I thought we had become a net exporter of refined petroleum products.
Number one’s a huge part of what’s going on. So is the US contribution to supply. It’s just plain silly to think it’s “all” number 4 as if nothing else matters.
I think it’s also possible that the oil companies have been over producing for so many years, because the price was so high, that they have backlogged a huge surplus of oil that they just can’t keep off the market any longer. There are only so many places that you can hide the stuff.
The oil still has to be transported and refined and sent to market. The US has the best refine/transport system. Yeah, Saudis make a bigger profit
but US producers still make something and they supply a local market as we can’t export.
I get Conoco from Montana so it is all local stuff. We even have no ethanol 90 for the price of premium. Small engines last longer.
I think a decision was made to stop the soviet union from invading its neighbors by economically strangling them with cheap oil.
I no conspiracy theory stuff
Don’t forget about the value of the Dollar. A healthy robust Dollar makes for much more buying power, especially with a commodity that has historically been traded for Dollars. One our currency goes back in the crapper, oil prices will go back up.
What’s odd about current oil prices is how speculators have curtailed their knack for artificially bidding up prices every time a camel barfs in the desert.
This won’t last long too many powerful people and governments stand to lose with low oil prices. Someone will eventually do something desperate and then up it will go. Or the Fed will start back up with its money printing schemes and that will debase our money again.
My theory, which is my own, is based on the inelasticity of demand for gasoline. This is the same reason for the “oil shock” of the seventies. Inelastic demand means that people buy as much gas as they need, irrespective of price, within a certain range, of course. In the seventies, demand began to outstrip supply, and the price rose in response, but to no effect, as people just ponied up for their gas fix. This led to de facto rationing by the gas stations, which ran out of gas.
Now the same rule ( inelasticity ) is applying in the opposite direction. Demand has moderated, and the supply has outstripped consumption. But reduction in price has not increased consumption, since people aren’t going to fill up more often just because gas is cheap.
As far as I’m concerned, this is the whole story.
I have to imagine the fact that we have less people actually working now than 40 years ago would play a role in demand, affecting pricing. Less commuting/utilization of transportation for productivity purposes.
No one at all, not even Saudi Arabia. They spend far more to produce oil. A recent example:
They spent $17-billion (significant overruns from estimates) on the Manifa project for 900,000 barrels a day.
Offshore in shallow waters, they built 27 man-made drilling islands, 13 platforms, and 15 onshore drillsites. The project includes 41 km of causeways and 3 km of bridges designed to maintain natural water flow in Manifa Bay. They have worked for over half a century trying to figure out a way to economically produce this lower value, high sulfur heavy oil with high metal content.
For the curious, I included a bunch of links for info on this project.
https://www.saudiaramcoworld.com/issue/196006/manifa-oil.field.under.the.sea.htm
http://www.theoildrum.com/node/9056
http://www.oilandgasnewsonline.com/Article/33782/No_plans_to_raise_output_capacity
Actually, #1 is the Hydrogen revolution
The cars are rolling out in 2015.
...hydrogen-powered Hyundai Tucson Fuel Cell. Less than 10 minutes to fill, up to 300 mile range, zero emissions,..
The Arabs are desperate to kill this technology, and keep everyone on oil.
Where do you get Hydrogen? From Natural Gas and Coal.
Who has a pantload of Coal and Natural Gas from Shale> The USA!