cheap gas good or bad?

[cookiedough]

I keep hearing on the news that the price per barrel of oil is so low it is going to hurt the economy and stock market drastically and several companies and citizens of the U.S.

If one doesn't dabble much in the stock market, as many do,  how does that hurt people like myself being a U.S. citizen when gas is cheap having 3 vehicles to fill up every week or two? 

I'd like gas to go down to 99 cents per gallon, would benefit myself personally anyways.  Do most Americans think that having 'cheap gas' is good or bad?? 

If one doesn't go heavily into the stock market and saves over 100 bucks per week in gas with 3 drivers/3 cars to drive weekly in a household,  how is that bad?

[old2soon]

THEY-pick an entity-do NOT WANT us mere peons getting ahead of the curve-extry money to spend. Much better if we are on a gubmint tit. I've also heard t mentioned that the rag head oil companies want to keep us-U S of A from drilling and pumping our own oil. Take yer pick. RIDE SAFE.

[..]

Oil / gas drilling workers will be let go. They in turn wont have money to spend.

Companies supplying the industry will let people go. They in turn wont have money to spend.

Companies supplying those companies will let people go. They in turn wont have money to spend.

Local business's will see a down turn and may have to let people go.

That's just the tip of the iceberg.

[Alpha Dog]

The cheaper the energy the more economic progress a country or group can make.  The universe is nothing but energy.  Figure out how to tap it and make it free or next to free and you will see economic freedom like never before.

With that said, as it is set up now I would like to find a happy medium where the energy growth that has happened on private lands in the past several years has led to this time of 1.45 per gallon I paid in Eaton, OH, yesterday.  I do not want to see this vital industry in our  country destroyed by Arab and other Cartel countries dumping oil on the market to drive them out.  Of course once that is achieved they will make us pay through the nose again.  There is a price where the current energy suppliers of the US and Canada can make enough money to prevent this, but I do  not know what that price is.  I suspect 2 to 2.25 per gallon for now would achieve this, maybe someone on here knows the price.
Chuck

[Serk]

It's a double edged sword.

One thing we need to look at is WHY are prices suddenly so low?

A theory I've read, and I put some stock in, was that the OPEC nations didn't like the competition they were getting from US domestic production, especially using more advanced (And expensive) methods that are only profitable if oil is above a certain price per barrel. (Shale being one of the biggies)

So, they decided to over produce to drive the price below the point where US domestic production is profitable, driving those companies out of business, pushing the people that were coming up with the new tech out of those jobs and make them find other work.

The catch is, once they've wiped out the US Domestic companies, do we really think they'll allow the price to stay this low?

Of course, once they bring the price back up the US domestic production would become profitable again but it takes a lot of time to bring those kind of things back up to speed again, and many investors would be wary of backing domestic interests with the knowledge that on a whim the OPEC nations could just crash the market again and drive them out of business once more.

Or to put it another way, the pigs would gladly vote for the farmer that feeds them today, even knowing he will slaughter them soon.

[Rams]

My son who remotely works in the oil/gas industry recently took a leave of absence to go to Para-Medic School.   He is a firefighter/EMT and leads a Rescue Team for a world wide company.   The reason he chose now was because of the down turn and layoffs that are effecting that industry.

He was told that the price of oil needs to be at least $40 to $45 a barrel for his company to stay functionally employed.    Prior to this, he was working over a hundred hours a week, he was down to 30 hours or less a week for the past few months.   

[old2soon]

I just read where the lenders to the mining industries-drilling for oil is mining-are in the process of downgrading the mining industry companies which in turn means it will cost the companies more to borrow the money they need to operate.  The animal consuming itself to stay alive! Course I thought the whole shebang-economy-was gonna collapse before now but looks like they speeded up the engine and released the brakes on our downhill rush to destruction.  I PRAY I'm wrong but COULD this be the change the current administration has been harping on?  RIDE SAFE.

[Patrick]

Trying to put our companies OOB or doing anything they can to stop our coil production is exactly what opec is trying to do. And, it seems to be working. As said, oil workers are being laid of the droves.
I still think the sooner we become energy independent the better, whatever it takes.
I think the oil and gas should be kept in this country and the new port on the east coast for natural gas export shouldn't be built.
I also think we should not have let those *&&$*(^# have the oil and technology our boys from Texas and Oklahoma used to find and extract that oil way back in  1938. They would still be herding camels and living in tents.

[The emperor has no clothes]

It is a double edged sword indeed. My sister in law was just laid off. Hopefully the rest of our family in the industry will not. But lower gas prices make just about everything cheaper. I think OPEC has a part in it but I think there are many other factors that go into the price of oil.

[Robert]

The US oil producing companies have just lobbied and won through our Congress the right to export and sell the oil we have here. We have now become a major player in the oil production business ahead of Saudi Arabia coupled with the drop in demand and the stock market not bidding up the prices.

I remember Exxon holding a press conference and saying that profits were up big time when gas prices were at their highest. Supposedly the high gas prices were because of the cost of per barrel oil prices being so high.  

I'm sorry, but when the US population was suffering and money being taken out of the pockets of the average citizen they were elated at their bottom line figures. So while I am sorry for the families that work in the oil industry I could give a dam for the corps.

ExxonMobil Announces Biggest Profit Ever
Record net income for third-quarter of $14.83 billion up 58% from third-quarter '07

http://www.cspnet.com/industry-news-analysis/corporate-news/articles/exxonmobil-announces-biggest-profit-ever

Exxon Mobil Profit Sets Record Again

Exxon Mobil earned more than $1,287 of profit for every second of 2007.

[Punisher]

But lower gas prices make just about everything cheaper

What have you seen that is cheaper because of the lower fuel prices?   I certainly haven’t see anything cheaper.   Transportation and shipping costs are still higher, food is still higher and still going up, etc.    Once the Corporations went up in prices to account for higher fuel prices they are reluctant to lower the prices, they want their share of the greed too.

The saying I always heard regarding fuel prices (and everything else now it seems) is that “it goes up like a rocket but comes down like a feather.”

The US oil producing companies have just lobbied and won through our Congress the right to export and sell the oil we have here. We have now become a major player in the oil production business ahead of Saudi Arabia coupled with the drop in demand and the stock market not bidding up the prices.

I remember Exxon holding a press conference and saying that profits were up big time when gas prices were at their highest. Supposedly the high gas prices were because of the cost of per barrel oil prices being so high. 

I'm sorry, but when the US population was suffering and money being taken out of the pockets of the average citizen they were elated at their bottom line figures. So while I am sorry for the families that work in the oil industry I could give a dam for the corps.

ExxonMobil Announces Biggest Profit Ever
Record net income for third-quarter of $14.83 billion up 58% from third-quarter '07

http://www.cspnet.com/industry-news-analysis/corporate-news/articles/exxonmobil-announces-biggest-profit-ever

Exxon Mobil Profit Sets Record Again

Exxon Mobil earned more than $1,287 of profit for every second of 2007.

+100

Where were the cries of price gouging from our government officials?  The silence was deafening because their pockets were getting lined more too.   Greed seems to have become more rampant in the last decade.

[Black Pearl's Captain]

Count me as another that think the Arabs are trying HARD to kill other oil giants off.

Cookie you must not live near nor have any family working in oil related fields or you would already know why $25 oil is not good for the US. All the oil producing states have already laid off lots of workers. I've had 2 in my family laid off and they are both indirect companies in supply companies.

Alaska is short 3/4's of it's years state budget from oil income. The recently thriving North Dakota oil fields are slowing down. New Mexico and West Texas oil fields are laying off heavy.

the largest oil "tank" in the world is in Cushing Oklahoma, it reached a new record for the amount oil stored ever just last week. The holding tanks are currently 80% full. Nationwide storage is at an all time high and when we have all we can hold where will we put the oil? No oil being pumped = no income for the oil industry (bankruptcy).

Venezuela will probably be bankrupt in months. 50% of it's income is from oil. (who do you think will help them out?)

Oil is projected by some to go to $10 a barrel this spring, I doubt ANY US oil filed will be running at a profit at that price and the companies will fall like leaves on a tree.

And Iran hasn't even flooded the market with their oil yet. It is to hit the markets next month. Iran has the worlds 5th largest oil reserves (US is 14th). Iran recoverable liquid hydrocarbon reserves at the end of 2006 was 138.4 billion barrels. That will last them 98 years at 2006 production rates. The US currently uses 19 million barrels per day.

Yes I think CHEAP oil is a bad thing for the USofA. If oil companies don't make a profit then Joe oil worker has no income.

[98valk]

the oil industry is only 18% of our economy.

2017 is when all gas must be low sulfur which means higher cost nation wide , California started in '06, we have seen their high gas costs.

expect to see $5-10 per gallon after 2017 and possible gas lines rationing, like in '74.
increase the fuel tanks of all vehicles if possible.

[cookiedough]

that's just it, everyone is looking out for their own well being, screw the rest. 

I see it all the time even at the pion job level. 

everyone wants to play the blame game instead of doing a team work environment and getting the work done regardless if individuals at work or a large oil company. 

I just feel sorry for all the laid off oil workers for sure since downsizing is NO fun knowing that first hand having worked 6 years at GM back in the 90's and enjoying my job daily then they closed our office and moved our branch office to another city and ONLY 4-5 of the 45+ office workers stayed with the company.

Then again, lower oil/gas prices puts near 100 bucks per week more in my pocket vs. when it was well over 3 bucks per gallon (over double in price as it is now being well under 1.80 per gallon). 

[Gryphon Rider]

It's as simple as this:

Countries' economies are healthier with a trade surplus than a trade deficit.

The price of fuel is a function of the price of oil.

The Middle East can make a profit at a very low price of oil.

North America can make a profit producing from some of its existing oil fields at a low price, but the lower the price of oil, the more wells are shut down because is costs more to keep them flowing than not.  Much of North America's oil reserves can only be tapped at a higher cost, such as with offshore and oil-sands reserves.
With a low price of oil, exploration of new fields is severely curtailed.

Reduced North American production means far fewer production and service industry jobs.  The people who moved to oil-rich areas for employment are moving back home, where they increase the unemployment rates, either by being unemployed at home, or taking the job of someone else.

Trade surpluses become trade deficits and the economy suffers.

[Black Pearl's Captain]

It's as simple as this:
The price of fuel is a function of the price of oil.

The price of fuel is also a function of the good old taxes here in the US anyway. Tax (state and federal) on a gallon of diesel ranges from $.90 per gallon in PA. to $.41 in Alaska.

I just looked and diesel in PA is as cheap as $2.03 so they are paying almost as much in just taxes.

No need to fret over oil companies making a profit, they are most all publicly traded companies and anyone can own a piece of the pie if you buy company stock. Anyone want to buy right now? And which of us doesn't want to see the companies we work for make a profit. I think most would liek the more profit the better.

If you dislike a company making a profit I'll bet Venezuela will let you move there right now and bring your money with you. No big companies making the scary profits, the king keeps it all. Did anyone else see the recent NPR atricle on food in Venezuela? Great country with alomst free gasoline but no bread on the shelves and you have to stand in line all day just to buy food.

[Master Blaster]

Back about 20+ years ago, I was flying for the oil companies, and oil went up to 35 bux a barrel.  The oil companies went crazy, drilling everywhere off shore.  There wasn't enough drilling rigs available to meet the demands.  There were many big strikes of oil and natural gas that were just capped and not brought into production.  They were banking on the prices to keep on the rise if they restricted the flow.  They even were bringing rigs in to the Gulf from the North Sea.  I have been out of it for a long time now, so don't know what happened to the capped wells, but am sure once the price per barrel spiked, they were brought on line.  Back before the greed got out of hand, the manned platforms supported a large crew along with a cook and attendants, after many manned platforms only had one person aboard and many that once were manned had none.  Some of the living quarters  were very plush and all this was done before oil started its rise.   Guess what I am getting at is back when in the past, life offshore was good.

[Oss]

Its the new millenium method of Mutually Assured Destruction

The POTUS job to is protect the USA

President should get off his knees and tell the Saudi prince that we will immediately stop the fight against Isis and cancel any and all treaties and aid unless they play fair today and put production where our industry can survive  That goes for Quatar Bahrain etc

Who said 18% would you let 18% of your body get hacked off

If oil is 25 a barrel what is the real price per gallon?

[old2soon]

that's just it, everyone is looking out for their own well being, screw the rest. 

I see it all the time even at the pion job level. 

everyone wants to play the blame game instead of doing a team work environment and getting the work done regardless if individuals at work or a large oil company. 

I just feel sorry for all the laid off oil workers for sure since downsizing is NO fun knowing that first hand having worked 6 years at GM back in the 90's and enjoying my job daily then they closed our office and moved our branch office to another city and ONLY 4-5 of the 45+ office workers stayed with the company.

Then again, lower oil/gas prices puts near 100 bucks per week more in my pocket vs. when it was well over 3 bucks per gallon (over double in price as it is now being well under 1.80 per gallon). 

           Guessing you worked in Janesville. I was driving for Heartland when G M quit Janesville. RIDE SAFE.

[F6Dave]

I've worked in the Oil & Gas industry for over 30 years.  I've seen many boom/bust cycles.  I remember when oil was below $10/BBL in the early 90s.

The current market is no fun but was inevitable, even without OPEC flooding the market.  The U.S. industry just got too good at drilling and producing from shale.  Now we have too much, and prices have plummeted.  That's the marketplace at work.  It will correct itself as no one can produce at a loss indefinitely.  I've read that Saudi Arabia is losing $10-$15 BILLION per month at these prices.

The end result will be a better, more efficient industry.

[Alpha Dog]

I just looked and diesel in PA is as cheap as $2.03 so they are paying almost as much in just taxes.



If you dislike a company making a profit I'll bet Venezuela will let you move there right now and bring your money with you. No big companies making the scary profits, the king keeps it all. Did anyone else see the recent NPR atricle on food in Venezuela? Great country with alomst free gasoline but no bread on the shelves and you have to stand in line all day just to buy food.
[/quote]

One of my vehicles is a diesel.  It was 1.74 for diesel in Sidney, Ohio yesterday.  Had to do a double take and felt stupid for buying it for 2.09 earlier in day in my hometown.

There is one guy doing well in Venezula.  Miguel Cabrera of the Tigers is due to make about 25 million this year.

[Robert]

I just looked and diesel in PA is as cheap as $2.03 so they are paying almost as much in just taxes.

If you dislike a company making a profit I'll bet Venezuela will let you move there right now and bring your money with you. No big companies making the scary profits, the king keeps it all. Did anyone else see the recent NPR atricle on food in Venezuela? Great country with alomst free gasoline but no bread on the shelves and you have to stand in line all day just to buy food.

One of my vehicles is a diesel.  It was 1.74 for diesel in Sidney, Ohio yesterday.  Had to do a double take and felt stupid for buying it for 2.09 earlier in day in my hometown.

There is one guy doing well in Venezula.  Miguel Cabrera of the Tigers is due to make about 25 million this year.

Obama and George Soros had a hand in that market.

Obama Underwrites Offshore Drilling
Too bad it's not in U.S. waters.
Aug. 18, 2009

You read that headline correctly. Unfortunately, the Obama Administration is financing oil exploration off Brazil.

Back in 2009 the Obama regime announced it was going to “loan” Brazilian oil giant Petrobas $10 billion. It just so happens, as was reported at the time, George Soros bought controlling interest in the state controlled oil company, just before the “loan.”

It was also reported at the time the China Development Bank made a similar loan to Petrobas.

Just a year ago Obama was in Brazil telling them he wanted to help them with America technology and other tangibles. He also said he wanted the United States to be one of Brazil’s best customers:

 Is it a coincidence that Obama backer George Soros repositioned himself in Petrobras to get dividends just a few days before Obama committed $2 billion in loans and guarantees for Petrobras’ offshore operations?

[98valk]

also our dollar is very strong right which has pushed down the price. oil is priced in dollars, something others countries want to change. when oil was over $100/barrel our dollar was very weak. the dollar value has very, very much to do with the price of oil.

[cookiedough]

that's just it, everyone is looking out for their own well being, screw the rest. 

I see it all the time even at the pion job level. 

everyone wants to play the blame game instead of doing a team work environment and getting the work done regardless if individuals at work or a large oil company. 

I just feel sorry for all the laid off oil workers for sure since downsizing is NO fun knowing that first hand having worked 6 years at GM back in the 90's and enjoying my job daily then they closed our office and moved our branch office to another city and ONLY 4-5 of the 45+ office workers stayed with the company.

Then again, lower oil/gas prices puts near 100 bucks per week more in my pocket vs. when it was well over 3 bucks per gallon (over double in price as it is now being well under 1.80 per gallon). 

           Guessing you worked in Janesville. I was driving for Heartland when G M quit Janesville. RIDE SAFE.

No, GMAC financing company in Madison WI in the 90's,  part of GM but NON UNION crappy pay but same good benefits otherwise almost.  My dad worked for GM in Janesville though from 1954 to 1988 after his 2 years in the Korean War until I graduated high school. 

[cookiedough]

the oil industry is only 18% of our economy.

2017 is when all gas must be low sulfur which means higher cost nation wide , California started in '06, we have seen their high gas costs.

expect to see $5-10 per gallon after 2017 and possible gas lines rationing, like in '74.
increase the fuel tanks of all vehicles if possible.

Better not be,  5-10 bucks per gallon cannot be justified in today's  U.S. current economy and very few could afford to even drive to work then for sure.

[Xtracho]

With 30 years in the industry here is my take:

OPEC created this mess to destroy the shale oil & fracking development and production. Those two segments require PPB of around $65-70 to be profitable. In that regard, OPEC has accomplished that goal. But now it's coming back to bite them in the ass. While the Saudis may be able to weather such a loss for who knows how long, the other OPEC member nations, most notably Venezuela, Ecuador, & Nigeria, cannot bear such economic losses for very long.

With the Iranian oil soon to reach market & the recent lifting of the ban on US oil exports, expect more crude to become available on the world wide marketplace. And it would be reasonable to predict that the Iranians are willing to sell their gazillions of barrels at fire sale prices to prop up an economy that has been thrashed by years of sanctions.

Result will most likely be that the trending down of PPB prices to continue....temporarily.

OPEC member nations, other than the Saudis, are screaming to the rafters as we speak. I expect there to be a major move by OPEC to prop up PPB prices by capping production. With the Iranian oil sales looming and US crude now a player in the world wide market, the Saudis can only see further losses to their country's wealth. They will not allow that to continue, nor will they allow the Iranians to glut the market with their huge surplus.

Domestic offshore production requires PPB prices at $50-70 to realize a profit. I don't think anyone in my industry would be disappointed should PPB stabilize at those levels. And that price level would also appease OPEC.

With regards to the "teamwork" mentioned by one poster; crowing about saving a C-note per week at the pump. How about this? With over 100,000 industry workers laid off, and not even counting the ancillary businesses that support the oilfields, a relatively stable PPB & price at the pump that would put those workers back to work & be able to support and feed their famlies?

Or better yet, tell OPEC to kiss off and let's make this country energy independent.

And for those of you feigning sympathy for the industry employees that are in dire straits? Please, your transparency is....well....transparent.

[CajunRider]

From a Louisiana Oil Man...  (Me).

Oil is now less per barrel than the mid 90's.  In the mid 90's, gas was below $1 per gallon. 
Why are we not seeing less than $1 gas right now????? 
Taxes and the Regulatory burden (thanks EPA). 

I'm afraid you will NEVER see $1 gas again... even if cude can come out the ground for free. 

Secondly... Louisiana economy is close to 40% oil & gas related.  We are ALL feeling this. 
The rest of the nation isn't as bad off... but oil & gas are still a BIG part of the over-all economy. 
The rest of the nation may not be feeling it now, but they will be soon. 

There IS a sweet spot where everybody wins... somewhere more than $30 per barrel, but less than $120 per barrel.  I don't know where in that gap lives the sweet spot... but it's in there some where. 

The sweet spot is the price at which neither the economy hurts from high gas prices nor does the oil & gas industry hurt from the low oil prices.  Whether you believe it or not, this is where we WANT to be... everyone. 

On a more personal note... The cheap gas doesn't come anywhere CLOSE to covering the 20% pay cut I have to endure.  But, I'm still one of the lucky ones since I still have a job. 
More than 60% of my company has been laid off, and there may be more to come. 
Many companies have already closed in this area, and there may be more to come. 

[Xtracho]

The sweet spot is the price at which neither the economy hurts from high gas prices nor does the oil & gas industry hurt from the low oil prices.  Whether you believe it or not, this is where we WANT to be... everyone.

 

On a more personal note... The cheap gas doesn't come anywhere CLOSE to covering the 20% pay cut I have to endure.  But, I'm still one of the lucky ones since I still have a job. 
More than 60% of my company has been laid off, and there may be more to come. 
Many companies have already closed in this area, and there may be more to come. 

My pay cut was closer to 40%. But like you I'm just happy to still be working....although we are all on pins and needles.

[Serk]

I am lucky in that I was able to move to a non-oil company with no change in pay, but the oil crash caused a "job event" for me as well...

As you said, hope we can find that sweet spot and stay there...

[RP#62]

Guess it just depends on what sector you're in.  I went through three rounds of pay cuts and lost a lot of coworkers due to lay offs when oil prices were spiking and helping to kill the transportation industry.  I think we figured that every 1 cent increase in fuel prices added 11 million in overhead annually.

-RP

[Serk]

Guess it just depends on what sector you're in.  I went through three rounds of pay cuts and lost a lot of coworkers due to lay offs when oil prices were spiking and helping to kill the transportation industry.  I think we figured that every 1 cent increase in fuel prices added 11 million in overhead annually.

-RP

Yeah, hoping for that sweet spot, just moved from oil to transportation myself... *Knock on wood*