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This country is floating in oil.....
jltrent
Member Posts: 9,206 ✭✭✭✭
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So when demand goes up/is anticipated to go up prices will go up.
If a pipeline or a refinery have problems, prices go up because supply will go down.
I understand that many of our refineries are getting old and building new ones is difficult due to safety/environmental problems.
And all crude oils are not the same -- some are better for producing gas and some are better for heavier feed stocks.
Here's a graph showing the number of active oil rigs, a measure of how much new oil will be coming on-line to replace depleted wells.
Drilling a well is expensive and rigs will get parked if the price of oil doesn't support the cost of exploration.
I grew up on the edge of the Texas-Oklahoma oil field. When I was young there were always rigs in sight, especially at night. As I grew older the field was fully developed and few rigs were seen at work. Now the only rigs seen are the ones pulling pipe out of dry holes that are being abandoned.
There's a lot of infrastructure that has to be built to support a new oil field and it all takes time and money, and that money comes from folks buying fuel.
I just paid $2.49/gal for two twenty-pounders and a 100 pound tank, it is a lot cheaper for bulk deliveries. Where the hell do you live and did the guy charging you that much drive a Rolls Royce home at night?
I locked in at $1.29
Supply and demand...
Supply and demand is only half the equation. Price elasticity is the other half. Price elasticity is essentially a measure of how much wiggle room there is in pricing without affecting demand. And refined petroleum products have a large price elasticity. So prices at the pump can stay quite high and people will continue buying with minimal diminishing consumption. That's why prices are quick to go up, but very slow to go down and never go back down to prior lows.
quote:Originally posted by wpageabc
Supply and demand...
Supply and demand is only half the equation. Price elasticity is the other half. Price elasticity is essentially a measure of how much wiggle room there is in pricing without affecting demand. And refined petroleum products have a large price elasticity. So prices at the pump can stay quite high and people will continue buying with minimal diminishing consumption. That's why prices are quick to go up, but very slow to go down and never go back down to prior lows.
That's correct,, in a way,,, they do go down to prior prices,, but then go even lower and NOT adjusted for inflation.
Historically the low price "lasts a long time".
Trump is thinking way ahead,, can't have a good economy if inflation is rampant which much is tied to energy prices.
That's why Trump "slipped" opening ANWAR for drilling into the tax bill.
Had already taken the reins off oil companies for drilling and other
energy projects being held up by "big ears" and his minions.
Personally think the oil companies are better off selling MORE oil
for the same money per gallon.
Alaska has been running low on oil reserves to feed the * for at least a decade probably two.
If that would happen no new oil to feed the pipeline and very soon a
"shutdown". Result will be a MAJOR source of U.S. production will be GONE. Guess where prices would go?
PS: Takes from 1 to 5 years to develop new oil fields and production facilities.
Why are oil prices going up?
https://www.msn.com/en-us/money/markets/us-oil-production-booms-as-new-year-begins/ar-BBHBtx6?li=BBnbfcN
More likely The Joint Chiefs of Staff recommended to fill up the strategic oil reserves for War after selling off some for tax cuts for the rich.
serf
https://www.reuters.com/article/china-crude-reserves/update-2-china-accelerates-stockpiling-of-state-oil-reserves-over-2016-17-idUSL4N1OT2HF
https://www.wsj.com/livecoverage/tax-bill-2017/card/1512516136
FIVE BUCK PROPANE?
I just paid $2.49/gal for two twenty-pounders and a 100 pound tank, it is a lot cheaper for bulk deliveries. Where the hell do you live and did the guy charging you that much drive a Rolls Royce home at night?
Amerigas...a bunch of rapists [:(!]
I try my best to buy low! Then I just burn it![:D]
Even a poor guy can do stuff to feel rich!
I "play" my area gas stations pretty much like some of you high rollers play the stock market!
I try my best to buy low! Then I just burn it![:D]
Even a poor guy can do stuff to feel rich!
Hadn't thought about spending my money before burning it.