Forgive Me For Asking The Stupid Question Of The Day(gas Prices)

[brooke1]

Well, as we all now know about BP gaslines leaking, I was wondering if I should go ahead buy by airlines tickets now for my december trip......right now from Birmingham AL to MCO with tax ticktes are 209.60 each........

Just wondering what you guys would do......

Thanks
Brooke

 

[Nebsky]

I would.

Barrell of oil is thought to go up 10.00. The price might come back down around October-November.

Lets see, last year they said 3.05 average a gallon was due to Katrina. This year they have been 3.00 a gallon with no issues other than the Mid East. Maybe they conditioned us to think 3.00 is good so that when we can have that as our baseline price going forward.

Makes me want to throw up. Im just glad my wife and I carpool.

 

[PortieOwner]

Don't panic! It is way too early to say what the effect will be on prices. There are large oil inventories worldwide, as evidenced by spot prices trailing futures prices (in other words the futures holders have to dump their oil at sub-purchase price when the contract expires). These sorts of interruptions create big opportunities for arbitrage and incentives for more production elsewhere. That's what happened last year--gas got expensive here so it was imported from places it was cheaper--by Thanksgiving last Fall I saw $2.88 gas in Ohio (it had been $3.27 on Labor Day).

Obviously, higher prices if they arrive also give a big incentive for conservation. I have not seen any evidence where I live that $3 gas is expensive enough to get people to stop driving so much.

BP has a huge incentive to fix the pipeline fast. They are losing nearly $35 million per day every day that pipeline is offline. I bet you can get some pretty quick pipeline repairs done if they can throw say $70 million at the problem.

Portie

 

[CarolA]

I think you might do a LITTLE better, but a lot depends. Will you fly SW? Are you at all flexible on dates and times? Are your dates over a holiday?

SW will occasionally run a DING or a sale. I got this route for a sale in October at around $59 each way.

Now that said, there is no gurantee and things could go up, but I think unless you have a holiday you are in the average range for that route.

 

[manning]

There's more oil out there than can be refined. The hurricane season last year had more of an affect than this. A number of refineries had to shut down. One of the largest refinery has yet to come up to full capacity.

Our problem isn't a shortage of oil. It's our inability to refine all we have. There hasn't been a new refinery built since the '70s. And some have been shut down since that time.

I use to work in the oil industry since early 60s. One of the reasons gas prices were low was we produced more gasoline than we could sell at our stations. Any excess was sold to the independents. I think we were lucky to be operating refineries at around 50-60% capacity. Now we are at or near 100%.

 

[brooke1]

There's more oil out there than can be refined. The hurricane season last year had more of an affect than this. A number of refineries had to shut down. One of the largest refinery has yet to come up to full capacity.

Our problem isn't a shortage of oil. It's our inability to refine all we have. There hasn't been a new refinery built since the '70s. And some have been shut down since that time.

I use to work in the oil industry since early 60s. One of the reasons gas prices were low was we produced more gasoline than we could sell at our stations. Any excess was sold to the independents. I think we were lucky to be operating refineries at around 50-60% capacity. Now we are at or near 100%.

I agree with you a 100%, but still i cant believe the gas prices will not rise. I pay around 2.89, i bet when is all said and done, where i leave I'll be paying at least 3.20

 

[snowbunny]

The cost of oil is not going to go down by any significant amount. Ever. $30/barrel oil has gone the way of the dinosaur.

Here is a fascinating long article from this past Sunday's Chicago Tribune, in which a reporter, with an oil company's help, traced every drop of gas that arrived at a station in suburban Chicago back to its original source:

http://www.chicagotribune.com/news/specials/broadband/chi-oilsafari-html,1,6933468.htmlstory?coll=chi-newsspecials-hed&ctrack=1&cset=true

Note what conservative analysis reckons would be the cost of gas per gallon, if more of what it actually costs was passed onto consumers.

 

[PortieOwner]

The cost of oil is not going to go down by any significant amount. Ever. $30/barrel oil has gone the way of the dinosaur.

Here is a fascinating long article from this past Sunday's Chicago Tribune, in which a reporter, with an oil company's help, traced every drop of gas that arrived at a station in suburban Chicago back to its original source:

http://www.chicagotribune.com/news/specials/broadband/chi-oilsafari-html,1,6933468.htmlstory?coll=chi-newsspecials-hed&ctrack=1&cset=true

Note what conservative analysis reckons would be the cost of gas per gallon, if more of what it actually costs was passed onto consumers.

Never say never. Back in the 70s people never thought oil/gas would come down in price but it did. Once big world-wide recession and there will be a lot of oil sold cheap. That is one thing which limits someone new investments in oil production, refining, and even development of alternatives. No one knows for sure if the price of oil 5 years from now will be $30 bbl or $130 bbl.

Portie

 

[manning]

Trivia pursuit:

Watch the History channel the other day and the show was about oil.

The first oil well was drilled for the purpose providing a source for kerosene. The oil was sold for a dollar a barrel. In today's price that would be $700.00 a barrel. They had a problem with what to do with the refining by-product after the oil was refined and it had to be burned off. That is until the car came along. the by-product was........gasoline.

 

[snowbunny]

Once big world-wide recession and there will be a lot of oil sold cheap.

Portie, I'm guessing you did not read that article. If/when you do, take a close look at what the oil company executives say.

 

[kimmar067]

...my DH and I are a bit worried about driving to WDW this Friday, from Northern NJ....that's why I filled my tank up this morning @ $2.88/gal......

 

[PortieOwner]

Portie, I'm guessing you did not read that article. If/when you do, take a close look at what the oil company executives say.

I will give you one bit of advice, don't believe everything you read.

I looked at a bit of the Trib article, mostly to see if my brother wrote it or contributed (he's a reporter at that paper). But I have heard most of it many times before. I have a PhD in natural resources economics and at one time worked for the Feds in one of the programs which oversees/regulates oil and gas. At the time I knew many good oil and gas geologists.

Oil execs have an incentive in making supply looks smaller that it may be so that higher prices for their product (and for their publically-traded shares) look reasonable. They may be 100 percent correct, or 100 percent wrong. It all comes down to supply and demand and in natural resources there is a constant boom and bust cycle. If you really think oil is past the "peak" then the smart thing to do is sell your house, liquidate your 401k, and put all your money into oil futures and oil stocks. There would be no way to lose.

The fact is no one knows what the future will bring. In 1999 high-tech stocks were the only way to go, and we had "invented a new paradigm" as one expert said which outlawed the business cycle. In 1999 the execs of Cisco and Microsoft were telling us to buy their stock now because it would cost 500 percent more in 2000. Then the bubble burst.

I have no idea where things are headed but it does remind me of a resource bubble.

Portie

 

[bab31]

...my DH and I are a bit worried about driving to WDW this Friday, from Northern NJ....that's why I filled my tank up this morning @ $2.88/gal......

And I topped of my tank this am for 3.12 a gallon in northern wisconsin......

 

[dudspizza]

And I topped of my tank this am for 3.12 a gallon in northern wisconsin......

and I have a buddy who works for BP in Alaska... he called home and told his parents he will not be home for Christmas and does not know when he will be home again. He, along with many others, is working manditory 100+ hour work weeks to try to get this thing under control... his exact words were, "it wouldn't suprise me if we hit $4.00 a gallon!"

Ouch.

duds

 

[kimmar067]

and I have a buddy who works for BP in Alaska... he called home and told his parents he will not be home for Christmas and does not know when he will be home again. He, along with many others, is working manditory 100+ hour work weeks to try to get this thing under control... his exact words were, "it wouldn't suprise me if we hit $4.00 a gallon!"

Ouch.

duds

... 'OUCH!' is right...... ...if I am not mistaken, I thought I heard that the CHicago area is up to almost $4/gal already....GADZOOKS!