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Although crude oil is currently in abundant supply on the domestic and global markets, refinery capacity in the USA for gasoline and diesel runs on a tighter leash. Sometimes it only takes one or two refineries going off line for maintenance, safety or upgrades, and suddenly in one or more regions in the US gasoline or diesel can be in short supply. California is probably the most vulnerable to this because of special fuel blends required. Fortunately here in southern AZ most refined fuels are piped in from west Texas or eastern New Mexico.
The talk about "peak oil" probably referred to the oil that was relatively easy to pump out of the ground or shallow ocean shelf, without the need for more difficult (and expensive) fracking, deep water drilling or remote arctic exploration. Yes, they are still finding more sources of easy oil to pump out of the ground or shallow water, but many of them are in places where it is not easy to get the oil to market.
Oil and gas prices have been dropping for a while it seems, but why?
Can it be the Corona Virus? Is China restricting travel, or are other countries barring flights from China? Less flying means less oil being used, more supply for other places and things. Also winter has not been so cold at least in the NE USA.
well im a oil driller and there's a glut of West Texas Intermediate currently,then we had a warm winter and the Corona virus which has all contriibuted to lower prices. However there will be another oil boom at some point but i dont know how low the oil will get and how bad the industry will suffer.
The country is becoming energy independent. We don't rely on the ME for oil as much as we used to. The increase in fracking helps.
We export most of that oil and are not even close to being independent. We basically aren't setup to use the oil we have and export it, increasing global supply but we are far from oil independent unless we build new refineries which hasn't happened in a good while.
More or less since 2012 oil supply has boomed, mostly due to the United States but it isn't correct to say we are independent because we still import a lot of oil. We just export a lot more since 2012.
We export most of that oil and are not even close to being independent. We basically aren't setup to use the oil we have and export it, increasing global supply but we are far from oil independent unless we build new refineries which hasn't happened in a good while.
More or less since 2012 oil supply has boomed, mostly due to the United States but it isn't correct to say we are independent because we still import a lot of oil. We just export a lot more since 2012.
Notice or imports are running about the same over the last decade.
That's a simplification, but mostly correct. The good news is that the heavier oil we import is cheaper than the light oil we export, so there's extra profit in there.
Many refineries in the US are optimized for heavy crudes from Mexico, Venezuela, West Africa and some Saudi blends. Processing the light crudes produced in the US in those refineries is inefficient, and wastes molecules.
I don't care why, just as long as it keeps on falling.
That would be a foolish wish. Oil still makes up a significant part of the economy for some states and if you start to see oil crash anymore you will see significant unemployment in those states as well as bankruptcy filings spike.
In addition, it isn't just oil. Parts, service, suppliers, transporters etc are all reliant on these companies and there is a very long supply chain ranging from rough necks to engineers to boat captains to pilots to truckers etc.. that rely on the industry for their livelihoods.
Savings an extra thirty cents a gallon isn't going to be worth the economic impact that will come from oil prices plummeting.
Much less the global / economic instability that it would bring including global deflation and lack of growth.
That would be a foolish wish. Oil still makes up a significant part of the economy for some states and if you start to see oil crash anymore you will see significant unemployment in those states as well as bankruptcy filings spike.
In addition, it isn't just oil. Parts, service, suppliers, transporters etc are all reliant on these companies and there is a very long supply chain ranging from rough necks to engineers to boat captains to pilots to truckers etc.. that rely on the industry for their livelihoods.
Savings an extra thirty cents a gallon isn't going to be worth the economic impact that will come from oil prices plummeting.
Much less the global / economic instability that it would bring including global deflation and lack of growth.
Taking the opposite tack, a large runup in the price would also devastate the economy, including many of those occupations you mentioned.
When oil was dropping a couple months ago, before this virus scare, most of the decline was attributed to the so far mild winter.
It's following the prospects for the US economy. Since the beginning of February, WTIC has been moving lockstep with the US Dollar. It had been trading inversely to the US Dollar.
Fracking production tends to shift quickly in response to the price. A lot of people have been predicting it has already peaked. It's technically never earned a real profit (like Amazon, it looks like a economic restructuring story).
OPEC/Saudi is cutting prices while increasing productions targets which could target 20-30.00 oil of successful. They are making a market share play and trying to crush the shale/fracking effort
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