Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote:If Russia tomorrow morning declared they would sell the same number of barrels of oil as they are selling today, but they require $40/bbl for every one of those barrels what would happen?
Tanada wrote:World oil demand has continued to grow every year.
1Q 2013 90.74 MM/bbl/d
1Q 2014 91.89 MM/bbl/d
1Q 2015 93.50 MM/bbl/d
1Q 2016 94.50 MM/bbl/d
IOW the world has consumed more oil every year for the last four year despite prices in 1Q 2013 and 1Q 2014 being in the $75/bbl-$90/bbl range.
There Is No Demand Destruction!
Also keep in mind De Beers Corporation keeps the price of Diamonds right where they want it by refusing to sell them for less, and they go out of their way to buy up every diamond that hits the market at a lower price to prevent themselves from being undercut.
So the purpose of this poll is to determine the economic mindset of the forum membership. Please answer honestly and if you really believe you are correct you can post your justifications in thread to back up your selection.
pstarr wrote:I chose "Saudi Arabia and/or OPEC would set their price at the same as Russia."
Seeing as Russia has a ready market among relatively wealthy Western Europe and Asian markets, it will not lose much or any sales. Likewise Saudi Arabia and other ME producers who sell to many of the same customers also have lots of wiggle room to raise prices.
pstarr wrote:Plantagenet wrote:Tanada wrote:If Russia tomorrow morning declared they would sell the same number of barrels of oil as they are selling today, but they require $40/bbl for every one of those barrels what would happen?
Now that the US oil export ban is repealed US oil producers would go to Russia's customers and offer to sell their oil ...
Cheers!
Except the United States has no $30.00 bbl oil.
Plantagenet wrote:pstarr wrote:Plantagenet wrote:Except the United States has no $30.00 bbl oil.
????
Au Contraire…..there are over 60 MILLION BARRELS OF OIL stored at Cushing Oklahoma right now, and more being added every day. There isn't room for much more. When Cushing fills up they are going to have to start selling that oil somewhere.
cushing-crude-oil-storage-at-all-time-high
Why not export it, since the O administration has now repealed the oil export ban? Russia won't have much luck trying to jack up the oil price as long as the US, UAE, Iran, etc. are desperate to sell their oil.
Cheers!
[/quote]The WTI price was $50.88 per barrel on July 17, 2015, $1.86 below last
week’s price and $52.95 under a year ago. The spot price for conventional
gasoline in the New York Harbor was $1.876 per gallon, $0.118 lower
than last week’s price and $0.901 less than a year ago. The spot price
for ultra-low sulfur diesel fuel in the New York Harbor was $1.654 per
gallon, $0.071 below last week’s price and $1.193 under a year ago.
The national average retail regular gasoline price increased to $2.802
per gallon on July 20, 2015, $0.032 under last week’s price and $0.791
below a year ago. The national average retail diesel fuel price decreased
for the eighth week in a row to $2.782 per gallon, $0.032 per gallon less
than last week and $1.087 under a year ago.
Crude Oil (Excluding SPR) +2.5 to 463.9
Total Motor Gasoline -1.7 to 216.3
Distillate Fuel Oil +0.2 to 141.5
Other Oils +1.9 to 452.3
Crude Oil in SPR +0.5 to 695.1
Total US Petroleum Inventory +3.4 to 1,969.1
[/quote]Rabbit wrote:Data for week ending Feb 12 | Release Date Feb 18 | Next Release Date Feb. 24, 2016
The WTI price was $29.32 per barrel on February 12, 2016, $1.54
under last week’s price and $23.34 below a year ago. The spot price for
conventional gasoline in the New York Harbor was $1.066 per gallon,
$0.041 higher than last week’s price but $0.551 less than a year ago. The
spot price for No. 2 heating oil in the New York Harbor was $0.967 per
gallon, $0.007 under last week’s price and $0.943 below a year ago.
The national average retail regular gasoline price decreased for the
seventh week in a row to $1.724 per gallon on February 15, 2016, $0.035
below last week’s price and $0.550 under a year ago. The national
average retail diesel fuel price decreased for the fourteenth week in
a row to $1.980 per gallon, $0.028 per gallon less than last week and
$0.885 lower than a year ago.
Crude Oil (Excluding SPR) +2.1 to 504.1
Total Motor Gasoline +3.0 to 258.7
Distillate Fuel Oil +1.4 to 162.4
Other Oils -3.1 to 416.2
Crude Oil in SPR No Change at 695.1
Total US Petroleum Inventory +3.4 to 2,036.5
pstarr wrote:Outcast_Searcher wrote:pstarr wrote:I chose "Saudi Arabia and/or OPEC would set their price at the same as Russia."
Seeing as Russia has a ready market among relatively wealthy Western Europe and Asian markets, it will not lose much or any sales. Likewise Saudi Arabia and other ME producers who sell to many of the same customers also have lots of wiggle room to raise prices.
Seriously, if this strategy would work -- if just naming whatever price some major producing country wanted could magically transform the global price to that price, why stop at $40? Why not $50? Or $100 for a return to the heady days of 2010-2014?
Why stop at $40? Because that is the condition of the questionnaire.
Subjectivist wrote:
A lot of that stored oil was bought for more than $50/bbl, not under $30/bbl. think for a minute, the price didn't break below $50 until late last year.
Plantagenet wrote:Subjectivist wrote:
A lot of that stored oil was bought for more than $50/bbl, not under $30/bbl. think for a minute, the price didn't break below $50 until late last year.
So what?
No matter what the original price of the oil, it is now worth the current market price of oil. It doesn't magically retain its original value.
If the owners of that oil want to stop paying storage fees and sell the oil, they will have to sell at the current market price.
Cheers!
ROCKMAN wrote:I'm sure there were some good comments but just didn't ha e ethe energy tonight to go thru them all.
But my story doesn't change: no refiner is going to pay $40/bbl if they can't forecast selling their products at an acceptable profit margin. And the same is just as true for $20/bbl as it is for $100/bbl. The infl. adj. price of oil in the late 90's was $17/bbl and not $18/bbl because that's what the refiners needed to pay in order to make an acceptable profit. Same reason they paid $100/bbl a while back.
Not let's jump into another universe: all oil sellers agree: every bbl sells for $40/bbl or they don't sell. Now it gets rather theoretical...to a degree: some consumers can still buy refinery products that are priced to allow those refineries to make a profit. Obviously no refinery is going to intentionally lose money. But the consumers that couldn't afford those product prices still can't. After all has anyone here ever negotiated what they paid for gasoline? No: you paid the posted price but only for what you had to buy. And even then there are folks who can't even do that.
So to some degree in this mandatory $40/bbl universe less refinery products are sold. Which means less oil is purchased. But how much less? Who knows: it's a fictional construct. So one scenario:the producers are selling less oil but getting a higher price per bbl. But what of the total income: is it greater then the $30/bbl days or greater in the new mandatory $40/bbl days? Who knows? But there are just two possible answers: yes or no.
So let's look at YES: higher total income income at $40/bbl. Great for the producers and oil consumers. But what of the consumers no longer consuming as much? How does that affect the economy. Thank goodness we have ECONOMISTS to answer that question. Unfortunately half say no problem for the economies and the other half say big problems. And now we're back to the big debate over the relationship (or lack thereof) between energy consumption and economic vitality.
Well I think I've set the stage so take over. LOL.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote:No doubt some marginal use would poof away again at $2.00/gallon in Ohio, but prices have been floating as low as $1.48 and as high as $1.98 here for the last two months without many people paying much attention. People buy what they need mostly pay at the pump on a credit card and often don't shop around for the best price just go to the same routine station week after week.
Outcast_Searcher wrote:Well, where I live, a small city in the midwest, the pricing seems efficient enough in the VAST majority of the local stations, that I'm not convinced it pays to shop around. Driving takes gas. The internet has been pretty random on being current enough on local pricing.
I pay attention (out of curiosity) and on any given day, the major competitors like Shell and Speedway will have virtually identical prices all over town. And when the prices change, they often change by as much as 30 cents a day, but they all seem to change nearly simultaneously. Once in a while I'll get lucky and catch a break when prices change if I need gas, but not often.
And it would be sheer MADNESS to drive 20 minutes / a gallon round trip across town to save perhaps a nickel on an independent station who tends to have lower prices. Oh, and stand in line and unless one drives a hybrid, burn more gas while you wait. Not only for my wallet, but for the planet.
Clearly many stations are using some kind of reference price -- not sure if most (franchises?) are being directed what to charge from the "mother ship".
Realistically, though, if they don't conform they are either giving away money or angering customers (when they find out they paid too much) -- so conforming seems to be in their best interest.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
tita wrote:When we say every barrel of oil get a buyer, that doesn't mean it instantly goes in the tank of a car. First you have to wait for it to physically appear (it's a future market), then the buyer (refineries) usually put it in storage before using it. So, what happens if a producer suddenly wants higher price than the market offer? He probably won't sell it and will have to store it somewhere, and pay a fee, and don't get any money. And if he really needs the money, he will probably sell it at the market price.
The consumers don't store gas when it's cheap and sell it when it's expensive. Producers don't do it with oil either. They are 'links' between them who have this job. And as there is actually more oil produced than gasoline consumed, these 'links' have no other choice than to put more oil in storage and set the price at a value that will eventually balance both ends.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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