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Thread: $69.00 Oil

  1. #1
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    $69.00 Oil

    never thought I'd see that again....funny how circumstances change

  2. #2
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    You just waited until it hit that number, didn't you?

    On-topic: oil's fairly cyclical.

  3. #3
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    And I have no doubt we will see $100+ per barrel again too. This is just a reflection of the economic downturn.

    If anyone is interested here is a graph of light crude oil prices, back to 2000. So, we are basically back to the price we were at in mid-2007.
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  4. #4
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    I have noticed, however, that gas prices have not followed suit.

    Remember when the excuse for high gas prices was the high price of oil? Well, well, well....I guess there's only one direction for that type of pricing...

    Pete

  5. #5
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    Gas prices have gone down into the $2.75-ish range here in New Jersey (and falling quickly), where previously they had gone up to around $4.00, so the price is at least somewhat reflective of the change, if a bit delayed.

  6. #6
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    Quote Originally Posted by peter eldergill View Post
    I have noticed, however, that gas prices have not followed suit.

    Remember when the excuse for high gas prices was the high price of oil? Well, well, well....I guess there's only one direction for that type of pricing...

    Pete
    They have around here. Within the last month gas was well over $3 (US) per gallon. I just paid $2.69 yesterday, and I've seen it around $2.55.
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  7. #7
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    Quote Originally Posted by peter eldergill View Post
    I have noticed, however, that gas prices have not followed suit.

    Remember when the excuse for high gas prices was the high price of oil? Well, well, well....I guess there's only one direction for that type of pricing...

    Pete

    Gas prices sure are falling in the DC area!

  8. #8
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    Oil drops from $120 to $70, a drop of about 45%

    Price in your area from 3.00 to 2.50, aabout 18 % drop in gas price...

    We were told that the price of gas in Canada should be *roughly* 1 cent per dollar price of oil, so between $.75/litre and $0.80/litre . Our current price in Toronto (about 20 minutes ago) is $1.04/litre or over $4 a gallon...

    I'm a little annoyed, because the excuse to go up was commodity prices/futures and now that it's going down....

    Pete

  9. #9
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    I certainly understand your annoyance and I'm not making excuses for the oil companies. Some of it also might be transport time - the $75/barrel oil sold in Kuwait today, doesn't make it to North America for another month, plus refining time, etc. And raw material cost is only part of the whole thing. But I have noticed for many years that prices go up much faster than the come down - imagine that.
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  10. #10
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    Price from $4.00 to $2.75 is about a 31% drop. And it could conceivably go lower.

    I don't know why it would be different in your area, but there are a lot of factors that could be causing that, I suppose.

  11. #11
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    Also, 100% of the price of gas is not oil--there are also (practically) fixed components of the price--taxes (a huge bite in some places), cost of running a gas station, transportation, refining, etc.

    I don't know the numbers, but if 50% of the cost of gas is from the price of oil, and oil goes down 50%, then the price of gas goes down about 25% (a little more, since transportation becomes a little cheaper, and those taxes at the sales end are dependent on the sale price).

  12. #12
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    Our gas prices were well over $4 here--we pay a fair amount in gas taxes here in Washington--and the gas station down the street is now down to about $3.30 or so, last I looked. Recently, it was dropping as much as a nickel a day.
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  13. #13
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    I find it interesting that the stock markets ignore the price of crude. For the last few years , and especially a few months ago, the price of oil skyrocketed, which is a tremendous burden on the economy, and the stock market didn't seem to notice. More recently, when the oil prices are in freefall, which should help the economy, the market doesn't notice either. The explanation is supposedly that oil is a leading indicator, so if oil is going down, that means that the economy is going down in the near future. That may or may not be true in some markets, but I feel that in this market, the reduced energy costs will be a benefit to the economy. It probably won't prevent a recession, but every time I fill up my car, I have $20 more left over in my pocket than I did in July. In the course of a few months, that adds up to more than the economic stimulus check I got back in May. I think that the computer trading models are out of sync with the current world economy, and these programs are a large part of the volatility of the stock market (just as they were in 1987).

  14. #14
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    Think interest rates.

    Think about whether or not the company you are lending to may declare bankruptcy within the year.

    Why everyone in the financial world thought Mortgage-Backed Securities (MBS) were as reliable as gold is something I've never understood.

  15. #15
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    U.S. fuel demand averaged about 18.6 million barrels a day during the past four weeks, the lowest since June 1999. Looks like people in the US are making substantial cutbacks.

    Fortunately for those worried about peak oil, OPEC says it plans to cut back production by a million or so barrels which will prevent prices dropping too much lower and will push back the day when the world's easily extracted oil is exhausted.

  16. #16
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    I must have missed a few days--we're at $2.99 a gallon now.
    _____________________________________________
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    "Now everyone was giving her that kind of look UFOlogists get when they suddenly say, 'Hey, if you shade your eyes you can see it is just a flock of geese after all.'"

    "You can't erase icing."

    "I can't believe it doesn't work! I found it on the internet, man!"

  17. #17
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    Quote Originally Posted by Ronald Brak View Post
    U.S. fuel demand averaged about 18.6 million barrels a day during the past four weeks, the lowest since June 1999. Looks like people in the US are making substantial cutbacks.

    Fortunately for those worried about peak oil, OPEC says it plans to cut back production by a million or so barrels which will prevent prices dropping too much lower and will push back the day when the world's easily extracted oil is exhausted.
    They're meeting next month to decide how much to cut production. One hopes that they'll remember that cutting it too much will kill what's left of the global economy, but I wouldn't hold my breath on that.

  18. #18
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    It's nice to see how happy people are that oil prices are down after there was so much concern over the oil price bubble.

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  19. #19
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    Quote Originally Posted by Gillianren View Post
    I must have missed a few days--we're at $2.99 a gallon now.
    Around here premium is about $3.50 a gallon, but at the peak, it was well over $4.50 a gallon.

    "The problem with quotes on the Internet is that it is hard to verify their authenticity." Abraham Lincoln

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  20. #20
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    Quote Originally Posted by Tuckerfan View Post
    They're meeting next month to decide how much to cut production. One hopes that they'll remember that cutting it too much will kill what's left of the global economy, but I wouldn't hold my breath on that.
    OPEC falls apart when oil prices are low. Every member except Saudia Arabia cheats on the quotas and the result is no change in supply and lower oil prices. It all depends on the elasticity of demand for crude oil. Back in the 70's the deman was inelastic. Then starting around 1982, it became elastic and stayed that way till about 2000. Then it became elastic again until this past July. Hopefully it will stay elastic for a few more decades, but I have my doubts. The dynamics have changed with the increased demand from China and India, along with the uncertainty about the supply of oil in the Middle East. It should be interesting, but I doubt if we will see $100/bbl oil any time in the next year.

  21. #21
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    Quote Originally Posted by tdvance View Post
    Gas prices sure are falling in the DC area!
    They were lagging a bit, but they finally started freefalling. From where I am just north of you, its been about 9 cents every four days or so.

  22. #22
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    This is the place for serious/boring oil stuff, if anyone's interested:

    http://www.theoildrum.com/

  23. #23
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    My stepson used to keep me waiting every morning and make me late for work. I finally told him to be ready at 6:55 or I was leaving him at home. He wasn't and I did. He's never been late since. I hate to be late.

  24. #24
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    Quote Originally Posted by Tinaa View Post
    My stepson used to keep me waiting every morning and make me late for work. I finally told him to be ready at 6:55 or I was leaving him at home. He wasn't and I did. He's never been late since. I hate to be late.
    Tinaa, I think you meant to post in another thread...

  25. #25
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    I hope you don't hate to post in the wrong topic...

    Diesel prices are 1.07 at my local gas station. They were as high as 1.34 before, but the last 10 days they've dropped from 1.17 to 1.07, so it's not one single freefall. But at least we're getting close to the 1€/l mark again, and diesel is clearly the cheaper fuel again (a while ago, that difference somehow was gone...).
    With sufficient thrust, water towers fly just fine.

  26. #26
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    Well, I saw $2.89 gas this afternoon in DC area--that's got to be a multi-year low.

  27. #27
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    Without getting political...gas prices dropped dramatically before the last presidential election and starting rising again the very next day. And now here we go again...

    Supply and demand. Right.

  28. #28
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    Quote Originally Posted by Daffy View Post
    Without getting political...gas prices dropped dramatically before the last presidential election and starting rising again the very next day. And now here we go again...
    How do you consider that not getting political?

    Gas prices drop pretty much every autumn, whether there's a presidential election or not.

    Quote Originally Posted by Daffy View Post
    Supply and demand. Right.
    Absolutely right.
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  29. #29
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    Quote Originally Posted by SeanF View Post
    How do you consider that not getting political?

    Gas prices drop pretty much every autumn, whether there's a presidential election or not.


    Absolutely right.
    Fool me once, shame on you; fool me twice, shame on me.

    Gas prices are determined by crude prices...no, wait, they are determined by speculation...no wait...they are determined by weather shutting down refineries...no, they are determined by time of year! That's it! And Fall ends the day after the election!

    Got it.

  30. #30
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    Quote Originally Posted by Van Rijn View Post
    Around here premium is about $3.50 a gallon, but at the peak, it was well over $4.50 a gallon.
    Premium's still at about $3.25 or so here.
    _____________________________________________
    Gillian

    "Now everyone was giving her that kind of look UFOlogists get when they suddenly say, 'Hey, if you shade your eyes you can see it is just a flock of geese after all.'"

    "You can't erase icing."

    "I can't believe it doesn't work! I found it on the internet, man!"

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