Don't worry about $4-5 a gallon. It will crash the economy just like it did in 08.
I'm in a strange place with this. And I'm sure most any one else is that gets their income from the sale of oil. I'm happy when the price of oil goes up because me and my wife make more money but then I get pissed off because we end up spending more of that money we made on expenses tied to the sale of oil in higher gasoline and other petroleum products prices,higher natural gas prices to heat our home and run our stove,hot water tank,and then on almost anything we buy that has to be transported by something that runs on fuel- groceries,goods,etc,etc. Its an endless cycle.
75% of me and my wifes income is tied to oil: the sale of it (mine),and oil field equipment sales (hers). The price per barrel goes up so does my income via the sale of oil and my share of the profits and interest on our mineral rights. The oil companies make profits,mainly refineries,and then when they take profits and replace aging equipment then sales increase at my wifes small family run Tulsa company earning her more money in her paycheck as well as end of the year bonus's. But then our expenses increase like crazy. My wife commutes daily during the week back and forth from a small bedroom community 25 miles east of Tulsa into the city to go to work. And I travel quite alot when working as a touring musician, and then when not playing music I travel back and forth to Iowa and California checking on my partial interests in a couple of small tattoo shop businesses in both states besides helping my family with maintenance on family real estate in northern California. We both put in alot of miles on the road and high prices on gasoline and other petroleum fluids we need to maintain our vehicles with just about kill both of our budgets. Its crazy.
75% of me and my wifes income is tied to oil: the sale of it (mine),and oil field equipment sales (hers). The price per barrel goes up so does my income via the sale of oil and my share of the profits and interest on our mineral rights. The oil companies make profits,mainly refineries,and then when they take profits and replace aging equipment then sales increase at my wifes small family run Tulsa company earning her more money in her paycheck as well as end of the year bonus's. But then our expenses increase like crazy. My wife commutes daily during the week back and forth from a small bedroom community 25 miles east of Tulsa into the city to go to work. And I travel quite alot when working as a touring musician, and then when not playing music I travel back and forth to Iowa and California checking on my partial interests in a couple of small tattoo shop businesses in both states besides helping my family with maintenance on family real estate in northern California. We both put in alot of miles on the road and high prices on gasoline and other petroleum fluids we need to maintain our vehicles with just about kill both of our budgets. Its crazy.
Value of the dollar. At the rate we're going, it will wind up just North of the Peso.
This is such BS. Oil is a commodity and is traded on a global marketplace. Most of the world's oil is controlled by non-western state owned entities. The western oil companies have no more control of the price of oil than a farmer has on the price of wheat.
Do you know what it takes to get a gallon of gas in your tank. Companies must first spend billions of dollars on research and exploration to find the oil. It then has to be drilled out of the earth, often miles and miles below the surface. Most often in God-forsaken corners of the earth. It must be transported at great cost (big ships and pipeline systems are not cheap) thousands of miles to a refinery - again not cheap to build and operate. Once it has been refined it must be again transported to the consumer, on nearly every street corner for your convenience. All of this, and it is still cheaper than bottled tap water.
I think OPEC is a joke. I basically think we will be charged what we will continue to pay. They did this before when gas hit $3.50/gallon locally and close to $5/gallon in California. Meanwhile, every oil producing company produced record profits at this time.
The downside was that people stopped leaving their houses, stopped spending money eating out, etc., etc. Cost of goods also went up and the economy continued to suffer. I think the market has rebounded a bit, consumer confidence and spending have rebounded a bit and now OPEC is looking to get their share. My guess is they will continue easing up on the price until they start to feel consumer spending retract as a result.
I am normally not into conspiracy theories and I've probably oversimplified this issue. I admittedly have little evidence to support my opinion. If we are spending $5/gallon here and $7 on each coast, our most recent economical decline will not even compare to what's in store for us. The tree huggers will sure be happy and Obama will be able to sell a bunch of electric cars but I don't think it would be in OPEC's interest to orchestrate another economic collapse. I don't see us getting back to $3.50 a gallon. I could be wrong but I sure hope not.
The downside was that people stopped leaving their houses, stopped spending money eating out, etc., etc. Cost of goods also went up and the economy continued to suffer. I think the market has rebounded a bit, consumer confidence and spending have rebounded a bit and now OPEC is looking to get their share. My guess is they will continue easing up on the price until they start to feel consumer spending retract as a result.
I am normally not into conspiracy theories and I've probably oversimplified this issue. I admittedly have little evidence to support my opinion. If we are spending $5/gallon here and $7 on each coast, our most recent economical decline will not even compare to what's in store for us. The tree huggers will sure be happy and Obama will be able to sell a bunch of electric cars but I don't think it would be in OPEC's interest to orchestrate another economic collapse. I don't see us getting back to $3.50 a gallon. I could be wrong but I sure hope not.
I don't remember the economy being bad that was actually one of my best years i have had since 98 because a lot of people had all kinds of extra money that they haven't had before.
Well if you are a landman, you are probably dealing with folks who are vested in oil and gas. That was a banner year for them.
I have a customer in that situation, he and his wife bought each other $70,000 vehicles that year. They were all smiles every time they came. The higher the gas prices, the bigger the smiles. If you are convinced gas is going that high, it might be a good strategy to invest in exxon right now.
Somebody answer me this...
The price of crude has been rising (almost exponentially in the last ~10 years) for the last 30-40 years. However, the processes of extraction and transportation has changed very little. In fact, extraction and transportation has become more efficient (before some of you in the oil biz tries to argue with me, I know my crude, I guess you could say its in my blood).
How has crude more than doubled in 30 years, and 7x more than 40 years ago? For reference:
1975 ~$12USD avg
1980 ~$38USD avg
2010 ~$70USD avg
In this decade alone:
2000 ~$27
2001 ~$23
2002 ~$23
2003 ~$28
2004 ~$37
2005 ~$50
2006 ~$58
2007 ~$64
2008 ~$91
2009 ~$53
2010 ~$70
This doesnt have anything to do with US Production vs Importation. The price is driven off of Speculation and Concerns. Before 1970 (for reference OPEC started in 1960), oil was $3/barrel.
My solution to the "Energy Crisis" is simple. Buy the biggest vehicle you can, use up all the oil, and force valid alternatives (efficiency, power and cost) to surface.
I'm sort of in the same boat as NFF on this one. O/NG leases are really nice when this happens, but with the cost of everything going up, from Gas to Banannas,... its a bittersweet thing.
The price of crude has been rising (almost exponentially in the last ~10 years) for the last 30-40 years. However, the processes of extraction and transportation has changed very little. In fact, extraction and transportation has become more efficient (before some of you in the oil biz tries to argue with me, I know my crude, I guess you could say its in my blood).
How has crude more than doubled in 30 years, and 7x more than 40 years ago? For reference:
1975 ~$12USD avg
1980 ~$38USD avg
2010 ~$70USD avg
In this decade alone:
2000 ~$27
2001 ~$23
2002 ~$23
2003 ~$28
2004 ~$37
2005 ~$50
2006 ~$58
2007 ~$64
2008 ~$91
2009 ~$53
2010 ~$70
This doesnt have anything to do with US Production vs Importation. The price is driven off of Speculation and Concerns. Before 1970 (for reference OPEC started in 1960), oil was $3/barrel.
My solution to the "Energy Crisis" is simple. Buy the biggest vehicle you can, use up all the oil, and force valid alternatives (efficiency, power and cost) to surface.
I'm sort of in the same boat as NFF on this one. O/NG leases are really nice when this happens, but with the cost of everything going up, from Gas to Banannas,... its a bittersweet thing.
This is also what I have begun to realize.... individual conservation in these matters is not really conservation, it's just subsidizing the consumption of the regular consumer.
(That doesn't mean you should throw batteries in the landfill or anything like that.)
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