Nita - 2015-12-17 9:34 PM

I saw it for 1.99 here the other day!! The excuse for high grocery prices was that the price the truckers paid for fuel was passed on to the consumer. Sure would be nice if the prices fell back down along with the fuel prices! (Dreaming, I know.. )

Jenbabe - 2015-12-17 9:40 PM


Grain prices have dropped along with livestock prices. I don't know if that means we'll see a drop in grocery prices. But I noticed today at the grocery store the price of ground beef was down.

bccanchaser16 - 2015-12-17 11:53 PM

 I'm still paying around $3.75/gallon up here which is nice but....... I'd rather be paying $4.50-5.00 if it meant oil would go back up to $60/barrel. These oil prices are killing us.

kboltwkreations - 2015-12-18 7:24 AM


You and me both. Its getting pretty scary.

kboltwkreations - 2015-12-18 7:24 AM


You and me both. Its getting pretty scary.

Jenbabe - 2015-12-18 7:33 AM I agree. And while I'm glad beef prices are looking a little more affordable, as a cattle owner it's not what we'd like to see. We all knew prices were going to correct and go back down, but I don't think many were expecting it to happen this soon or too drop off so quickly.

MOTIVATED - 2015-12-18 9:46 AM

My boyfriend works in oilfield sales...large equipment, and his customers don't think the o/f will come back until 2017. I live in Midland, Tx. We have 2 rigs behind our house drilling in our back pasture right now. I am not sure why we are drilling with $37 a barrel oil prices...supply and demand apparently isn't a working concept right now.

Tdove - 2015-12-18 9:51 AM


The only reason the rigs are behind your house is that the oil companies have leases that require a certain minimum level of drilling. If they just quit drilling entirely, they will loose their leases and have no place to drill when prices get better. Also, they have to keep a certain level of skilled employees so that when things do improve, they will have a good base workforce to start up with. At $37/barrel, they are definitely loosing money to drill each well. Most wells around here are 10 million dollar plus propositions. I am sure this doesn't apply to you, but actual drilling rigs look similar to pulling and rework units and some people get those confused.

Nita - 2015-12-17 9:43 PM That makes me smile.

veintiocho - 2015-12-18 8:26 AM Same here. I work for a large oil company and smile everyday I go to work and still have a job. It's scary! Wish the cattle prices would go back up too...but guessing that wont happen for quite a while!

MOTIVATED - 2015-12-18 7:46 AM My boyfriend works in oilfield sales...large equipment, and his customers don't think the o/f will come back until 2017. I live in Midland, Tx. We have 2 rigs behind our house drilling in our back pasture right now. I am not sure why we are drilling with $37 a barrel oil prices...supply and demand apparently isn't a working concept right now.

Swannranch - 2015-12-18 11:14 AM I completely understand both sides of this conversation, but for 80% of the population, it is a good thing...great thing.

I know that when we were payinb over $4 per gallon for diesel several years ago, the country was plumitting into a deep recession.  I had very good friends in Texas that had seen zero effects of the recession. 

Now this is effecting them hard.  But that's part of any economy.  My personal belief is that it was inflated too high.  Now it is too low (for profit) but it will balance out.  Every industry has gone through this, it's just a first for the Oil people. 

If the mid east continus to flood the market, and drop prices...American companies will stop drilling because they can not profit.  Then the middle east will raise prices.....when they get too high, American companies will start to drill again. 

It is completely free market, that's how the free market works.  A product is worth what someone will pay for it. 

Unless, of course, the government steps in and forces you to buy something

 

Tdove - 2015-12-18 9:46 AM Gas prices are too darn low. It really isn't good. Think of it this way folks. The reason why oil prices are low is because the world economy is bad. Trucking prices have not dropped because trucking has fallen off, due to less goods being shipped. In places that oil is produced, the economy is trickled through with the effects of oil profits, or lack thereof. Additionally, oil needs to be at a certain price point for drilling to occur. We are well below that price point and less drilling, means less production. You cannot have increased production (read less imported oil) and low prices. Low prices are just as harmful, in the big picture, as extremely high prices. This just proves the point that oil prices are not a conspiracy, as well. Many people have lost their jobs and oil companies are hurting right now. So much for Hillary taking their profits! Finally, the government receives huge amounts or funds from oil taxes, which have dramatically fallen off.

Swannranch - 2015-12-18 12:14 PM I completely understand both sides of this conversation, but for 80% of the population, it is a good thing...great thing.

I know that when we were payinb over $4 per gallon for diesel several years ago, the country was plumitting into a deep recession.  I had very good friends in Texas that had seen zero effects of the recession. 

Now this is effecting them hard.  But that's part of any economy.  My personal belief is that it was inflated too high.  Now it is too low (for profit) but it will balance out.  Every industry has gone through this, it's just a first for the Oil people. 

If the mid east continus to flood the market, and drop prices...American companies will stop drilling because they can not profit.  Then the middle east will raise prices.....when they get too high, American companies will start to drill again. 

It is completely free market, that's how the free market works.  A product is worth what someone will pay for it. 

Unless, of course, the government steps in and forces you to buy something

 

Swannranch - 2015-12-18 12:14 PM

I completely understand both sides of this conversation, but for 80% of the population, it is a good thing...great thing.
I know that when we were payinb over $4 per gallon for diesel several years ago, the country was plumitting into a deep recession.  I had very good friends in Texas that had seen zero effects of the recession. 
Now this is effecting them hard.  But that's part of any economy.  My personal belief is that it was inflated too high.  Now it is too low (for profit) but it will balance out.  Every industry has gone through this, it's just a first for the Oil people. 
If the mid east continus to flood the market, and drop prices...American companies will stop drilling because they can not profit.  Then the middle east will raise prices.....when they get too high, American companies will start to drill again. 
It is completely free market, that's how the free market works.  A product is worth what someone will pay for it. 
Unless, of course, the government steps in and forces you to buy something
 

Bear - 2015-12-18 2:12 PM

I'm working at a clinic/ER here in Stanley, ND until Monday, and I've been coming here for quite a while now. Stanley is in the Bakken, and the talk has been in anticipation that the local economy is expecting to be hit hard in 2016. That's the nature of the industry, I'm afraid.....boom and bust. The recent legislation that allows crude oil exports should help quite a bit, I would think, but the impact of that won't be as immediate as people would like to see. The Keystone will eventually become reality, I think. When that happens, the only immediate impact will be seen with investors, but I think the impact on the overall economy will lag. That might be a good thing, though.

Tdove - 2015-12-18 2:18 PM


I don't see any way that exporting oil will do anything at all. Look at it this way, the US uses more oil than it produces. So we net import oil. Now that we are going to export crude just means that we will have to purchase the same amount for US consumption. With all oil trading on a global market, in US dollars, means that what we sell and what we purchase will be roughly the exact same price. There is no real benefit whatsoever. We should keep our current oil and use it. If we sell some of our oil, that just means we have to buy even more Saudi oil and that is pretty dumb to me.

Frodo - 2015-12-18 1:53 PM

I found it interesting that Social Security recipients were denied a COLA raise this year (always very small anyway) because the cost of fuel is down. That should have nothing to do with Social Security benefits.

Bear - 2015-12-18 2:47 PM


So are you saying that lifting the ban on selling US crude to foreign countries is a bad thing?

Bear - 2015-12-18 3:20 PM Is that the reason they cited? Who said this? That's just nuts.

Tdove - 2015-12-18 2:13 PM.... The Middle East is not flooding the market. Two things have happened to make oil plummet. The first is increase US oil production, mainly from horizontal and shale oil extraction. Both of these are expensive to produce and can only occur at higher prices. The second thing, and most important, is that the global economy tanked! Oil is a global market. A bad global economy is a bad thing, especially with US debt levels as dangerously high as we are.......think playing with the risk of a US depression, not recession. Oil prices are a symptom or marker of a much bigger problem. OPEC has had nothing to do with this. OPEC is actually hurt worse than the US by low prices. They continue to produce existing wells, not increasing drilling and production (two different things).

TXBO - 2015-12-18 3:38 PM


 Technically, OPEC may not be flooding the market but they have everything to do with this.  They don't technically have a monopoly but they are a large enough producer to control current prices.  As competitive production has increased, OPEC refuses to lose marketshare.  They are most certainly participating in predatory pricing through supply control to limit exploration and production while killing competition.

OPEC has everything to do with this.

Frodo - 2015-12-18 3:36 PM


Reason being:  "A decline in inflation caused by falling gas prices."
(taken from the internet) 
 

Bear - 2015-12-18 3:45 PMThis makes a ton of sense, Jim. What is your opinion of the lifting of the ban on oil exports and while you are at it, what is your position on Keystone and it's impact, assuming it ever comes to fruition?

Tdove - 2015-12-18 4:04 PM This has very little to do with OPEC. They do not control prices and have lost market share, due to increase US production. The low prices are hurting them more than us. OPEC cannot increase production anymore than they are doing. When oil was at $100, OPEC was producing as much as they possibly could, every quarter loosing market share to increased US gains. The price fell when China and Europe's economy tanked, leaving more oil on the market than demand. Previous to this tanking, there was less oil than demand and OPEC was a full steam.

Tdove - 2015-12-18 4:04 PM This has very little to do with OPEC. They do not control prices and have lost market share, due to increase US production. The low prices are hurting them more than us. OPEC cannot increase production anymore than they are doing. When oil was at $100, OPEC was producing as much as they possibly could, every quarter loosing market share to increased US gains. The price fell when China and Europe's economy tanked, leaving more oil on the market than demand. Previous to this tanking, there was less oil than demand and OPEC was a full steam.

jbhoot - 2015-12-18 5:27 PM

Can one of the oil guys answer a question for me. What if the USA,Canada an Mexico formed their own cartel. Would there be enough oil reverses to compete with OPEC?

TXBO - 2015-12-18 5:10 PM

I'm getting ready to take my family to a Christmas play but let me give you some numbers to contemplate.
I'm going to round them off so don't get pedantic on me.

OPEC current production 34M BPD
Crude at $40 = $1.36B per day in revenue

If OPEC cut production in half that would take 20% of current world crude production off the market sending prices sky rocketing.
But assume it only raised crude prices back to $100.
17M BPD x $100 = $1.7B per day in revenue.

Why would OPEC want to sacrifice $340 million dollars per day?

  

TXBO - 2015-12-18 5:10 PM

I'm getting ready to take my family to a Christmas play but let me give you some numbers to contemplate.
I'm going to round them off so don't get pedantic on me.

OPEC current production 34M BPD
Crude at $40 = $1.36B per day in revenue

If OPEC cut production in half that would take 20% of current world crude production off the market sending prices sky rocketing.
But assume it only raised crude prices back to $100.
17M BPD x $100 = $1.7B per day in revenue.

Why would OPEC want to sacrifice $340 million dollars per day?

  

Tdove - 2015-12-18 8:19 PM
  What kind of math is this. Oil prices drop from $100 to $35 dollars with only a 1 mil/barrel/day increase in production but a 17 mil/barrel/day cut would only send prices back to $100 again? What! What alternate universe does economics and math do this? If OPEC cut by 17 million barrels a day, even the king of Saudi Arabia wouldn't be able to afford to drive accoss town! 

Tdove - 2015-12-18 4:04 PM ...OPEC cannot increase production anymore than they are doing. When oil was at $100, OPEC was producing as much as they possibly could, every quarter loosing market share to increased US gains. ....

Barnmom - 2015-12-19 12:01 PM

Just curious, what would happen to the market if all the ISIS held oil/oil production capabilities were wiped out?  What would the impact be now and in the future?  Is there a good reason we (or Russia) are not doing this, does it have anything to do with who is buying the black market oil?

Tdove - 2015-12-18 4:04 PM This has very little to do with OPEC. They do not control prices .......

Tdove - 2015-12-19 12:00 PM You should read all my posts again and reread yours, and see if you can comprehend any better a second time. You have really misunderstood the simple economics of what I have put forth. Where did I say 1 million or 3% decrease would triple prices? You can LMAO all you want. What is your involvemebt in the oil industry?

TXBO - 2015-12-19 12:26 PM


 LOL.  You lose all credibility after this.

Tdove - 2015-12-18 6:47 PM Cartels are illegal in U.S. law. Here is an article supporting what I am saying. http://www.nytimes.com/interactive/2015/business/energy-environment...
You're article supports exactly what I've said.  Here's a snippet:

 

TXBO - 2015-12-19 12:46 PM


Yes that is exactly what I have been saying. They didn't cause it to go down but they can help it go back up. Just supports how I said you can't read very well.

Tdove - 2015-12-19 12:43 PM Here you go, from a real expert and market watch article. "In recent years, the shale boom and increased production from the U.S. has “greatly reduced OPEC’s [ability to dominate] world oil markets,” said Charles Perry, chief executive officer of energy-consulting firm Perry Management." The fall had little to do with OPEC. They can cut production to try to help increase prices. But infighting has not allowed that. Just facts.

Tdove - 2015-12-19 12:49 PM
Mostly correct.  They weren't the sole cause for it to go down but they could have manipulated the decline to whatever they wanted.
 

Tdove - 2015-12-19 12:50 PM Why did it go down? From Fortune "The current free-fall in oil prices is drawing comparisons with the “bubble bursting” crash of 2008, although there are some key differences this time around, said Tarun Dang, managing partner with Trend-Wise Capital Management. “While decline in demand was the key driver for the 2008 crash, the sharp drop in prices this time around is being caused by a supply glut. Continued growth in U.S. shale production and increase in non-OPEC countries oil exports have led to excess capacity,” he wrote in a note to clients." Again, what is your involvement in the oil industry?

Tdove - 2015-12-19 12:50 PM  Again, what is your involvement in the oil industry?

TXBO - 2015-12-19 1:26 PM


 I put it in my car.

Tdove - 2015-12-19 1:34 PM I am MBA with an undergraduate emphasis in economics and have worked for WTG in Midland Tx as a pipeline business manager for 10 years. The ranch we work for is owned by the owner and president of Shenandoah Petroleum. I am involved with oil industry experts every day, in the largest oil producing basin in the continental U.S.

Tdove - 2015-12-19 2:21 PM I have no idea what you are trying to say. You are quite the circle talking smart aleck, at least today. It's not very becoming. I don't appreciate it. That is okay, I am pretty secure in myself. I wish you well.

TXBO - 2015-12-19 2:47 PM


I'm not being a smart aleck.  Sorry if I hurt your feelings though.

You were the one that started measuring manhood with education and job status.  I just wish you'd challenge my OPEC numbers.  If they're wrong, give me the right ones. 

Tdove - 2015-12-19 3:09 PM ....... I really wish I hadn't got caught up in this petty argument. I apologize to the board for so much back and forth over nothing more than my pride.

Tdove - 2015-12-19 4:35 PM I waxed the floor with you sir.

snazzy - 2015-12-19 4:52 PM  Buccees $1.69 diesel

TXBO - 2015-12-19 4:43 PM

 Right..... And OPEC has nothing to do with crude prices.


 

Bear - 2015-12-19 5:56 PM

How long can diesel be stored in a tank?

TXBO - 2015-12-19 4:43 PM

 Right..... And OPEC has nothing to do with crude prices.


 

Tdove - 2015-12-19 6:13 PM


If anyone CONTROLLED oil prices you would not have seen prices go from $140 to $40 to $110 to $35 in the course of 8 years. It's the free market and world production that controls the price. "If" OPEC were one country with one leader, they could theoretically control the price. But you have to figure, it's the markets reaction to supply, demand, and future outlook that determines the price. Production and consumption are at a near parody, over the last 8 years or so. Only when there is vast more production than usage can anyone simply control the price. You have to figure that Saudi Arabia is loosing $600 million dollars a day in revenue. Those boys sure would like to have that money back. It is their economy. If you don't think they don't want world wide consumption to improve, well I can't help you. Yeah they are hoping that the low prices squeeze out some market share back their way. But U.S. tech has increased so much they are betting a dangerous game. Saudi cannot horizontal drill or frack. So I stand by my current statement that in 2014-2015, OPEC did not cause oil prices to plummet. That is my assertion, and context for all my statements. It's not just me. Many many real experts in the industry are saying the same thing. That is where I am getting my information.

Bear - 2015-12-19 6:27 PM Why can't they horizontal drill or frack? Is it the geology?

Bear - 2015-12-19 6:24 PM

Cheryl, I think you are getting Iraq and Iran mixed up. I get what you are saying though.

Good thread.

Bear - 2015-12-19 6:38 PM Tdove said they can't horizontal drill or frack. Is it that they actually can't for some reason, or there's no need?

Bear - 2015-12-19 7:11 PM This is a wee bit off topic, but I've always toyed with the idea of getting a tank, say 1000 gals, and buying in bulk. These low diesel prices make me wish I'd done this. I just think it's nice to have that kind of reserve on hand. Comments? Advice?

snazzy - 2015-12-19 8:16 PM  This unbelievable.  Buccees in Baytown Diesel $1.56. We are filling every tank we have!