Layoffs hit the oil patch, and the worst is yet to come (gas price, conspiracy)
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With oil prices being suppressed by high inventories and OPEC manipulation, countries like Venezuela and Russia are forced to pump even more oil which only forces prices down further. It's a vicious cycle.
I work in a petroleum refinery, and there is never any perspective.
Throughout much of the twentieth century, the price of U.S. petroleum was heavily regulated through production or price controls. In the post World War II era, U.S. oil prices at the wellhead averaged $28.52 per barrel adjusted for inflation to 2010 dollars
Adjusted for inflation, from 1947 to 2010 oil prices only exceeded $20.53 per barrel 50 percent of the time. (See note in the box on right.)
Until March 28, 2000 when OPEC adopted the $22-$28 price band for the OPEC basket of crude, real oil prices only exceeded $30.00 per barrel in
The Long Term View
The very long-term view is similar. Since 1869, US crude oil prices adjusted for inflation averaged $23.67 per barrel in 2010 dollars compared to $24.58 for world oil prices.
Fifty percent of the time prices U.S. and world prices were below the median oil price of $24.58 per barrel.
If long-term history is a guide, those in the upstream segment of the crude oil industry should structure their business to be able to operate with a profit, below $24.58 per barrel half of the time. The very long-term data and the post World War II data suggest a "normal" price far below the current price. However, the rise of OPEC, which replaced the Texas Railroad Commission as the monitor of spare production capacity, together with increased interest in oil futures as an asset class introduced changes that support prices far higher than the historical "norm.”
The industry can function without even $50 dollar a barrel oil. It has most of the time.
Cheaper oil in the short term if one removes the environmental costs is better for the economy hands down no debate.
IMHO the Feds NEED to set up a tax that kicks in on any imported oil, at least "OPEC" oil to keep it at 50 dollar a barrel or higher if is goes below that number. But that tax is suspended when oil goes back above that 50 dollars. Tho the cutoff would need to be indexed to inflation.
IMHO the Feds NEED to set up a tax that kicks in on any imported oil, at least "OPEC" oil to keep it at 50 dollar a barrel or higher if is goes below that number. But that tax is suspended when oil goes back above that 50 dollars. Tho the cutoff would need to be indexed to inflation.
Thanks but I'll take my chances on the free market. More government intervention is not something I am fond of in any circumstances. It will all come full circle again as it has in the past.
Thanks but I'll take my chances on the free market. More government intervention is not something I am fond of in any circumstances. It will all come full circle again as it has in the past.
I'm with you on this one.
Government intervention will only open the door for more graft and corruption.
IMHO the Feds NEED to set up a tax that kicks in on any imported oil, at least "OPEC" oil to keep it at 50 dollar a barrel or higher if is goes below that number. But that tax is suspended when oil goes back above that 50 dollars. Tho the cutoff would need to be indexed to inflation.
Cant stand to see people keeping more of their money eh?
Location: SF Bay Area (recent MN transplant...go gophers)
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Two things: first, the people saying that the diversified economy of the US as a whole (and California in particular) cause a situation in which it is far more economically preferable to have low oil/gas prices than high gas prices are right. In fact, it can be assumed that the economy of nearly every state save for a select few are going to be actually improved based on this situation. Because we are neither Russia nor Saudi Arabia nor any other OPEC country, really only a small handful of economic sectors at most will reel from this drop in prices. And those economic sectors have been having a lot of fun over the past 6 years anyway.
In other words, North Dakota and Wyoming don't like lower oil prices. Minneapolis/St. Paul and Denver, however, do like lower oil prices, and they're simply more important to the nation's economic health. One step back, three steps forward.
Second,
Quote:
Originally Posted by steven_h
This is great for consumers, but here in Cali the taxes on gas have kept it well above $3, so the lower prices aren't translating here as much as in other states.
We dropped below a $3 average in early December and have careened down $1 per gallon over the past 3 months. That is a LOT of economic stimulus for anybody who drives a car to work. I personally am saving $20 per month at the pump compared to October 2014, and I have a sub-10 mile commute and a 40mpg car. Long term, this would bring down food prices and give any person with an hourlong commute or anything above a minivan a swift, stimulating kick in their budget's keister.
IMHO the Feds NEED to set up a tax that kicks in on any imported oil, at least "OPEC" oil to keep it at 50 dollar a barrel or higher if is goes below that number. But that tax is suspended when oil goes back above that 50 dollars. Tho the cutoff would need to be indexed to inflation.
I will pass, tell me how well having a large amount of government income has worked out for Russia and Venezuela at the moment.
$4 a gallon gas was hurting the economy far, far worse than whatever layoffs will occur in the O&G industry as a result of far lower prices. If you work in a cyclical industry, you have to play your cards smart.
A 22-24 year old man who graduated college into the economic abyss of 2008, decided to hit the oil patch and worked there for $100K a year until getting laid off today, that kid is now just pushing 30 and could have a paid off home with hundreds of thousands in the bank.
Make hay while the sun shines. The sun shone very bright on that world for the better part of the past half decade.
Agreed. And how stupid are the people rushing to buy gas guzzling SUVs and trucks now that gas prices are down... instead of putting the money saved at the gas pump into a savings account?
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