Oil Politics

[Parliament 14,138]

Out of respect for the folks in the Oil Barron's thread, I'm starting this one.  And I'll go first:

If Saudi Arabia and Russia wann a crash oil prices and ruin their economies, we should let them.  It would harm the US economy for sure; especially Texas and North Dakota.  At risk of being callous, I say it's worth the trade.  A poorer Russia can't mess with is as much.  And a poor Saudia Arabia can't bomb Yemen as much.

Or am I wrong?

[TeddyBearStallion 73]

The sooner we end our dependence on fossil fuels, the better.   That's all I have to add.  

[tx 3 putt 76,400]

until demand bounces back, we are f'd

 

[Hefeweizen 5,307]

Short answer: doesn’t matter.  As stated above, with demand thus low output is going to have to keep being cut further and further.

 

Travel is not making a quick comeback either.

[Onboard 2.0 9,083]

18 minutes ago, Hefeweizen said:

Short answer: doesn’t matter.  As stated above, with demand thus low output is going to have to keep being cut further and further.

 

Travel is not making a quick comeback either.

If the travel industry puts deals out there, and fuel prices stay low airlines will do likewise. The carrot will be dangling out there.  The question is will there be people with money, jobs, and time. 

[JustBecause 112]

10 hours ago, TeddyBearStallion said:

The sooner we end our dependence on fossil fuels, the better.   That's all I have to add.  

That’ll happen about the same time as we harness fusion as an energy source. 

[Parliament 14,138]

8 hours ago, Dr. Beeper said:

Price war is noise. Output cut is a smokescreen. The issue is demand has been destroyed and I don’t believe it’ll come back to full strength for the better part of a year. All while we literally have 2-3 months to produce/store. The demand destruction from COVID is the only thing that matters. That must rebound. Until it does, oil price will remain low and I predict will get crushed later this month and in May.

Have we already passed peak oil demand?  Wind and solar are gaining momentum.  People were driving (a bit) less before Covid 19 hit.  When our economy comes back, oil demand will grow, but will it grow back to where it was?

[Llano Estacado 1,257]

Have we already passed peak oil demand?  Wind and solar are gaining momentum.  People were driving (a bit) less before Covid 19 hit.  When our economy comes back, oil demand will grow, but will it grow back to where it was?

Need to take into account that renewables for either power generation or transportation look a lot less attractive when NG, and transport fuels (gasoline, JetA, and diesel) prices are at 20 year lows.

[elfenix 34,171]

Simply not possible in today’s world. Write a letter to your great grandkids and maybe they’ll do something it. 

Well, not with that attitude it isn't

[Parliament 14,138]

2 hours ago, Dr. Beeper said:

I was thinking of wind and solar purely as a means for power generation and not transport, so as a substitute for NG and not oil. Wasn’t thinking about EVs. But yeah, these are getting more and more economical, but, gasoline is gonna be cheap for the foreseeable future. 

Our need for oil isn't gonna disappear entirely for a very long time.  But a permanent drop, and continuing drop in demand would change a lotta things.

[EuroHorn 3,204]

Power production only accounts for 1% of oil consumption in the usa 

[Neonmoon 38,127]

No ones knows what will happen in the future of energy including the people who are paid to know what happens in the future of energy. 

[TXSG8R 3,360]

Necrobump.  This question isn’t political, but I expect the answers to wind up going that route so I’ll ask here. Is there any explicit rules that ties the price of oil per barrel to the price of gas at the pump for US O&G companies?  In theory, the price of gas should be the cost of extraction, refining, transport, and taxes plus whatever margin the companies choose to add, right?  The reason I ask, is I’ve been to some countries in the ME that charge absurdly low prices per gallon ($.15/gallon), and I’m curious what prevents a similar big discount for local production from happening here.  I assume some of that is gov’t ownership of some or all of those same pieces of production, but they are also just as interested in profit since for many of those countries that is their primary export.  

[Blotto 23,434]

26 minutes ago, TXSG8R said:

Necrobump.  This question isn’t political, but I expect the answers to wind up going that route so I’ll ask here. Is there any explicit rules that ties the price of oil per barrel to the price of gas at the pump for US O&G companies?  In theory, the price of gas should be the cost of extraction, refining, transport, and taxes plus whatever margin the companies choose to add, right?  The reason I ask, is I’ve been to some countries in the ME that charge absurdly low prices per gallon ($.15/gallon), and I’m curious what prevents a similar big discount for local production from happening here.  I assume some of that is gov’t ownership of some or all of those same pieces of production, but they are also just as interested in profit since for many of those countries that is their primary export.  

I'm not sure you can use $.15/gallon for gasoline and the concept of "profit" in the same sentence. Governments can choose to subsidize what they want I guess. 

Edited to add this link from the state of CA, showing the various "buckets" comprise the cost of a gallon of gas in CA : https://www.energy.ca.gov/data-reports/energy-almanac/transportation-energy/estimated-gasoline-price-breakdown-and-margins

 

Edited October 13, 2022 by Blotto

[TwiceHorn 31,283]

For one thing, no state or federal taxes.

But, at those prices, it almost sound like they are selling at a loss to appease the people, who could and should protest that not enough is done for them with the oil wealth.

[Neonmoon 38,127]

1 hour ago, TwiceHorn said:

For one thing, no state or federal taxes.

But, at those prices, it almost sound like they are selling at a loss to appease the people, who could and should protest that not enough is done for them with the oil wealth.

Doing ding ding 

The cost of liter of gasoline in SA right now is 2.33 Saudi Riyal/Litre which amounts to 0.62 cents. SA enacted a pride cap on domestic gasoline prices to appease the people. 

https://www.argusmedia.com/en/news/2233166-saudi-caps-gasoline-prices-as-domestic-demand-struggles

 

[elfenix 34,171]

ME countries heavily subsidize fuel costs. That doesn't particularly affect the price they sell a barrel overseas. And since there's typically massive unrest when they ease the subsidy they're happy to forgo that relatively small loss of overall profit.

If refining is a bottleneck then the price at the pump can be disconnected from the price of a barrel.

[Incredulity 11,555]

1 hour ago, elfenix said:

If refining is a bottleneck then the price at the pump can be disconnected from the price of a barrel.

Just in LV Nevada.  Gallon was $5.6.  I was stunned.

the rhetoric is there are a couple WC refineries doing “maintenance”.

[MeerkatBong 115]

It's interesting to read the early threads during Covid of people saying travel won't come back, etc. 

[Biff Tannen 45,499]

20 minutes ago, MeerkatBong said:

It's interesting to read the early threads during Covid of people saying travel won't come back, etc. 

Travel co I work for had a record 2021

[TXSG8R 3,360]

Thanks for the replies. My experience over there is from close to 20 years ago so the $.15 is dated, but the concept still stands. Just curious why we can’t decouple gas prices from the price of oil for domestic producers the way other major oil producing countries do.