Posted on 10/30/2014 4:47:37 AM PDT by thackney
Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected.
"India and China are slowing down,” said Charles K. Ebinger, director of the Energy Security Initiative at Brookings. "The IMF just downgraded Europe’s growth to less than 1 percent, and they're already quite energy efficient. Brazil’s a problem, too. All around the world there is no great growth story, and expectations are that things will stay that way or get worse."
There is also unanticipated supply. A few years ago, political turmoil was taking up to 2 million barrels a day off the market. Now production is roaring back in Libya, southern Sudan, Yemen, Nigeria, and even Iraq, and the global price of crude has fallen about 25 percent in the last five months. It's the same old story: low demand, high supply, etc.
Andrew John Hall, the alleged "God" of oil trading, is predicting $150 barrels within the next five years. But the deeper you dig, the more reasons you find to be down on the price of oil in the near future. "Japan’s announcement that they’re starting two reactors means that there will be less oil import for Japan,” Ebinger said. Second, there are industrial shifts that are reducing oil’s share in the energy market. For example, many U.S. companies are using natural gas rather than petroleum products to power their refineries. Third, hedge funds...
(Excerpt) Read more at theatlantic.com ...
I find it interesting that, out here in oil-country, the local gas-station has been stuck at $2.99/gallon for several weeks while the per-barrel price continues to fall.
out here in oil-country
What part of Texas?
A $.50 spread is robbery.
$2.49 in a couple of places in St Louis.
Supply and Demand
I have a relative who works for Chevron. They’re in full crisis mode.
I paid $2.94 for 93 octane the other day in O’Fallon. $.30 spread from regular.
I wouldn’t eat at McDonalds if it was free!!!
I’m all for gasoline prices going down, but will oil prices dropping down that low make it a problem for shale and fracking?
We're talking a drop in gas prices, not silicone prices.
Long or short on octane ?
Smaller operators with too much debt and in need of cash flow to make payments are going to be selling assets.
Majors will a longer-term view will buy in if they believe future oil prices will make it profitable in the long run.
The problem with tight formations like shale fields is the quick drop off in production really reduces the “long-run” payout.
I avoid trying to predict commodity prices like I avoid vacationing in Liberia.
Yep, Iran, Saudi and Russia raise and lower prices and production at his command.
Europe, India and China all raise and lower the economies and associated demand just at the thought of his wishes.
Yo, thackney!
Do you remember the 70’s when 10% ethanol was added to extend the national supplies? No mention of air pollution impact.
Now, the left acts like it was a pollution additive all the time (when, in fact, it ain’t).
Just reminiscing...
youtube.com/watch?v=iYgh_Irk46M
PB...Midland
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