Oil Drops over 30% since summer, now what?

[wroughtn_harv]

Last August we took a trip to New Mexico and Arizona with the truck and fifth wheel. The cheapest diesel we found was here at home in Wylie, TX, $4.39 gallon. Today that same station has gas for $2.41 and diesel for $3.19.

As for OPEC, this isn't their call. Do you think for a minute that American oil is going to voluntarily cut back on production to bring up the price like OPEC would? OPEC is going to allow the new guys flooding the market to bankrupt themselves and they will still be here when it all shakes out.

 

[Country Geek]

I think Saudi Arabia can afford to pump oil down to $45/Barrel, but Russia and Iran need oil prices above $95/Bl otherwise their economies aren't funded.

This is getting close the truth. The US and Saudi Arabia are working together to screw Iran and Russia. It's really that simple, and was predicted a couple of months ago here: Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia | Zero Hedge

Some of the theories that this a plot to wreck fracking just don't make any sense. OK, so suppose the Saudis push oil down low enough to drive the frackers out of the market. Then with less supply the price goes back up, and then what happens? The frackers get right back into it and drive the price down again. So the only way the Saudis can keep the frackers out of the market is to get less money for their oil, which defeats the whole purpose of driving them out. I'm sure they'd rather get more money for their oil and they don't care who else gets money as long as they get theirs.

 

[KiotiKowboy]

Just a couple of random thoughts ...

I read some articles a while back that claimed oil was a "renewable" resource. I've always felt this was true, as I find it impossible to imagine we are still pumping/discovering oil from dead dinosaurs and whatnot.

On prices, you can bet the government will see lower prices as a chance to add EVEN MORE taxes to each and every gallon.

 

[wroughtn_harv]

Just a couple of random thoughts ...

I read some articles a while back that claimed oil was a "renewable" resource. I've always felt this was true, as I find it impossible to imagine we are still pumping/discovering oil from dead dinosaurs and whatnot.

On prices, you can bet the government will see lower prices as a chance to add EVEN MORE taxes to each and every gallon.

Interesting observation. Current federal gas tax was enacted 1994 when gas was $1.11 gallon. Too bad it wasn't indexed to the current gas prices, maybe we would have better roads and bridges.

 

[charlz]

A few weeks before the price drop really started there were 'rumors' that the big banks were getting their traders out of the oil market. So either the exodus of speculators brought the market down or they knew something was coming and started getting out.

 

[charlz]

Interesting observation. Current federal gas tax was enacted 1994 when gas was $1.11 gallon. Too bad it wasn't indexed to the current gas prices, maybe we would have better roads and bridges.

The Federal Highway fund has been broke for a few years now... pretty much since the economy went in the crapper. I could see a push coming where the government would 'offset' some of the 'savings' of lower fuel prices with more taxes to fund highways etc. Since 'we' are already saving so much money with lower fuel prices why not give some to Uncle Sam?

 

[dmccarty]

Has anyone noticed that diesel is still 3.99/gal ? The price has not changed 1 bit in more than a year.

Diesel has fallen at my place. It has been around 3.85 or 3.89 for quarter after quarter after quarter but is now down to 3.42-3.75. Regular gas is 2.50-2.75.

Later,
Dan

 

[KiotiKowboy]

The Federal Highway fund has been broke for a few years now... pretty much since the economy went in the crapper. I could see a push coming where the government would 'offset' some of the 'savings' of lower fuel prices with more taxes to fund highways etc. Since 'we' are already saving so much money with lower fuel prices why not give some to Uncle Sam?

If the federal highway fund is broke, it is most likely due to government abuse/mismanagement of the fund. And, as for "saving so much money", it's quite a stretch to say paying around $2.50 per gallon for gasoline that isn't worth over $1.00 qualifies as "saving."

 

[tcartwri]

It's amazing the buzz this is creating on the web. The conspiracy nuts are in full overdrive.

 

[charlz]

If the federal highway fund is broke, it is most likely due to government abuse/mismanagement of the fund. And, as for "saving so much money", it's quite a stretch to say paying around $2.50 per gallon for gasoline that isn't worth over $1.00 qualifies as "saving."

Yep, which is why I used quotes Kinda sad when gas gets under $3 and people think its a good deal.