Do you know what price they need to charge per gallon to make drilling worth it? I don’t. For all we know, they may make lots of money at $40/barrel.
I know they won’t ever tell us, too.
Until you get the bill for 4,000 gallons.
The $2-$2.50 seems way better.
I don't really disagree, on a micro economic scale, but on a macro, stabile prices are more important than low prices.
I know guys that won continuing service contracts, at $2.25 gas/$2.75 diesel; and had no price escalations built in, at $4.50 diesel. They were loosing their butt's, and some of these are 3 year contracts.
For an average American, driving 12,000 miles per year, at $3.00/gal, getting a moderate 25 mph, 480 gal per year=$1440; vs $3.50/gal=$1680. Thats $240/year difference.
It's big effects are also regional; let oil go sub $50/barrel, and drive around Louisiana/Mississippi, and you will see the affects. If you drive through NY, it's probably the opposite effect.
What I never understood, the folks that Really focus on MPG are often the folks driving the least. If you have a 5 mile commute to work, it doesn't matter if you have an 8.1L Vortex getting 8 mph, or a Prius getting 45 mph, gas doesn't even show up on your budget.
Edit: my mom for instance was talking about getting a hybrid, and the great milage. She drives about 5000 miles per year now that she's retired. Same with a lot of people in larger metros, gas isn't even in their top 5 expenses. For a lot of rural guys, gad may be in the 2nd or 3rd overall expense...
