Gasoline Prices Have To Drop If Oil Prices Stay This Low

[Into the Night]

My comment was "steadily increasing."

Yes, it was. The funny thing about phrases like 'increasing' or 'staying the same' or 'going down'; the all refer to two points in time where a measurement was taken.

Depending on which points in time you choose, you can quite legitimately claim prices are increasing, decreasing, or just staying the same. Note that these points in time are rarely, if ever, mentioned. Note also that one must justify WHY these two points in time are significant, and any others are NOT significant.

IF you use prices from, say, Apr 2020 and today, then you are correct. Oil prices have radically increased, both futures and spot prices.
IF you use prices from, say, May 1980 and today, then you are incorrect. Oil prices today are less than $141/barrel.
IF you use prices from, say, May 1980 and June 2008, then you are correct. Oil prices have radically increased.

Walt is wrong, as usual. And on several points:

* Peak oil prices are NOT $141/barrel (May 1980 price), but $164.90, which appeared in Jul 2008 (after Democrats passed laws to reduce oil production in the U.S.).
* Walt carefully cherry picks points in time favorable to his argument, and without justifying those two points in time or even mentioning them. It's like saying temperatures are dropping and we are headed to a future of freezing temperatures simply because night time temperatures are lower than the day time temperatures.

EVERYONE is making guesses (speculating) about future oil prices. This is guessing. It is nothing more.
I can, however, be somewhat 'educated' guessing. Several factors can be considered here:

* the government's ongoing drive to force people into 'green energy' (which is to say solar and wind, the most expensive methods of generating electricity by far).
* the government's ongoing drive to force people into electric vehicles (which is to say expensive vehicles, with limited range, limited payload, and long charging times).
* Biden draining strategic oil reserves (which can only go on for so long).
* the continued effects of the economic depression.
* the Fed inflating dollars as fast as it can, which it is still doing.
* the Fed increasing interest rates, slowing the economy even further.
* the costs of shipping product overseas, such as importing oil to the United States.
* political environment, such as retaliations for acts by Russia, China, Europe, and the United States (which may involve wars, internal strife, civil wars, etc).
* political interference, such as taxes, restrictions, and market manipulation (fascism).

I've noticed that these factors get mentioned, but they are only factors as everyone here is speculating on future prices of oil or gasoline.

Did Biden have an effect? Yes. His restrictions reduced domestic oil production. His dumping strategic oil reserves is attempting to directly manipulate prices. BOTH acts are acts of fascism, which is government manipulation of markets.

Is Biden the only factor? No. Not by a long shot. The world is much bigger than this twit.

 

[Into the Night]

Some Democrats are blaming large oil companies for raking in huge profits at the expense of Americans who are getting squeezed at the gas pump. Wyden is set to unveil a plan that would slap oil companies with a 21% surtax on profits deemed excessive, along with taxing firms buying back their shares.

"You have Big Oil doing so immensely well under the federal tax code at the expense of the consumer," Wyden told Insider, adding he believes his measure will "connect" with people. Separate polls from the left-leaning Groundwork Collaborative and The Washington Post show a majority of voters pin the blame on oil companies trying to profit off the surge in gas prices.

Sens. Bernie Sanders of Vermont and Sheldon Whitehouse of Rhode Island also released their own windfall tax proposals. Those are modeled after programs recently established in Italy and the United Kingdom providing checks to the poorest families.

The Biden administration has kept the door open to a windfall profits tax as well. But some liberal and conservative economists are criticizing windfall taxes as potentially inflationary and damaging to efforts at increasing crude production.


"I think the fact that the Biden administration is floating a windfall profits tax or saying they're gonna consider it shows that they're in blame-shifting mode, not really constructive mode," Donald Schneider, deputy head of US Policy at Piper Sandler and a former House Republican aide, told Insider.
https://www.businessinsider.com/bid...ion-exxon-big-oil-profits-saudi-arabia-2022-6

This is price controls. It is the only thing you can call it. Price controls always have the same effect: shortages. No one wants to sell product for less than it cost to obtain it. The product simply becomes unavailable.

 

[Into the Night]

yes.

artificially juicing the economy with ten years of needless QE left a huge bar tab that had to be paid eventually.
welcome to eventually boys and girls...

Quantitative easing is not debt, but it is theft of wealth. It is inflation.

It is used to pay off debt with funny money, also theft of wealth.

If the government reduces the money they print, the result is deflation; ruinous for government, since the debt is now much harder to pay off.

The government is broke. Only evil choices lay ahead. Stop printing money and cause a debt crash (bankruptcy), or print money and cause a cash crash (loss of faith in the dollar).

 

[Into the Night]

Walter likes to tiptoe around the elephant in the room.

Biden said that he would destroy the carbon based energy sector and he is succeeding.

Americans are suffering with out of control gas prices and groceries.

Walter’s theories don’t put food on the table.

Yes. This is absolutely accurate. It is one of the factors that can be discussed when speculating future oil prices that I mentioned in my earlier post.

 

[Into the Night]

$64 dollars per barrel , before the Demthug shutdowns, idiot.

Anything over $100 is HIGH...VERY HIGH.

Generous. I set my bar at $60. Remember that Democrats have been attempting to force people into electric cars and into 'green energy' for some time even before Democrats shut down the economy using Covid fear mongering.

 

[Celticguy]

Uh....no.

China is locking up it's citizens by welding their doors shut, due to Covid lockdowns.
The Chinese government is creating an army. An army of people rebellious to the government. Revolution is sure to follow. The peaceful days of China are done.

its hard to keep up with them with the CCP lying constantly..they report progress in one region then weld doors shut next door.

 

[Celticguy]

We are already in an economic depression. We have been since Democrats shut down the economy due to fear mongering over Covid.
The depression continues with shortages, high inflation, and Democrats trying to manipulate markets (fascism).

it does help to see this whole period as being connected. the china cootie shutdown had the same effect as a recession if technically different. Until we recover you can consider this all one event.

 

[Celticguy]

In most places, this is true. In some places, such as in the SDTC and in many places in Europe, increased taxes have caused further increases.

gas is certainly far more volatile.
I was referring to oil which is one market I check in on daily.

 

[Geeko Sportivo]

I just paid $4.00 a gallon- a mile from my house here in Mesquite, TX.

https://www.gasbuddy.com/gasprices/texas/dallas

 

[Hawkeye10]

its hard to keep up with them with the CCP lying constantly..they report progress in one region then weld doors shut next door.

I was reading the other day that Xi might even be deposed over Zero COVID....now I tend to doubt it but it is something to pay attention to.

 

[ExpressLane]

You would think that oil prices were at record highs, but they are not. Oil prices were at $120, not even close to the record of $147.02 that Bush took us to. Now oil prices have dropped to below $110. The reality is these are not oil prices high enough to sustain these gasoline prices. We can expect gasoline prices to drop by a dollar or so.

I could be wrong, and if you are sure I am wrong, heavily invest in gasoline futures. It seems to be common alt right "wisdom" that gasoline prices will only go up, which could make lucky investors a lot of money if it does go up.

When rig counts are down oil production falls. Whe oil production fall oil prices eventually go up. Rig counts are down. At current oil price gas should be about 4.75 a gallon.

 

[Hawkeye10]

I just paid $4.00 a gallon- a mile from my house here in Mesquite, TX.

https://www.gasbuddy.com/gasprices/texas/dallas

Thats very interesting in light of the fact that AAA says that the lowest average price by county in TX is $4.31.

 

[Celticguy]

Quantitative easing is not debt, but it is theft of wealth. It is inflation.

It is used to pay off debt with funny money, also theft of wealth.

If the government reduces the money they print, the result is deflation; ruinous for government, since the debt is now much harder to pay off.

The government is broke. Only evil choices lay ahead. Stop printing money and cause a debt crash (bankruptcy), or print money and cause a cash crash (loss of faith in the dollar).

I might suggest "spend less" as a means of taking the need to decide between debt and inflation away to whatever degree you can manage.

America has a spending problem, has for a great while.

Does it have the courage to tell Wall Street its just going to have to make money the old fashioned way while we trey and fill this hole we've been digging back up with dirt.

yeah, I know, silly but a boy can dream, right ?

 

[evince]

You would think that oil prices were at record highs, but they are not. Oil prices were at $120, not even close to the record of $147.02 that Bush took us to. Now oil prices have dropped to below $110. The reality is these are not oil prices high enough to sustain these gasoline prices. We can expect gasoline prices to drop by a dollar or so.

I could be wrong, and if you are sure I am wrong, heavily invest in gasoline futures. It seems to be common alt right "wisdom" that gasoline prices will only go up, which could make lucky investors a lot of money if it does go up.

Yeap



The oil guys got caught having meet up where they were bragging about them gouging

 

[Celticguy]

I was reading the other day that Xi might even be deposed over Zero COVID....now I tend to doubt it but it is something to pay attention to.

I think there is something to be said for this and one reason for the 180 degree shifts they do so often.

 

[Hawkeye10]

I think there is something to be said for this and one reason for the 180 degree shifts they do so often.

I have said here before that Zero COVID is almost certainly a mistake. China has recently doubled down, and the Party is handing out lots of money to places that do get locked down claiming that it is stimulus but it is really a political pay-off, and attempt to keep the citizens onboard zero COVID....but I am pretty sure that the policy will need to go away soon. I was just listening to an expert say that what CHINA will do is officially keep the policy but that they will stop acting according to it, they will pretend that they dont have a COVID problem as stop lockdowns, they will stop mass testing.

 

[Celticguy]

I have said here before that Zero COVID is almost certainly a mistake. China has recently doubled down, and the Party is handing out lots of money to places that do get locked down claiming that it is stimulus but it is really a political pay-off, and attempt to keep the citizens onboard zero COVID....but I am pretty sure that the policy will need to go away soon. I was just listening to an expert say that what CHINA will do is officially keep the policy but that they will stop acting according to it, they will pretend that they dont have a COVID problem as stop lockdowns, they will stop mass testing.

just like Pedo Joe ! imagine that !

 

[Sawyerloggingon]

Extraction costs are the cost of extracting oil. If it is above the market cost of oil, then producers will stop producing, or at least try to stop producing. Over time, it will drive producers out of business.



Extraction costs play a part in oil costs, which in turn play a part in gasoline costs, but it does not do anything like what you claim. If a refinery buys oil at $100 a barrel, the oil producers cannot come back at them saying extraction costs were higher, or lower. The price of the oil was $100, and extraction costs do not matter.

Best guess, the highest extraction costs are about $50, and the lowest are about $5, so they are making a lot of money off $110 oil.

During the pandemic exactly that occurred. Extraction cost were higher than what oil sold for and oil companies lost money.

 

[Into the Night]

its hard to keep up with them with the CCP lying constantly..they report progress in one region then weld doors shut next door.

They report progress in the regions they are welding the doors shut too.

 

[Into the Night]

it does help to see this whole period as being connected. the china cootie shutdown had the same effect as a recession if technically different. Until we recover you can consider this all one event.

It is all one event. An economic depression is reduced economic activity (below normal economic activity) for an extended (typically over a year is used) time.
It all comes from the same source: interference by Democrats.