Gotta love gas prices?

General Discussion
#1

http://tapatalk.imageshack.com/v2/15/01/12/c3bc08d3ee1978253750b8c3e20bd1d1.jpg

Not sure what the rest of the country is paying, or Canada for that matter, but today was the first time I poured a full tank, 30 miles on the range meter, and it was less than $30 in the last 13-14 years at least. The B5/6 A4/S4 tank is the same size if I’m not mistaken. A barrel of oil is so cheap now that it costs the U.S. more money to manufacture a barrel of oil, $55 iirc, than it does to buy it from Russia which is something like $22. Is Russia purposely doing this? This is great for saving at the gas tank but if you’re working in the oil production industry, you may be saying goodbye to your job pretty soon. Some people think the economy might be taking another shit shortly. What’s your take on this situation?

#2

You know it’s good when fountain drinks are more then gas per gallon.

It’s about 1.95 for premium out here.

From what I understand the Saudis want to put Russia out of business and show there power. This break from high gas prices are good for the hard working guys who needs a break. But don’t get too excited apparently the president doesn’t like the idea of cheap gas something in the paper said he wasn’t going to let them stay down for long. He doesn’t control the price of gas so I assume that means bigger taxes on gas to pay for the people who don’t drive to work because they don’t want to work because we pay for everything already in taxes.

#3

Yeah, it is great for my wallet, but not really for Canada. The value of our dollar is closely tied to oil prices, and it has dropped steadily for the last 12 months.

It isnt Russia, that’s for sure. They are getting hammered because of it. The Ruble has lost half its value in the last twelve months, mainly because of the plummeting oil prices, and partly the sanctions that other countries have imposed on them because of what they are doing in the Ukraine.

It is the Saudi’s controlling the price of oil by continuing production as the price of a barrel of oil drops, and essentially flooding the market. And they say that they don’t plan to stop anytime soon.

#4

holy shit…that looks hilarious. $29.45 for most of a tank…that’s about 54 litres on a tank where 62 is the most you’ll ever get in it

I was paying about $90 a tank for the past year or two while the USD and CAD were at par. That’s filling around 60-61 litres…right around $1.50 litre for the good stuff or $5.67 per gallon.

For perspective though, my cousins in the UK were remarking that we pay in CAD what they pay in GBP for a litre of petrol…so they were paying the equivalent of about $10 a gallon !!!

The other day I paid $1.01 CAD / litre for 94 octane…so that’s $0.84 USD/litre or $3.20 USD per gallon. Still miles apart from you guys, but we’re jumping for joy about it lol.

As for why this is happening, with all commodities and economic markets, there are 2 key inputs…supply and demand. Both natural and unnatural.

Demand

  1. China is slowing
  2. Europe is slowing
  3. America is not growing as quickly as we thought
  4. Japan is stalled

The four largest economic powers/zones in the world are seeing tepid growth, and as a result the demand for energy is falling. Don’t forget all the shit that gets produced requires energy to do so. All the shit that gets shipped around the world requires energy to do so. When less of that happens, suddenly a huge amount of energy buy disappears. So we have a drop in demand…and we all know that drives prices down.

Supply

  1. America has become the world’s largest oil producer in the last few years. From being an also ran, they are now #1. That’s a fuckton of oil production coming on the market
  2. Russia too has come on strong this past decade, being the former #1
  3. Libya and Iran are back online in production
    These are the three big natural short term (last couple of years) changes that have happened to DRAMATICALLY impact the supply side of the market.
  4. OPEC has stepped back and allowed oil to free fall, as the OPEC nations cost per barrel is far lower than the US, Canada or Russia, so they know that a year or two of super low oil prices will crimp competition for the longer term while still leaving the middle east profitable. HOWEVER they need about $90/barrel for their sovereign balance sheets to make sense, so don’t expect them to stand idly by forever. This one is un-natural…i.e. isn’t just a market factor but is OPEC’s artificial control of the market price via OPEC country production cuts.

As we know when there is an increase in supply, prices tend to fall if demand stays the same. If demand also falls, prices free fall. That’s why Oil has gone from $110 to $45 (thereabouts) in the past year.

$1.95/gallon for regular is still reflecting old pricing for oil refined when it was $55/barrel. I think you’ll see $1.65/gallon for regular in america, and we will see $0.75 CAD /litre up here.

#5

Great post. With so much technology and with so much ability you would think that the refinement costs w o I’ll drop a little over time. It still takes work for us to get the oil out of the ground but from there you would like to think we can improve on the refinement costs.

#6

x2

#7

Regular gas is 77.4 here right now. I’m loving it, I get paid mileage to drive for work and the price per km has not changed yet ;D I wouldnt mind oil/gas prices being a bit higher to bring the dollar back up so I can buy more car parts from the US and I’d probably save more having things that way.

#8

Are you in Alberta? Your prices too will fall. Your tax base on a litre is about 13 cents less than say Ontario. So 77 there is about 90 here. 75 here is about 62 there for an idea of where my earlier prediction would see AB prices head!

If you’re in MB you’re somewhat in between AB and ON prices.

#9

I’m in Winnipeg MB although when I was in Calgary the first week of Dec for work gas was 3cents a litre more than Winnipeg.

#10

Wow. I haven’t seen premium under $2 in a long time. It is $2.79 here which is a hell of a lot better than the $4 it was a little while ago.

#11

Sad thing is…I can still remember when I thought I was getting ripped for paying $1.67. I can’t wait to go burn up some premium in 2 weeks!!!

#12

I am calling 2015 the year of the v10 !!!

#13

Gas in the Chicagoland area ranges from ~ $2-2.50/gallon for regular. I filled up a few weeks ago (Shell 93) and think I paid $2.79.

We need to get this Keystone pipeline built to add to the supply-side. It’s mind-blowing how such a win-win proposition has been stalled for so long.

And although not necessarily tied to oil prices, the US needs to lift its ban on oil exports. It’s irrational and unsupportable by any economic logic.

#14

didn’t they already lift the ban? or is that still being talked about?

adding keystone supply is probably not popular because it’s not pro-America or pro environment. Tough sell.

#15

No it’s still in place. It’s a relic from the '70s during the oil crisis. Doesn’t make sense any longer (probably didn’t back then either).

Keystone is actually more popular than you think. It’s one of the few issues that has bipartisan support in what is an otherwise cutthroat partisan mess in Washington. The Senate has nearly a veto-proof majority in terms of votes (the House has passed it dozens of times). The problem is that the environmentalists (in particular, billionaire Tom Steyer) have such a strong sway over the liberal wing of the Democratic Party that Obama has stalled the process in the State Department for years. We won WWII in less time than it has taken State to “study” the issue.

Politics aside, the environmentalists’ argument makes zero sense. The oil in Canada WILL be extracted and sold into the global market. There’s nothing that will be done to ultimately stop that. The question is where the oil flows. If it doesn’t move through the US, then China or some other country would be happy to reap the rewards. Moreover, transporting oil by pipeline is far more environmentally friendly than via rail or vessel. Not to mention the potential harm to human life - Quebec recently had its own tragedy when the oil train exploded. Something like 50 people were killed.

#16

Great article

http://www.vox.com/2014/12/16/7401705/oil-prices-falling

#17

sounds like he read my post and added some hard numbers. I’m going to sue.

#18

Hahaha