1$/gal. gasoline? Maybe, but what does it mean really?

[kcflhrc]

It's gonna hurt the Oil Frackers for sure. Only the strong will survive. Cant afford to continue or to stop pumping oil. Lots of loans coming due that they cant pay. I'm sure the Government will bail them out like the auto makers.

 

[murphy1244]

1.23 in Medina Ohio today

 

[kcflhrc]

Lowest in the Kansas City area today looks to be $1.19

 

[mjarrels]

Two weeks ago, I had enough points on my Martins store card to earn a 90 cent fuel discount which would have made gas less than a dollar a gallon. I'm suprised that states have not increase fuel taxes yet while the cost remains low.

mark

 

[aczlan]

Two weeks ago, I had enough points on my Martins store card to earn a 90 cent fuel discount which would have made gas less than a dollar a gallon. I'm suprised that states have not increase fuel taxes yet while the cost remains low.

mark

Generally, fuel taxes are a fixed price per gallon, not a percent of the sale price.

Aaron Z

 

[MinnesotaEric]

Yesterday I filled up my truck for $1.59 a gallon and fond memories of the late nineties came back to mind. A 40 gallon barrel of West Texas Intermediate (WTI) once refined makes about 19 gallons of gasoline, 12 gallons of diesel, 4 gallons of jet fuel, and some other, heavier oils and goops.

Currently WTI is trading at $27.58 a barrel, which means that a barrel of oil is as cheap as a barrel filled with dirt. The reason oil is so cheap is because our oil companies are cranking out as much oil as they can, flooding the market as they do so, in order to service their debt. Oil producers will continue to flood the market until they either go bankrupt, or a geo-political shock hits the oil market.

Even so, supply will come down as production tapers from existing wells and the rig count deteriorates leading to a reduction in supply and oil prices will reverse and begin moving upward.

In the three graphics included below with this post you can see the cost of a barrel of oil relative to the cost of dirt at a big-box retail store, the bull and bear outlook for oil prices, and here is where the magic happens, every oil ETF that any investor can buy whether they are short or long on oil.

Anyway, oil storage capacity is getting bumped into now leading to increased downside risk for oil futures contracts because without a place to store oil, drillers must dump oil onto the open market for whatever price they can get.

I'll buy oil with both hands if the futures contract break into the teens on landlocked storage problems.

Goldman Sees Risk of Oil Below $20 - Bloomberg Business

 

[kcflhrc]

It's just all speculation and unfortunately the speculation puts folks in a panic because they don't know any better. No one knows what the demand will be in July through December. Sure the demand goes up in the summer, but doesn't it always? We should all record the news from one year to the next because all the same BS gets repeated every year at the same time every year. But people are so damned stupid anymore they don't remember what happened this time last year. Rant over!

 

[davesl708]

It's just all speculation and unfortunately the speculation puts folks in a panic because they don't know any better. No one knows what the demand will be in July through December. Sure the demand goes up in the summer, but doesn't it always? We should all record the news from one year to the next because all the same BS gets repeated every year at the same time every year. But people are so damned stupid anymore they don't remember what happened this time last year. Rant over![/QUOTE]

That's how politicians get re-elected

 

[NoTrespassing]

Here's one that's good for a laugh. Rick Wagoner the very highly paid chairman and chief executive said in 2008;

“These prices are changing consumer behavior and changing it rapidly,” Mr. Wagoner said before G.M.’s annual meeting in Wilmington, Del. “We don’t believe it’s a spike or a temporary shift. We believe it is permanent.”

“I think G.M. is basically declaring the S.U.V. dead,” said John Casesa, managing partner of the auto consulting firm Casesa Shapiro Group in New York. “The trend away from these vehicles is irreversible.”

“The Chevy Volt is a go,” Mr. Wagoner said. “We believe this is the biggest step in our industry’s move away from our historic, virtually complete reliance on petroleum to power vehicles.”

http://www.nytimes.com/2008/06/04/business/04motors.html?_r=0

 

[300UGUY]

Here's one that's good for a laugh. Rick Wagoner the very highly paid chairman and chief executive said in 2008;

典hese prices are changing consumer behavior and changing it rapidly, Mr. Wagoner said before G.M.痴 annual meeting in Wilmington, Del. 展e don稚 believe it痴 a spike or a temporary shift. We believe it is permanent.

的 think G.M. is basically declaring the S.U.V. dead, said John Casesa, managing partner of the auto consulting firm Casesa Shapiro Group in New York. 典he trend away from these vehicles is irreversible.

典he Chevy Volt is a go, Mr. Wagoner said. 展e believe this is the biggest step in our industry痴 move away from our historic, virtually complete reliance on petroleum to power vehicles.

http://www.nytimes.com/2008/06/04/business/04motors.html?_r=0

Wagoner had some bad points, but he wasn't the only one to miss that signal. If there was one. Every auto firm in the world was planning electrical projects when gas was $4 - $5. Ford, the Japs, the Euros, all had electric programs. One thing about modern society is that things change much quicker than they did a generation ago. You look at some of the old cars, they went decades without major changes. One example is the Chevy 350 V8. It was built in the same plant in Flint, from 1954 to 1998? 54 years. By 1998, we were building the Gen 2 engines, then the Gen 3, and by 2007, the Gen 4. All V8's, but the technology moves very fast now, and product cycles are much shorter. There are mistakes that will be made. Nobody is gonna hit 1000!

Wagoner, Inho, should have paid more attention to finance. Locking in credit lines would have been cheap in 2005 or 06. By 2008, it was game on....

And the "consultants" are a joke. One problem with the big companies, is that the same folks are running things forever. It is very common for execs to have a "good back ground", be a "car guy". That frequently means that daddy was a exec, and got junior a job. And the consultants usually don't have any idea what they are talking about. You could get better analysis sitting on a bar stool in Detroit.