time other than for keeping prices as high as possible. They could've easily increased to supply to lower prices, but they didn't want to do that because it hurts their bottom line. Fast forward to today. More production and lower demand have created a glutton of supply, therefore we have lower prices...now, following this trend, how can anyone say that controlling the amount of supply doesn't control prices? It absolutely does...
 
Originally Posted By: hattaresguy
I know a couple of people who invest a lot in this industry, I keep hear them say that maybe $60 a barrel is the new ceiling for awhile.


I don't see anything right now going on in the world that would support much of an increase off its current lows if any at all.

The love affair with the BRIC countries is finally starting to wear off as well, good.


That ceiling is awfully closer now. Maybe through the roof in a week?
 
Originally Posted By: Silverado12
IMO the price of gas is about what it should be right now. It was way too high for the past few years. We've been conditioned to thinking 3 dollar a gallon gas is cheap.


I agree.

Now, the bickering about supply vs demand aside... HOW MUCH LONGER WILL PUMP GAS BE AT THIS BLISSFUL MECCA OF LOW? I honestly never thought we would see below $2/gal again.

These are like 1999/2002 and 2003 prices, everyone...

And if Congress gets involved? We need them legislated LOW, NOT HIGH... again... LOW (as in the "now" price. Ticked up to $1.75/gal from $1.69/gal here in NJ) not HIGH like the $7/gal some tout as what gas "should" cost... and they are full of [censored], those $7/gal know-nothing-heads..

My own personal economy is being stimulated by these GREAT PUMP GAS prices. Washington needs to get that memo..
 
Originally Posted By: MalfunctionProne

HOW MUCH LONGER WILL PUMP GAS BE AT THIS BLISSFUL MECCA OF LOW?


I don't think much longer unfortunately. Crude is already back up to $50 a barrel and seems to slowly be going back up daily. I would laugh if it wasn't so darn annoying the way prices at the pump take weeks to fall when crude prices do but the second crude ticks up you see gas station employees running out to the sign to raise the pump price. Gas prices here are already going up right along with the crude.
 
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Originally Posted By: NHHEMI
Originally Posted By: MalfunctionProne

HOW MUCH LONGER WILL PUMP GAS BE AT THIS BLISSFUL MECCA OF LOW?


I don't think much longer unfortunately. Crude is already back up to $50 a barrel and seems to slowly be going back up daily. I would laugh if it wasn't so darn annoying the way prices at the pump take weeks to fall when crude prices do but the second crude ticks up you see gas station employees running out to the sign to raise the pump price. Gas prices here are already going up right along with the crude.


I consider this an excellent insight, and it's true about the "weeks to go down" but "goes up in hours" - though Corporate Greed is not supposed to exist??
crackmeup2.gif


Those gas stations make pennies for each gallon sold. Pennies. Big Oil gets the rest... after taxes (which are uy on the lower side.) and I hear gasoline gets the Road Tax, too.

We also have an anti-gas US Administration so these gas prices should be locked in..
 
Originally Posted By: Blaze
$1.69 last week to $1.84 yesterday filling up....Chewelah, Wa. I guess we all knew it wouldn't last.


It is only "over" if it goes to above $2/gallon pump price.

And to what do we owe this possible "increase?" A fake blizzard in NJ, and an ice storm?
 
Here it was $1.95 yesterday now today it is $2.09. I would be glad if they just kept it somewhere between $2.00 and $2.50 but we all know that is not going to happen. I guess it was good while it lasted.
 
First off, let me say I didn't read the whole thread, so here's my question. Has anyone mentioned yet buying gas stock, if it's cheap right now?
 
50,000 i don't have that moolah but it would be good if the price went back up again to make large profits though. Hopefully it can go down lower with the new pipeline they are talking about. Supposed to go through home state here. I'm in for it.
 
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