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-   -   Economics Why haven't oil prices dropped like a rock? (https://www.chiefsplanet.com/BB/showthread.php?t=269520)

Dayze 01-31-2013 10:36 AM

I remember in 2008 when I got laid off; we we lived about 35-40 miles from work; our fuel bill each month was around $450-500/mo.....and that was when gas was around $2.50 i think.

I'd hate to think what our fuel bill would be now, or in the future had we stayed there.

bevischief 01-31-2013 12:07 PM

Quote:

Originally Posted by Stewie (Post 9367215)
Oil production increases mean nothing when refinery capacity isn't allowed grow.

Bingo. A lot of the new oil is sold to other countries as well.

RaiderH8r 01-31-2013 02:28 PM

Crude oil remains a global commodity. If you want to see what happens to an energy price when America truly commits itself to producing I give you the natural gas prices here.

http://www.eia.gov/dnav/ng/hist/n9190us3a.htm

You see the trend from when unconventional production takes off to now and the price drops roughly 50% to today's price. Natural gas is a regional market, meaning we don't currently have export facilities to scale. Hell, before 2008 companies were investing in LNG import terminals to bring crude to the US market. Lo and behold we find ourselves in an energy revolution and the prices come down. As America continues (or damn well ****ing should) produce unconventional crude oil to put on the global market prices will come down and/or America will reap the benefit of high prices and the infusion of the corresponding foreign capital. That is if we don't **** it up. Face it, idiot ****ing liberals will **** this up. Dumbasses.

Amnorix 01-31-2013 02:59 PM

The price per gallon of gas at the pump is subject to a massive number of variables, and US production of crude isn't directly corollary to pump prices.

Iowanian 01-31-2013 03:05 PM

Insert ObamaSong here.

HemiEd 01-31-2013 03:14 PM

Quote:

Originally Posted by Stewie (Post 9367215)
Oil production increases mean nothing when refinery capacity isn't allowed grow.

This and the fact that it is a world market, where we are no longer the pandered to or preferred consumer.

Amnorix 01-31-2013 04:20 PM

Quote:

Originally Posted by petegz28 (Post 9367286)
It's almost like clockwork


You understand that the President doesn't have much/any control over short term oil prices? That worldwide, integrated, highly sophisticated commodities markets determine the prices for crude and that car gasoline, which is only one of MANY byproducts of crude oil, is subject to many additional factors affecting price, including refining capacity?

Or, of course, it's a conspiracy...

petegz28 01-31-2013 04:24 PM

Quote:

Originally Posted by Amnorix (Post 9368318)
You understand that the President doesn't have much/any control over short term oil prices? That worldwide, integrated, highly sophisticated commodities markets determine the prices for crude and that car gasoline, which is only one of MANY byproducts of crude oil, is subject to many additional factors affecting price, including refining capacity?

Or, of course, it's a conspiracy...

I never said Obama had anything to do with the weak $, did I?

RNR 01-31-2013 04:51 PM

Quote:

Originally Posted by Amnorix (Post 9368318)
You understand that the President doesn't have much/any control over short term oil prices? That worldwide, integrated, highly sophisticated commodities markets determine the prices for crude and that car gasoline, which is only one of MANY byproducts of crude oil, is subject to many additional factors affecting price, including refining capacity?

Or, of course, it's a conspiracy...

Gee the left seemed to think he did until their boy got elected~

BlackHelicopters 01-31-2013 04:52 PM

Ride a bicycle.

KC native 01-31-2013 06:09 PM

Quote:

Originally Posted by RaiderH8r (Post 9368064)
Crude oil remains a global commodity. If you want to see what happens to an energy price when America truly commits itself to producing I give you the natural gas prices here.

http://www.eia.gov/dnav/ng/hist/n9190us3a.htm

You see the trend from when unconventional production takes off to now and the price drops roughly 50% to today's price. Natural gas is a regional market, meaning we don't currently have export facilities to scale. Hell, before 2008 companies were investing in LNG import terminals to bring crude to the US market. Lo and behold we find ourselves in an energy revolution and the prices come down. As America continues (or damn well ****ing should) produce unconventional crude oil to put on the global market prices will come down and/or America will reap the benefit of high prices and the infusion of the corresponding foreign capital. That is if we don't **** it up. Face it, idiot ****ing liberals will **** this up. Dumbasses.

And you're a dipshit for insinuating that we have oil reserves comparable to our NG reserves.

KC native 01-31-2013 06:20 PM

But there are several reasons why oil won't drop.

1. Quantitative Easing: All that money has to go somewhere. Correlations between asset classes are pushing towards 1.

2. The growth of the futures market: There has been a tremendous growth in prop trading, managed futures accounts, ETFs that track commodities, mutual funds that focus on commodities and real estate in a "real return" strategy. Oil futures need to have their trading curbed immediately (not eliminated, position limits, limitations on the type of players that can buy the contracts, etc). It's ridiculous that such a vital commodity can be pushed around by people with no interest in the underlying commodity.

3. Global commodity. We are not the only country that uses a lot of oil.

4. Refining capacity: The oil companies (at least domestically) have been strategic about their capacity for refining. They have abused regulations in an attempt to blame the lack of capacity on EPA regs so they can eliminate current regs. When they were buying up all the small refiners they could, there should have been FTC inquiries. The only refiners that I'm aware of currently are all captive of the big oil companies.

RaiderH8r 01-31-2013 06:29 PM

Quote:

Originally Posted by KC native (Post 9368584)
And you're a dipshit for insinuating that we have oil reserves comparable to our NG reserves.

No, I am illustrating that the market does work because the OP implies it doesn't and that there is something more nefarious going on.

And our crude reserve base is ever expanding. The Bakken has been producing for almost 15 years and we still haven't clearly established the width or breadth of the formation, let alone the benches.

Check out the Monterrey shale in CA which is on par with the Bakken as well as Eagle Ford, Utica, Mississippi Lime and we quickly ramp up a tremendous reserve base in these unconventional plays. The basis for calculating reserve estimates is outdated and very conservative. And this is just onshore. America's energy potential to develop these plays is simply stunning. We commit to developing these plays and we will lead the world in crude production within a decade.

Oh, and get bent.

RaiderH8r 01-31-2013 06:31 PM

Quote:

Originally Posted by KC native (Post 9368605)
But there are several reasons why oil won't drop.

1. Quantitative Easing: All that money has to go somewhere. Correlations between asset classes are pushing towards 1.

2. The growth of the futures market: There has been a tremendous growth in prop trading, managed futures accounts, ETFs that track commodities, mutual funds that focus on commodities and real estate in a "real return" strategy. Oil futures need to have their trading curbed immediately (not eliminated, position limits, limitations on the type of players that can buy the contracts, etc). It's ridiculous that such a vital commodity can be pushed around by people with no interest in the underlying commodity.

3. Global commodity. We are not the only country that uses a lot of oil.

4. Refining capacity: The oil companies (at least domestically) have been strategic about their capacity for refining. They have abused regulations in an attempt to blame the lack of capacity on EPA regs so they can eliminate current regs. When they were buying up all the small refiners they could, there should have been FTC inquiries. The only refiners that I'm aware of currently are all captive of the big oil companies.

Marathon and Conoco just spun off their downstream assets and Valero is still a thriving independent refiner.

KC native 01-31-2013 06:32 PM

Quote:

Originally Posted by RaiderH8r (Post 9368620)
No, I am illustrating that the market does work because the OP implies it doesn't and that there is something more nefarious going on.

And our crude reserve base is ever expanding. The Bakken has been producing for almost 15 years and we still haven't clearly established the width or breadth of the formation, let alone the benches.

Check out the Monterrey shale in CA which is on par with the Bakken as well as Eagle Ford, Utica, Mississippi Lime and we quickly ramp up a tremendous reserve base in these unconventional plays. The basis for calculating reserve estimates is outdated and very conservative. And this is just onshore. America's energy potential to develop these plays is simply stunning. We commit to developing these plays and we will lead the world in crude production within a decade.

Oh, and get bent.

Just because it can be recovered, doesn't make it cheap. But carry on, acting like extracting oil at a loss will lower oil prices is brilliant.


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