Find this hard to believe, US oil

Geo-TH,In · Jan 5, 2015

The CBS nightly news reported the market took a $300 dive today because oil went below $50. Closed at $50.04

They also reported the US is the world's largest producer of oil. Believe it or Not. I find it hard to believe. Fracking is the cause.

So, oil is more than half what it was a year ago. They said heating oil is around $3 and last year $4.

How much did gas fall from last year? Sounds like some have lower prices than I have, $1.94.

GeneMO · Jan 5, 2015

Dropped off a 100# bottle of propane to get filled, they said it would be $70. I went back a few hours later, paid the bill and she charged me $60. I told her she had quoted $70 earlier and she said " it must have gone down"

I didn't argue.

Gene

John T · Jan 5, 2015

You cant please everybody, there are some who complain when gas is high (I do) while others complain when its low. Its just now getting back down close to what it was when external_link took office and those (then supposed) HIGH prices were said to be the fault of Bush and his rich oil buddies and corporate greed. Oh well I prefer lower gas prices myself, others are free to like when its higher. Maybe there should be an offering basket at the pumps so those who feel sorry for low prices can make a donation.

John T

Ivan in Mich · Jan 5, 2015

I got gas today in Cadillac Mi and reg gas was 1.78 and road diesel was 2.82. I am afraid when it goes up it will go up fast

GordoSD · Jan 5, 2015

They were 22 dollars in 1999.

J.Wondergem · Jan 5, 2015

$1.74 today in Rockford, Mi. Falls any farther and they will really raise the taxes on it. Then when it goes back up, it'll be way up there.

MarkB_MI · Jan 5, 2015

John, we've been down this road before. Gas prices were cheap at the end of 2008 because the economy was in shambles. No jobs = no demand = cheap gas. Thank you, Junior! You drove the economy into the ground. Now we have cheap gas, just no jobs. Somehow I don't think Dubya will be remembered in the history books as the guy who brought cheap gas to America; he'll have a slightly different legacy. Sort of like Herbert Hoover, who seldom gets credit for his engineering accomplishments.

Today is a different scenario. The economy is reasonably healthy and there's plenty of demand for fuel. But now the fuel prices are being driven down by supply. No, we probably shouldn't give our beloved Commander in Chief credit for that, unless you want to assume he made a deal with Saudis to cut the throats of Russia, Syria and Iran. (Which has been suggested by some to be the case.)

RMinVa · Jan 5, 2015

"Fracking is the cause" that sure helped but don't forget fuel usage is down. When folks buy cars that get 40 mpg and the old one they had got low 20's it makes a big difference in usage too. Some of both in this deal.

MarkB_MI · Jan 5, 2015

Yep. Not everybody is a winner when fuel gets cheap. Now it seems the taxpayers may be on the hook to bail out banks who were holding long positions on crude oil. They managed to get that into the "Cromnibus" bill.
Taxpayer Russian Roulette

mb58 · Jan 5, 2015

There are several reasons for cheap oil as of late. Not the least of which is, the Elites are reining the Russian bear in. The Saudis are flooding the market to cripple the shale-oil companies. And ISIS is selling it for $25 a barrel on the black market. Add this all the things listed below and you have cheaper oil until sometime toward the end of this year.

DoubleR · Jan 5, 2015

The market took a dive and oil dropped some more today. What I can't figure out is Why did gas go up about 40 cents a gallon today?
I drove from the Flint Mi. to about 20 miles North of the Ohio border today. I got a gas alert on my phone by Ohio and everyone was about 40cents higher on the return trip than they were in the morning on the way down.

JayinNY · Jan 5, 2015

It's all BS, Last year they were saying everything is so bad in the economy because of high oil prices, Now they're running around saying everything is in turmoil because of low oil prices! It seems like to me it's nothing but a big contradiction. I don't read the newspaper watch the media news or anything because you can't believe a single word of it,

rrlund · Jan 5, 2015

Not to mention that investors own certain talking heads who say whatever they are paid to say to bring their owners even more money and power.

gtractorfan · Jan 5, 2015

$1.58 in our town. Something's fishy.

JayinNY · Jan 5, 2015

Yep, It's all negativeness in the news around here, that's all the media is about. A cop got arrested for posting pics of a undressed women six years ago, cut to a commercial if you don't buy this toothpaste your teeth will rot out, back to the news some guy robbed a bank, And people everywhere are starving, Back to a commercial if you don't use this anti zit cream you won't find a date. On top of all that, everything you eat is bad for you. Lol, I can't stand the media

john in la · Jan 5, 2015

I would think something is about to happen.

Oil tanker rental rates have been going up lately (up 27%) to 2008 prices.
The reason is speculators are buying oil and storing it in tankers in international waters.

The Chinese are buying oil like there is no tomorrow; and the shape of the oil-futures curve are the cause. Near-term Brent crude contracts are cheaper than those further out.

So speculators are thinking oil is about to go way up; and they will then sell their oil stored in tankers.

So some speculators are set to make; or lose a LOT of money.
I guess we will soon find out what way it goes.

John_PA · Jan 5, 2015

I drove past this...

this...

and this...

...in a 1 hour and 15 minute drive today. None of these places existed in 2008(or were just starting construction). I don't think I could begin to really explain the way this is impacting the global economy. These are not the only places. This is just the tip of the iceberg and I do truly believe it will take something just short of an act of war to stop it. These companies are not going to stop drilling. They might start closing valves on finished wells, saving it for when the price rebounds; but they are not going to stop drilling.

It's going to go in the history books alongside Col Drake's first well, Standard Oil, Saudi oil fields, and the Alaskan pipeline. My area is not experiencing a bad economy. It will be this way for at least 30-40 years. I wish everyone could be experiencing this type of fortune. Sure, not everyone is profiting from it, but give it more time. It's only been since 2008 that this industry has got a good foothold.

John_PA · Jan 5, 2015

One more set of pictures. This is a 38 and a half acre hillside of hay and corn that I rented in 2012 when they dropped the pipeline through.

Here is the same field in June 2014. Now that construction is complete, the place is basically 2 big parking lots. The one "parking lot" has a water tank on it that holds a half million gallons of water in a 15 foot high, 60-80 foot diameter tank. No farming will be done on this farm for at least the next 100 years.

sourgum · Jan 5, 2015

Don't forget oil companies have bean counters. If a company can't project black ink in 2015 the smaller oil companies are going to curtail drilling plans and production plans. It is economics at work. They will lose money below a certain per barrel price point. Economics governs a small company more than a big one. The big boys will likely plow right through this as they have millions in past profits and cash reserves to draw from. The new small company's not so much. In the price territory we are in now you will see some small players drop out maybe temporarily but drop out enough to reduce US oil supply on the market. If you are a small company you can't operate at a loss for very long. And we have several new small players in the fracking business.

John_PA · Jan 5, 2015

The thing is, the small guys, when they back off, get gobbled up by the bigger ones in the region, because of those millions in profit. Then the bigger ones get even bigger. Why put money in a bank and get less than half a percent of interest, when you could invest in real assets that have gained over 1000% in just the time between 2005 and 2015? That is not an exaggeration. I'm living it.

I just wish my ship would come in. I saw a local guy the other day who was having his driveway paved. The same guy, 10 years ago was breaking field rocks to fill the potholes on that very same driveway... something to think about.

OPEC is pushing this low on purpose to try to stop these U.S. drillers, but what they aren't taking into account is that the need for oil is not going to get any smaller. It is only going to get bigger and bigger. History can back me on that.

JMS/.MN · Jan 5, 2015

$85.30 for me today at Cenex Co-op.

Ian Beale · Jan 6, 2015

GeneMo

For relativity on 100 (45kg) cylinders of lpg.

In our part of Oz they're $A148. West of us at Thargomindah they're $A240.

$A = about $US0.81

Spudm · Jan 6, 2015

Over the weekend I stopped and put gas in the truck, I made a comment to the Attendant, "It's nice to see lower gas prices" all I get was a cold, hard stare at me. What is that supposed to mean?
A couple of days ago I stopped at a local gas station for kerosene, $4.69 per gallon, really?
I asked the Attendant "Why is kerosene so high"? Again I get the fish look, "I don't know, she says".

mkirsch · Jan 6, 2015

You're reading into a gas station attendant's reaction?

What's she going to know about the company she works for or the future of the world oil market? She's working a miserable minimum-wage job because the system that supposedly encourages people not to work and just hands out money to anyone for no reason at all, has denied her.

She has no idea, and doesn't care. Her reaction is more, "Why is this a$$hole talking to me?" than anything else.

mkirsch · Jan 6, 2015

BTW, kerosene is so high because nobody uses it anymore, at least not on the scale it once was used.

The fuel companies have to make special trips with special trucks to deliver a few gallons at a time. That makes it expensive to distribute.

WGM · Jan 6, 2015

We sure have been down this road before. It's always Bush and the nnalert who are at fault. Never has anything to do the the "something for nothing gang" presently in the White House.

MarkB_MI · Jan 6, 2015

wgm, are you suggesting that our beloved President is responsible for the low gas prices we had right before he actually came into office? I think both ol' John and I would have to disagree with you on that. As remarkable as his talents might be, I don't think he could have pulled that one off.

W_B · Jan 7, 2015

(quoted from post at 01:15:34 01/06/15)
...So, oil is more than half what it was a year ago. They said heating oil is around $3 and last year $4.

How much did gas fall from last year? Sounds like some have lower prices than I have, $1.94.

Just paid 2.99/gallon for heating oil, was 3.90 somthing last winter. Just last night paid 1.72 /gallon for gasoline (get a 3c discount for cash) but after I filled the clerk was upping it to 1.99, after she filled her own truck. This in Central Ohio.

Find this hard to believe, US oil

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