BP's disaster and current gas prices

[RD]

maybe its just me, and hopefully you all can chime into this to bring some clarity if i am missing somethign, but gas is cheaper this time of year than what it usually is/should be.  I mean, gas went down in price before memorial day weekend!  that is unheard of.

Am i mistaken, or is the lower gas prices a marketing strategy aimed at the U.S. buyers because the oil companies do not want to get anymore negative press like BP is getting?

y'alls thoughts?

[MoparManJim]

You should be happy the gas price is down AND not up.

[A383Wing]

I'm really surprised that prices have not shot up because of the "issue" in the Gulf

[Tilar]

I think it's a matter of supply and demand. There is a lot more supply than people are willing to spend what little money they have left on.

[Manfred318]

I figgured prices would skyrocket. They havent here, but they have went up $.20 in the last two days. I think they probably will before its all said and done tho. They will probably pass the cost of their screw-up on to us.

[Silver R/T]

http://www.csmonitor.com/Money/2010/0528/This-Memorial-Day-weekend-prices-at-the-gas-pump-are-going-down

[TruckDriver]

Be careful as to what you expect of gas prices. You may get what you dont want. It's still $2.65 average per gallon here.

[RD]

http://www.csmonitor.com/Money/2010/0528/This-Memorial-Day-weekend-prices-at-the-gas-pump-are-going-down

good article, thanks silver

You should be happy the gas price is down AND not up.

never said i thought it was a bad thing that prices were down, just was making an observation.. silver's article answered it.

[Todd Wilson]

Its still about $1.50 more then it should be!


Todd

[Mike DC]

Its still about $1.50 more then it should be!

There is no point at which gas is cheap enough to make people happy.  

If $1/gal was the highest price it had ever reached before now, then people would be pissed off about paying $1/gal.

[Silver R/T]

Its still about $1.50 more then it should be!


Todd

I remember paying over $4 for regular here when GW was in the office...

[bull]

All I know is back when gas was over $4/gal. the oil companies were using every lame excuse in the book to justify the prices. But now that they've wasted more than 18 million gallons of crude in the Gulf prices have never been this stable in years. Does this make any sense at all?

[RD]

All I know is back when gas was over $4/gal. the oil companies were using every lame excuse in the book to justify the prices. But now that they've wasted more than 18 million gallons of crude in the Gulf prices have never been this stable in years. Does this make any sense at all?

not a damn bit of sense if you ask me.... but hey, the state of confusion is where i have my residence status.

[derailed]

I think it's a matter of supply and demand. There is a lot more supply than people are willing to spend what little money they have left on.

[hemi68charger]

I truly think it's still following the law of supply and demand. Due to the economic downturn, people aren't traveling as much or expected to. I think there's a global surplus of grude, thus prices stay low. As tragic and visually impressive (in a negative way), one production rig doesn't make or break total global production.

We need to enjoy it while we can..........

[1BAD68]

Just wait until the government applies all their fines to BP, who do you think will actually be paying them?

[GPULLER]

That's been my theory since this oil spill started and the gas prices have been dropping.  The oil company's are dropping the prices to take heat off them.  Remember this winter they were already conditioning us for $3 gas by summer.
Think most people really don't realize how bad this spill is until they see it first hand. Now with dead birds and tar balls washing up on the shores of states from Texas to Florida, some shits gonna really start hitting the fan now. 

[ITSA426]

There's apparently so much oil available you don't even have to drill for it.  Soon every Gulf coast resident can have his/her own backyard refinery.

Actually I think the prices are being held down intentionally to avoid more political ramifications, but I understand that oil industry congressional lobby donations have risen dramatically since April, and Exxon is still pulling in about $32 million profit daily.

[Old Moparz]

When I am given a reason, or an explanation, or an excuse, by either a big corporation or the government, I reach for the steel plate I keep handy to shove down the back of my pants to protect my asshole. I don't believe a word of it, it's just plain & simple GREED.

[RECHRGD]

When gas prices peaked around here a couple of years ago, it was blamed on the increased price of crude oil.  As I recall regular unleaded was around $3.80 a gallon or so.  At that time crude had peaked at $145.00 per barrel.  Today crude is selling at $71.34 per barrel, but regular unleaded is right at $3.00 a gallon in beautiful Washington state.  Based upon the low price of crude shouldn't I be paying around $1.90 a gallon?  That sure looks like gouging to me.  Bob

[Mike DC]

               
                                           
The spill technically has no reason to affect prices, at least not in the short term.  

What are the numbers now, 18 million gallons?  On the worldwide scale (where the prices are set) that would last about 4 hours.  Take a good look at that spill on the satellite photos - that's about how much oil our country uses PER DAY.  



I agree that BP & the rest of the industry are probably selling their stuff below demand right now for the sake of their public image.


BP doesn't set the price of oil.  They are one of many oil sellers on the market.  They might need another $500 million bucks right now but that doesn't mean they can just raise the going rate for oil by whatever they need to get it.  They can have some effect on prices but not that much that fast.  

 

[bull]

That's not really the point. The point is they used every little hiccup in the system as an excuse to justify the prices when they shot up beyond $4/gal. This is more than a little hiccup and yet prices remain stable. And it's been more than a month which in this business is "long term" compared to what they were doing a couple years ago.

[Ponch ®]

I truly think it's still following the law of supply and demand. Due to the economic downturn, people aren't traveling as much or expected to. I think there's a global surplus of grude, thus prices stay low. As tragic and visually impressive (in a negative way), one production rig doesn't make or break total global production.

We need to enjoy it while we can..........

that's the most plausible explanation, IMHO (never been a big fan of conspiracy theories).

Even with the spill (and considering MikeDC's numbers), there is still a huge surplus - enough to keep the prices fairly stable. As far as "at the pump" prices, here in L.A. it's been months since theres been a major spike or dip in prices. I fuel up with 91 octane, so that's my point of reference, but since the beginning of the year its been fluctuating between 3.10-3.30/ gallon. Lower grade gas (87) has been 2.79-2.99/gallon.

[Todd Wilson]

All I know is back when gas was over $4/gal. the oil companies were using every lame excuse in the book to justify the prices. But now that they've wasted more than 18 million gallons of crude in the Gulf prices have never been this stable in years. Does this make any sense at all?

Kinda funny how that works isnt it!   Dont worry though   they will break it off in us again really soon!


Todd

[Tilar]

Its still about $1.50 more then it should be!

There is no point at which gas is cheap enough to make people happy.  

If $1/gal was the highest price it had ever reached before now, then people would be pissed off about paying $1/gal.

I can vouch for that, I bitched about it when it got to 40 cents a gallon.    It was 29 cents a gallon when I started driving and a pack of smokes cost me 39 cents. I think I was making $1.65 an hour at the time.

[Mike DC]

I can vouch for that, I bitched about it when it got to 40 cents a gallon.    It was 29 cents a gallon when I started driving and a pack of smokes cost me 39 cents. I think I was making $1.65 an hour at the time.

Yeah, I remember people were complaining in the early/mid 1990s when gas was probably as cheap as we've ever had it.  It was like $1/gallon when minimum wage was like $4-5 (and the realistic minimum wage for workers who speak english & have no felonies was closer to $6.)  

That's not really the point. The point is they used every little hiccup in the system as an excuse to justify the prices when they shot up beyond $4/gal. This is more than a little hiccup and yet prices remain stable. And it's been more than a month which in this business is "long term" compared to what they were doing a couple years ago.

The $4/gal stuff a few years ago was not normal.  It was a combination of factors including an artificially-bubbled economy and too much effects from the speculators.

But why complain?  The prices are just governed by plain old supply & demand.  The oil industry is capitalistic.  If you don't like it then you'd better start lobbying for Obama to nationalize the oil industry in america.  

[Brock Lee]

That's been my theory since this oil spill started and the gas prices have been dropping.  The oil company's are dropping the prices to take heat off them.  Remember this winter they were already conditioning us for $3 gas by summer.
Think most people really don't realize how bad this spill is until they see it first hand. Now with dead birds and tar balls washing up on the shores of states from Texas to Florida, some shits gonna really start hitting the fan now. 

I agree 1000%.

[bull]

I truly think it's still following the law of supply and demand. Due to the economic downturn, people aren't traveling as much or expected to. I think there's a global surplus of grude, thus prices stay low. As tragic and visually impressive (in a negative way), one production rig doesn't make or break total global production.

We need to enjoy it while we can..........

that's the most plausible explanation, IMHO (never been a big fan of conspiracy theories).

I wouldn't say it's a conspiracy other than to say big business is always conspiring to make big profits. It's their job. I don't think there's a liberal media conspiracy either but it just seems like there is because most people who choose the journalism route typically lean to the left and that affects the stories they choose to report on and how they report on them.

[derailed]

This kind of spill happens on a much more frequent basis than people realize in other areas such as the Niger Delta and is ignored. If they do raise prices because of the Gulf spill, Id say there using it as another excuse to stick it in our corn.

http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell

[0X01B8]

Supply and demand are part of the equation of what determines the price of oil.  Commodities like oil are just another asset class traded by speculators like investment banks, hedge funds, etc, and they move in and out of them just like they do with stocks.  Traditionally, commodities futures were traded by companies that actually intended to take delivery of the underlying products, like refineries or slaughterhouses - in the case of hog futures.  Speculation explains why oil reached $150/barrel and why it dropped to $40/barrel in less than a year, when the fundamentals of supply and demand didn't change that drastically.  Reality eventually took over and the price went to something more realistic.  I'd expect the same with the price of bacon if bacon was a legitimate asset class.

All your extra money should be in bacon, BTW.  At least you can eat it when you're broke-ass busted.

Back in the day when OPEC ruled they could do whatever the hell they wanted but those days and conspiracies in general are long gone, but that's an opinion.

As long as I'm at it - it's useful to see what countries we actually import our oil from, as politicians like to talk endlessly about "sending all our $ to countries that hate us."  It's not that simple.  The vast majority comes out of Canada, Mexico and South America.  I don't think Canada hates us - just yet.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

I might have it all wrong.

[chargergirl]

We were first told that gas prices were so high because of our, American drivers, high demand for gas. Then people started to stay home and watch their gas guzzling ways. We were THEN told that the gas prices would have to stay up because we were using too little and it was the only way they could make up the difference. RIIIIIGHT! I believe this rhetoric.

[MichaelRW]

There was a short article in the newspaper a couple days ago that said the reason this spill was not affecting gas prices was because it was an exploratory well and thus it's output had not been factored into the pricing scenarios. However, I am extremely surprised this spill was not used as an excuse to gouge us again. Do ya think, maybe, just maybe, that some big companies are learning their lesson and must be better "citizens"?

[Ponch ®]

Do ya think, maybe, just maybe, that some big companies are learning their lesson and must be better "citizens"?

no.

[derailed]

Do ya think, maybe, just maybe, that some big companies are learning their lesson and must be better "citizens"?

[Old Moparz]

Do ya think, maybe, just maybe, that some big companies are learning their lesson and must be better "citizens"?

[Mike DC]

   
Funny, I thought free market capitalism was pretty popular around here.   


 

[Ponch ®]

 
Funny, I thought free market capitalism was pretty popular around here.  


 

Only if it doesn't involve oil companies, banks, or Walmart 

[chargergirl]

 
Funny, I thought free market capitalism was pretty popular around here.  


 

Only if it doesn't involve oil companies, banks, or Walmart 

When hurricanes hit us around here there are many that go to jail for gouging. I always thought it should be the same for oil companies when they jack the price prior to a weekend.

[Ponch ®]

 
Funny, I thought free market capitalism was pretty popular around here.  


 

Only if it doesn't involve oil companies, banks, or Walmart  

When hurricanes hit us around here there are many that go to jail for gouging. I always thought it should be the same for oil companies when they jack the price prior to a weekend.

why?  if its too expensive, dont buy it.

[RECHRGD]

   
Funny, I thought free market capitalism was pretty popular around here.   


 

Only if it doesn't involve oil companies, banks, or Walmart 

When hurricanes hit us around here there are many that go to jail for gouging. I always thought it should be the same for oil companies when they jack the price prior to a weekend.

When you own the politicians you can do pretty much anything you want.

[Mike DC]

    
Whenever I'm a captive audience at the movie theater they jack up the price of everything from popcorn to water.  I don't expect the govt to intervene and arrest them for it.  

-----------------------------------------


Ask the public "should the govt intervene and keep the oil industry from jacking up prices at every chance?"  The answer would be yes. 

Ask the public "Should the govt intervene and keep the oil industry from taking bad risks and drilling in unsafe conditions?"  The answer would be yes. 


But if you ask the public "should the govt get involved in regulating the oil industry?" then the answer would be no. 

 

[Ponch ®]

   
Whenever I'm a captive audience at the movie theater they jack up the price of everything from popcorn to water.  I don't expect the govt to intervene and arrest them for it.  

-----------------------------------------


Ask the public "should the govt intervene and keep the oil industry from jacking up prices at every chance?"  The answer would be yes. 

Ask the public "Should the govt intervene and keep the oil industry from taking bad risks and drilling in unsafe conditions?"  The answer would be yes. 


But if you ask the public "should the govt get involved in regulating the oil industry?" then the answer would be no. 

 

[stripedelete]

Supply and demand are part of the equation of what determines the price of oil.  Commodities like oil are just another asset class traded by speculators like investment banks, hedge funds, etc, and they move in and out of them just like they do with stocks.  Traditionally, commodities futures were traded by companies that actually intended to take delivery of the underlying products, like refineries or slaughterhouses - in the case of hog futures.  Speculation explains why oil reached $150/barrel and why it dropped to $40/barrel in less than a year, when the fundamentals of supply and demand didn't change that drastically.  Reality eventually took over and the price went to something more realistic.  I'd expect the same with the price of bacon if bacon was a legitimate asset class.

All your extra money should be in bacon, BTW.  At least you can eat it when you're broke-ass busted.

Back in the day when OPEC ruled they could do whatever the hell they wanted but those days and conspiracies in general are long gone, but that's an opinion.

As long as I'm at it - it's useful to see what countries we actually import our oil from, as politicians like to talk endlessly about "sending all our $ to countries that hate us."  It's not that simple.  The vast majority comes out of Canada, Mexico and South America.  I don't think Canada hates us - just yet.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

I might have it all wrong.

Nope.  You got it right.

Scary part I is:  $2.50/Gal in vacation season.  I interpret that as not much really picking up in the economy.

Scary part II is: $2.50/Gal in a crap economy, look for high 3's or more when the economy recovers 50% of what  it lost.

[Silver R/T]

Gas prices keep dropping here in NW, really weird. It's almost like oil companies feel sorry for all the unemployed, poor people....not really! What was I thinking?!

[mauve66]

i wish the epa would let walmart start their own drilling rigs, then the rollback wars would start.....................

[derailed]

i wish the epa would let walmart start their own drilling rigs, then the rollback wars would start.....................

That was a good one Mauve66, especially since were already getting the WalMart grade gas at the pump anymore.

[chargergirl]

 
Funny, I thought free market capitalism was pretty popular around here.  


 

Only if it doesn't involve oil companies, banks, or Walmart  

When hurricanes hit us around here there are many that go to jail for gouging. I always thought it should be the same for oil companies when they jack the price prior to a weekend.

why?  if its too expensive, dont buy it.

Sometimes that is not an option. Catching those that are at a loss cause their generator was crunched by a tree  are forced into a bad situation. We have three...we keep them in different areas cause this is the case. One guy actually woke up to his "generator" still running however nothing in his house running. Someone had stolen his generator and left a mower in it's place. So this person was left to buy a generator at crazy prices since someone had stolen his. We make it harder to steal...we chain ours to the Dually.

[Mike DC]

 
Electricity and water are not much of an "option" either. 

That's why we made them govt controlled utilites, to protect ourselves from unfair gouging by the companies that control the sales of them. 

[derailed]

The more facts I learn about this whole thing the more I see there are many others involved in this besides BP who should be hung out to dry. I didn't realize the rig wasn't even owned by them.

[Mike DC]

 
Before the spill there wasn't exactly a lot of public support for the environmental regulations on drilling.   


Unfortunately it takes a nice big disaster like this every once in a while to remind people what private corporations start doing if they're not policed. 



   

[Steve P.]

 
Before the spill there wasn't exactly a lot of public support for the environmental regulations on drilling.   


Unfortunately it takes a nice big disaster like this every once in a while to remind people what private corporations start doing if they're not policed. 



   

That is not true for Florida. This State has been fighting the drillers and the lack of real regulation for years. CNN did a story on it a few years back when the last admin. wanted to drill here. They went back to that story some weeks ago just after the spillage began. All the States around the Gulf get big payments from the oil companies for drilling with the exception of FLORIDA. We don't because they don't like our policy.

SIDE NOTE:  I watched a show on cable called "GASLAND" last night that was very enlightening. I highly recommend you all see it.  It calls out much on regulation and the need for more and better transparency.

[472 R/T SE]

Kinda off the gas price topic.


http://www.google.com/hostednews/ap/...h4w3AD9GFJBOG1




WASHINGTON — Overwhelmed and saddened by the gargantuan size of the Gulf oil spill?

A little mathematical context to the spill size can put the environmental catastrophe in perspective. Viewing it through some lenses, it isn't that huge. The Mississippi River pours as much water into the Gulf of Mexico in 38 seconds as the BP oil leak has done in two months.

On a more human scale, the spill seems more daunting. Take the average-sized living room. The amount of oil spilled would fill 9,200 of them.

Since the BP oil rig exploded on April 20, about 125 million gallons of oil has gushed into the Gulf. That calculation is based on the higher end of the government's range of barrels leaked per day and the oil company BP's calculations for the amount of oil siphoned off. Using the more optimistic end of calculations, the total spill figure is just over 66 million gallons.

For this by-the-numbers exercise, The Associated Press is using the higher figure.

For every gallon of oil that BP's well has gushed into the Gulf of Mexico, there is more than 5 billion gallons of water already in it. And the mighty Mississippi adds another billion gallons every five minutes or so, according to the U.S. Environmental Protection Agency.

So BP chief executive officer Tony Hayward was factually correct last month when he said the spill was "relatively tiny" compared to what he mischaracterized as a "very big ocean."

But another big number that Hayward provided on Thursday also offers some troubling news. He said the reservoir of oil under the sea that is the source for the leak is believed to hold about 2.1 billion gallons of oil. That leaves about 2 billion gallons left to spew. So there are about 17 gallons of oil underneath the sea floor yet to gush for every gallon that has already fouled the Gulf. If the problem were never fixed, that would mean another two years of oil spilling based on the current flow rate.

More not-so-dreadful context: The amount of oil spilled so far could only fill the cavernous New Orleans Superdome about one-seventh of the way up. On the other hand, it could fill 15 Washington Monuments. If the oil were poured on a football field — complete with endzones — it would measure nearly 100 yards high.

If you put the oil in gallon milk jugs and lined them up, they would stretch about 10,800 miles. That's a roundtrip from the Gulf to London, BP's headquarters, and a side trip from New Orleans to Washington for Hayward to testify.

BP has spent more than $54.8 million lobbying federal officials in Washington since 2000; that's about 44 cents for every gallon of oil it has spilled. Since 2000, the oil and gas industry — along with their employees — has contributed $154.2 million to candidates for federal office. That's $1.23 for each gallon of oil spilled. Of that money, 78 percent went to Republicans and the rest to Democrats.

Take the 125 million gallons of oil spilled in the Gulf and convert it to gasoline, which is what Americans mostly use it for. That produces 58 million gallons of gas — the amount American drivers burn every three hours and 41 minutes. It's enough to fill up the gas tanks in 3.6 million cars — more than those in Louisiana and Mississippi combined.

At $2.75 a gallon for gas — the national average — that's nearly $160 million worth spilled into the Gulf.

Want your own piece of this spill? If all the oil spilled were divided up and equal amounts given to every American, we would all get about four soda cans full of crude oil that no one really wants.

[472 R/T SE]

Interesting...

http://www.youtube.com/watch?v=5c1QEKXNSFw&feature=player_embedded

[moparstuart]

 It's amazing in this day and age with all our technology someone cant stop this leak       

[Mike DC]

Interesting...

http://www.youtube.com/watch?v=5c1QEKXNSFw&feature=player_embedded

Simmons has been worth listening to on some other stuff but I dunno here. 

The "huge underwater lake of oil" is the question IMHO.  We're not hearing about this from most of the people involved.  Some people have said that whole idea is just a misunderstanding of what the Thomas Jefferson's underwater surveying actually found on the bottom recently.   

If the "huge lake" is real then Simmons's story is probably right.  If the "lake" is really just a misunderstanding of data about shifting blobs of oil/gas low in the water, then Simmons is probably wrong and the relief wells should kill this thing.