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So what is your prediction for crude oil prices this summer per barrel? I think we are at $104/barrel right now, I am predicting $140-$150 per barrel, which would equate to about $5.00-$5.25 per gallon in California. Plus tach on another $1/gallon at the Marina.
$5 x 40-45 gallons = $200-$225 per fill up!
$6 x 40-45 gallons = $240-$270 per fill up!
On a more positive note, spring is getting close and all the lakes in Nor-cal are looking great! Should be an awesome season!
It's gonna be bad. I figure about $4.50 - $5.00/gal. My figuring is about $200/day to ride behind the Saltare. Won't stop me from getting out and it'll hurt every time, but hopefully it'll keep some of the riff-raff off the water.
good year to pick up used boats. And tow rigs. two years ago gas went to $1.20 per liter in canada all the big blocks value dropped to half!
As much as it pains to say, I don't think there's any way it'll stay below $140.
It will most definitely be a tough summer with gas prices, but I'm going to do my best to avoid reflecting on it. Just fill the boat up, thinking of all the great family memories to be had on the water, and go on our way for some good riding. I, too, am hopeful high gas prices will keep some of the crazies off the lake, but I doubt it, especially since they don't get hit as hard as us since we all weight the boats down so much. (although, I guess a couple hundred lb's of liquor counts) :)
I'm thinking about converting my boat to CNG and having the governent give me a Tax break on it while I'm paying $1.49 a galllon all day..
I agree Scott, as costly as it will be, still worth the expense. Maybe expect the worse and hope for the best. It already costs $125 to take my family out to the movies (w/tickets, and food), whats another $150 on top of it for a full day on the water!Quote:
Originally Posted by ScottnAz
Yeah, I'd say we're probably going to see $150 a barrel. It's really sad because it doesn't NEED to be this way. If we would just drill and explore more in our own country, we could have a big impact on the whole issue. Granted, we aren't going to extract the oil and just keep it here, it would go into the world
DON'T GET ME STARTED!! Im with you matt, except I will convert all of my vehicles and leave the boat alone. CNG doesnt weigh very much. lol
A friend of mine is in the oil business, they are predicting $5.50/gallon for unleaded this summer and $6.50/gallon for diesel. Wow, that is quite a hit for everyone just filling up your vehicles! Maybe the future traders who are "predicting" we are going to be short on oil will give us a break! What a complete SCAM! still cant figure out why they continue to let this happen, its going to cripple the global economy...again...this is what started the mess back in 2007.
Boy the oil companys just love it. They don't want the cost per barrel to go down. Oil is traded on the world market not the US market. Even if we drilled more wells, this does not constitute lower fuel or lower oil price. The only way the cost would go down is if a supplier would flood the market with excess amount of oil. Now why would an oil supplier do this, when the price of crude oil is high, the oil company makes more per gallon or barrel. You know we only buy 2% of our oil from Lybia and the Saudi's easily can supply this. We buy most of our oil from Canada and Mexico, third is US supply and the rest comes from OPEC, Saudi's. The Wall Street speculators are making a killing on this, they are the reason oil is so high, not supply and demand. Fear mongoring. If oil does not go down soon, our economy will topple again and the Wall Street will be asking for another bail out. Al
True, but if we were pursuing domestic supply and flooded the market, we could drive the price back down. You have to want the market price to drop, though, and like you said there are plenty of people that are loving this price hike.
You nailed it Al, they were waiting for a recovery sign in the economy and a third world country that exports oil to do something stupid (ie: Libya) to create a scare of oil shortage. Hmmmm... funny, unemployment numbers were also going down, I hope oil crashes to $20 a barrell after they stick us with $150/barrel crude!Quote:
Originally Posted by beast 496
They better be careful, they are playing with fire, the economy is not even close to stabilizing, and as you said it, they could create another recession causing the stock market to crumble. Firefighters and police offers are still being layed off in California, which is a sign things are not even close to being corrected. The DOW is already falling daily, and will continue to do so until oil gets back to a reasonable price ($90 barrel range).
I always wanted to know how much the government benefits from this, because Obama does not seem to be concerned about people getting screwed at the pumps.
Oil, is a commodity, similar to grain. It is traded as "futures". THe speculators are betting on the price today, of what it will be in June and July. This needs to stop. FDR stopped the "futures" in trading but past presidents have extended the time of "futures" trading. Like I said it just needs to stop. Al
I'll be on the record as a pseudo energy expert...
$150 a barrel won't happen this summer unless:
1) the panic spreads to a major oil producer
2) we bomb someone like Iran
3) some other unforseen natural disaster
Unlike 2008, this oil spike has much less to do with actual current supply/demand (below ground issues) issues and more to do with fear with what might happen to the current producers with regime change (above ground issues). Big big difference. We actually do have some excess capacity in the market to make up for some temporary loss of production in small OPEC producers. We didnt have this in 2008. We were completely tapped out. You might doubt OPEC's ability to pump more, but I have years and years of evidence to support they can pump what they say they can. People that say they can't have supposition.
I suspect oil could go as high as $120 under current conditions. I think it has a floor around $82-$85. Very possible to see sub $90 a barrel in the next 2 months if we dont get any more major news out of the gulf. As to the price at the pumps, gas prices could wildly vary to region, especially since much of the east gets Brent Crude, which has been trading at a premium. I suspect actual pump prices could rise another 50-75 cents a gallon. I suspect gas will settle, unless the above events happen, around $2.75-$2.90 a gallon.
History has shown that regime changes dont affect production. New regimes want it pumping hard and fast to bring in money. My guess is that new regimes will be less likely to honor supply restrictions (OPEC members) and pump more.
I am not a true peak oiler, but do believe we are coming to another crunch where $150/B is possible, but I do not think this is one of those moments.
In any event, my theory (which has been posted online before 2008, and was proved true) is that when oil gets to $150 due to supply constraints, there will be demand erosion enough to bring significant excess capacity to the markets, which will bring prices back down. This will negatively affect global growth, but I expect oil will reach successively higher peaks, followed by higher valleys (a roller coaster effect with each successive peak higher than the previous). It will not be sky high oil prices continuously, as the true peakers theorize. With each cycle, the industrialized countries will wean themselves further and further from oil (the U.S. is already doing this, and there are a lot of western countries that peaked years ago with oil consumption).
I have no specific knowledge or proof to backup any of my claims posted below......
Now that I got that out of the way, here is my opinion.
Oil is a commodity. We are led to believe that its cost is supply and demand driven. The part I have issue with is the notion that the oil producers are pumping at or even close to capacity. They run it like the stock market. If they know they can sell a barrel for $150, they will pump as many as they can to get that price. When the value drops to $90 per barrel they cut production. In this manor the guys who are selling the barrels are able to dictate what they will sell for.
They are also opportunists. They have the luxury of seeing all the up upheaval in the east. They capitalize on that by raising prices in anticipation of shortages. As long as the public is willing to accept that excuse I believe they will run with it as long and far as they can.
The exception to this rule is when they notice demand drop off sharply. They are pushing thier luck with these prices. a small increase may be what we need to stimulate growth in the markets. People base the success of the economy on things such as the cost of milk and gas. If the price of gas goes up, then the cost of milk and other supplies will also go up. This should result in a correction in the market and mean more money going around the system.
The problem is that this is a fine fine line. If they go too high, people will park their cars, lose their jobs, and start speaking doom and gloom. At that point the gov steps in and starts trying to control the price fluctuations. if that includes talking to OPEC then so be it. How exactly that part happens I dont know.
What I do know is if I was selling oil, I would rather sell it for more if at all possible. That is what is happening now.
In Alberta a LOT of the oil companies have renegotiated their contracts. They are getting labor for dirt cheap. So profit is up. if the price of oil soars, they get even more money in the bank.
I am lucky to be in an industry that no longer runs off the oil, market directly. Unfortunately my industry IS affected by the alternate fuels (corn). So as the price of oil goes up, the demand for alternate solutions also goes up. We have been told to expect the cost of our corn to almost triple this year. How that relates to the price of oil I am not sure. But at this point I will be watching things closer for sure.
I dont know where you live, but gas is already at $4/gallon in Northern California, and $5/gallon in Southern California. I hope your theory is right, but I doubt Nor-Cal will see anything less than $3.50 a gallon this summer, this would be the best case scenario.Quote:
Originally Posted by CarZin
$2.75-$2.90/gallon will probably never happen again in California.
I wouldn't say never. When our current money market collapses you will see that value drop considerably. It wont matter much at that point, we will all be trading gold nuggets and silver dollars again.Quote:
Originally Posted by Fman
I am referring to prices in north Carolina. I should have referenced contract prices. Right now, unleaded gas is around $3 a gallon in the futures. That just shows you what all those California taxes and regulations get you.
Some have speculated $2.00 a litre here in the north..... Right now $1.20 a litre and no end in sight. The economy can't take another hit in oil prices, forgive me if I am wrong but the last time the oil spiked in price it was the beginning of the recession.
Ain't that the truth. Don't forget that CA has a "special blend" for better air quality thanks to the enviros. Every time I talk to my Dad (who still lives in SoCal) about gas prices, he is at least $.50 a gallon higher than we are here in OK. The main difference is taxes and a small amount is the blend. So, since the taxes on gas are higher in CA, they have much better roads, right? Wrong! At least, not when I was still there or have visited.Quote:
Originally Posted by CarZin
You're not. Oil pricing spiking was the catalyst of the recession.Quote:
forgive me if I am wrong but the last time the oil spiked in price it was the beginning of the recession.
I take a very practical position on our oil consumption: The government must do its best to incentivize the diversification of our fuel sources for transportation, because we cannot survive another 50 years when we burn oil for 99% of our transportation needs. Its going to have to be a mix of electric cars, plug in hybrids (like the Volt), and LNG. The U.S. is too vulnerable to swings in oil prices. There needs to be options, and unfortunately we have seen that the market won't protect the consumer in this regard. There will not be a gradual upward adjustment in prices. it can be violent, quick, and cause massive economic damage. As much as I hate government hand-outs, this is one area where we need to step it up. Its critical to our national security.
Veering a little off the subject of prices, I had to call this one out. I'm not trying to make this a personal attack, but since you brought up the above, here is my response...Quote:
Originally Posted by CarZin
What is the above based on? Why wouldn't we be able to survive another 50 years using oil? Why does it HAVE to be some alternative source like electric, hybrid, or LNG?
I agree, its amazing to me we actually keep supplying the world with enough oil considering how many millions of barrells they export daily. Its not an infinite resource and someday we will run out. And if this happens when we have no other energy alternatives in place it will be catastrophic and cause massive problems throughout the world.Quote:
Originally Posted by CarZin
We need water, the sun and oil to survive. Remove one of these and it everything would come to an end.
Lots and lots of hard data from many many sources. You can take your pick between the IEA or EIA or nongovermental agencies. Conventional crude (the stuff easy to get) peaked a few years ago. Crude is getting harder to find, and its costing a lot more to extract. If you believe the EIA, we have a few decades to prepare for an undulating plateau, where crude production will peak, and production willnot be able to increase. Other govermental agencies are forecasting a plateau sooner than later (a decade or so off). If you believe the peak oilers (I think they have been severely discredited over the past couple of years), then we have already reached peak production, and production of non conventional crude will not be able to keep up from the decline in production in the giant oil fields.Quote:
What is the above based on?
So, sooner than later, everyone agrees that production of oil will peak. The big questions are 1) When 2) How quickly will the decline be and 3) How will the world respond.
We experienced a little snippet of this in 2008. The only reason we were saved from even higher prices is that the world wide recession significantly reduced the demand for oil. It basically gave us some breathing room. In points of 2008, the world was consuming more oil than it could produce. It doesnt take a rocket scientist to figure out what happens to prices when a relatively inelastic good becomes more scarse. Part of my theory would basically be a continual cycle of world recessions that start and end with oil production/demand being unbalanced.
What other choices are there? Electric cars will use fuel from power plants that we source most of the fuels locally. Plug-in Hybrids would allow people to mostly avoid gas by giving them electric range, then extended gas range when they need it. LNG is already proven to work really in vehicles, and the U.S. is sitting on vast reserves.Quote:
Why does it HAVE to be some alternative source like electric, hybrid, or LNG?
Put it another way... The U.S. produces about 5.2 Million Barrels a day of oil,and consumes about 19 Million. We rely on Canada (mostly) to make up the difference. We are not going to drill our way out of independence. I ABSOLUTELY think we should drill all over the U.S., but this will only help to prolong ultimate fate.
We need to go ahead and diverify before it is too late.
You can also find all kinds of data from sources saying there is more oil than we know what to do with and/ or sources that hold potential for huge supplies that haven't been tapped and/ or explored. There are just as many saying that as there are saying we're in danger of running out, from what I've seen and read.
I can see the argument for LNG. Electrics and plug in hybrids, or standard hybrids don't seem practical.
Similarly, shifting to energy supplies for the home, solar, wind and in many cases water don't prove to be very practical either.
Ultimately, punishing fossil fuel usage doesn't seem to hold water from what I've seen. The reasons behind trying to shift off them seem to be based on false premise. Whether it be the climate change argument or the limited resource argument, there still appears to be disagreement and the same amount of "experts" arguing both sides.
Unfortunately most of the sources that state there is enough oil to meet growing energy needs at the same cost level aren't very credible. I fear politicians know far less than they should, and this issue is far too politicized. My concerns are strictly economical. Has nothing to do with the environment. I think it is foolish we shun the use of coal.
But you miss my point. I actually do not want to see oil users being punished. What I want is for the government to subsidize alternatives, by which they essentially progress alternatives past the early adopter period (the expensive period) so there are viable alternatives for the masses. I made no reference to solar or wind. I'm not as concerned about base power production. We are sufficiently diversified. Our domestic power generation issues are political.
What people don't understand is that there is HUGE risk at hoping future production quotas can be met.
Electric hybrids are very practical. Pure electric cars currently are not. The cost of electric hybrids will come down quickly in the next 5 years to make them available to people who can afford a prius.
Yeah, I'm not a big fan of subsidizing. Let technology stand on its own. If a technology has the potential to be a real solution, it will be invested in by the private sector and it will grow. Government subsidizing doesn't usually result well and costs us all money we never get back.
If you think that isn't true, explain to me how well ethanol is working for us.
It's interesting to me that the sources stating oil isn't as limited as some think don't seem credible to you. Do you know what the sources are?
"If you think that isn't true, explain to me how well ethanol is working for us."
Pointing out one failed subsidy doesnt make an argument that all subsidies are bad. Ethanol was a stupid idea that was pushed on the political weight of congressmen that wanted to fatten the pockets of their farmers. You didnt see many true energy people thinking this was a good idea. The $7500 government credit for electric cars is going to have the same effect that the government credit for Hybrids had for cars like the Prius. It is mainly because of that credit that allowed the hybrid technology to grow and get established. Yes, Diesel can get as good of mileage as a lot of hybrids, but since diesel is a byproduct of gas production, there wont be enough diesel to go around to provide everyone with a TDI. Again, diverisification is the key.
I want to see a mix of gas/hybrid, plug in hybrid, LNG, and pure electric on the road.
"If a technology has the potential to be a real solution, it will be invested in by the private sector and it will grow. "
Well, the problem is that there is tremendous risk for anyone to go against oil. It isnt a typical market. In fact, you are betting on a market that is manipulated by foreign powers for political and monetary means. It is not a free market. Car companies dont want to risk developing a new technology if they arent positive there will be buyers. That means tha we dont get new technology until there is a crisis. In other words, it will be too late.
"It's interesting to me that the sources stating oil isn't as limited as some think don't seem credible to you. Do you know what the sources are? "
Please show me your sources. If you want, I'll be happy to give links to our own Department of Energy's oil forecast, and a few others.
Most of the push for us to get off oil and go to alternatives is being pushed by congressmen that want to fatten the pockets of their lobbyists, as well. One failure doesn't mean all ideas are failures, I agree. But, when it is politicians pushing the idea, it becomes very questionable based on the track record.Quote:
Originally Posted by CarZin
Risk is part of any business and any investment. Which do you prefer...Quote:
Originally Posted by CarZin
The government decides to take the risk and gamble with tax money (your money) and fails. We all pay and get nothing in return..."oh well" says the politician that voted to take the risk.
or...
A private investor decides to take the risk and gambles their money, then fails. They are the only one that pays and they realize that investing in more likely successful options would be the better way to go for the future.
Look into what various energy companies are saying. They are the sources that are contradicting the "we're running out" crowd from what I've read.Quote:
Originally Posted by CarZin
"But, when it is politicians pushing the idea, it becomes very questionable based on the track record."
Trust me. Most politicians havent even woken up to the problem. As much as I want us to drill more, this doesnt solve the problem. It just puts it off. And that is the solution the majority speak of. I think that the energy subsidy for electric cars was luck... the politicians wanted to prop the car companies and jobs, and it just so happened to progress the goal of diversification. I dont think it was done intelligently. It it, however, rare when the real needs coincide with political needs.
"The government decides to take the risk and gamble with tax money (your money) and fails. We all pay and get nothing in return..."oh well" says the politician that voted to take the risk."
I dont think you are looking at this from the right way. If there is an energy crisis, and there will be, the only losers will be us. You should consider diversification a HEDGE against the possibility of a crisis. It is our insurance policy. Most people on here wont drive a boat or have a house or car without an insurance policy. Right now, the U.S. has no insurance policy against an oil crisis.
I am not stating we wont be able to meet demands for the next 30 years. I am saying it is worth protecting against the possibility, even if it means national debt.
"Look into what various energy companies are saying. They are the sources that are contradicting the "we're running out" crowd from what I've read. "
Now, I dont know about you, but I think we've learned that listening to company executives isnt the first place we go for the truth. Just look at the last couple of years. But, if you want to go there, Shell's CEO in 2008 has publically stated that peak oil is a real threat, and there are many reasons oil companies around the world may not be able to keep up with growth. He isnt alone.
Again, if I were summarize all my thoughts in one sentence:
The threat to the U.S. economy is far too great for us not to hedge in every possible way to protect us again above ground (political) and below ground (geological) supply issues for oil.
Keep in mind you can also go look for yourself at the locations being talked about. The USGS website is chock full of information that weeds out the whole oil company CEO mistrust issue.
When was is exactly that Shell Oil CEO stated that in 2008?
Was it before or after the USGS report about Bakken being assessed to hold 3-4 billion barrels of oil or was it after that report?
http://www.usgs.gov/newsroom/article.asp?ID=1911
Is the Shell CEO trying to tell us we're running out because they want to drive the price up? Maybe it's because they don't have access to get at the new discoveries?
From what I've seen and read, almost every year there is talk about new discoveries. If we're running out or reaching peak, why are they still exploring and finding new sources?
The Bakken fields, while impressive, would be completely exhausted with about 1 months of world oil demand if it were the sole provider, or 105 days if the U.S. used all the oil. To get at that oil, they have to use a fracking technology that is being heavily scrutinized as a potential ecological nightmare. Who knows if the EPA will ban it. It wouldnt be the first time the government has stood in the way of available energy by means of regulation (see Coal). There are many other sites across the world, through new technology, are expanding their collectable reserves by large amounts. There are impressive sites especially in South America.
The main issue that most people dont realize is that the giant oil fields that account for the bulk of the world's oil supply are in decline (they produce less oil every year), and there are less giants being found to replinish their supply. So, yes, we are finding a lot of new fields in new, deeper, harder to get to areas. Will they be enough to offset the declines? Who knows.Quote:
From what I've seen and read, almost every year there is talk about new discoveries. If we're running out or reaching peak, why are they still exploring and finding new sources?
I dont know the Shell CEO's motivation. Personally, I take what industry executives say with a grain of salt. I base my opinions on outside evaluation. They problem with that is that most of the TRUE facts of the vast majority of the world's fields are STATE SECRETS. We dont really know what OPEC producers have in reserve, because they deny external assessments of their fields.
If you havent seen it yet in my argument, there is significant justified debate on both sides with regards to our oil supply. We dont really know whats out there, which is why need to distance ourselves from overdependance.
I'm not surprised we are having this debate. I am fairly connected to the energy, and have contacts high within the DoE. I attend seminars on the subject of energy. Unfortunately, the publics knowledge of energy is not good, and if there is a crisis, they always seem to blame the energy companies with giving little credence to the fact that the world uses a resource on a daily level in unimaginable levels.
Think of it this way, the world uses about 43 super tankers of oil a day. I guess its possible we'll grow supply to deal with using 60 or 70 super tankers of oil a day, but the scale alone should scare anyone.
I have to agree with Carzin here as much as I hate government subsidies. I am an oil field worker so when yall refer to the oil companies as the evil enemy who wants to see the price go ski high does that lump me in there? I know that since the price was 35/barrel in Jan of 2009 to the price being in excess of 100/barrel my pay has not really varied much but I have to pay 3.89/gallon for gas just like everyone else.
We need to research alternatives but we need to make sure the ones we invest in are viable options. LNG or CNG is extremely abundant here stateside but like Carzin said there has been a large uprising against fracking and if fracking were ever regulated to extinction then our vast reserves of recoverable natural gas would not be so vast anymore. We need electric cars, hybrid cars, CNG/LNG cars, as well as gas and diesel cars. It is a combination of all of these things that is going to fuel our future and we will not be able to rely on just one to meet our needs.
But just like oil, we can't develop a dependency on coal for our power plants, especially once the energy demand rises due to plug in cars being charged all the time. The only way to really meet that need is with nuclear and after the disaster in Japan it is hard to see much of a future there.
Before anyone blames the price of oil on the oil companies you need to look at who our country put in the White house, a man who has openly stated that he wants to find a way to bring gasoline prices in the US up to the amount in Europe. This will help further his agenda as well as limit the travel of citizens and their freedoms. While it is easy to blame the people getting "rich" off oil we need to take a serious look at our policy makers and what their motives are.
As I type this I am floating 50 miles south of New Orleans, LA on a brand new deep water drilling rig called the Noble Jim Day. We are currently contracted to Shell to batch set 6 new wells in the gulf but we are waiting on a permit to get to work. Since the moratorium on offshore drilling the permit process has been painfully slow. Shell is forking out hundreds of thousands of dollars a day for this rig to sit here, waiting on the government so we can drill more wells and increase our domestic supply. If the government would let us drill than can use the tax and permit revenues from the oil companies to pay for the alternative subsidies.
I agree 100% about your point of who is in the White House and his agenda. I would add, he isn't the only one with that same agenda. Take a look at who in our government screams the loudest about oil company profits, then look at how they feel about high gas prices and how they turn the conversation over to alternatives and you see their agenda is the same if not very similar.
one of the most staggering numbers i have heard on this issue is that 14,000 new cars are added on chinas rode a DAY. think of that! if all of these cars only burned 1 gallon of fuel a day that is an increase in gasoline consumption of 121,666 bbls a year. just in cars in china. then you have to look at how fast india is growing as well as other countries. we need to figure something out fast because lets face it. there are too many people fighting for too few resources and people still keep having families with 4, 5, and even 6 children!!! if every family had 6 children to replace the two parents i cant even imagine how horrible the planet would be. also another interesting tid bit. if all the food was grown organically something like 3 billion people would starve to death according to penn and teller. just not enough farm land to provide food for the amount of people we have