Regular unleaded gasoline dropped under $1.50 locally today!

[IDBoating]

My wife is filling up her minivan for $1.499 right now.

Last summer I was paying nearly $4.00 per gallon.

Here's hoping the downward trend doesn't change until at least the end of this coming summer! Woo hoo!

[Booms]

That is awesome!

However, gas in WI is going the other direction. Last week it was $1.94 today it is $2.19! WTF?!

IMO gas should never be above $2.00/gal.

[boardman74]

Thats cheap. Prediction I read earlier in the week said things will likely be back around $3 by summer. But who knows, economists are about as accurate as weathermen. Might as well enjoy it while we can.

[IDBoating]

It's a Catch-22. With the US finally starting to drill new wells again, we are importing less and the on-market supply is increasing, which the iron law of supply and demand says results in lower crude prices. Hence the precipitous drop to under $50/barrel recently and the panic in the middle east as their cash flows shrink. But the flip side is that as the price per barrel drops, it becomes less economical to run those new US wells. If they start shutting down the situation will reverse, prices will start going back up, and the western world will be sending more cash to the middle east again.

In Engineering terms, this is an underdamped cycle - wildly oscillating around what would otherwise be the norm or settling point. What we need is for the new US sources to continue, but prices to stabilize at point where those wells can operate profitably while still keeping the per-barrel price as low as possible. I've seen some projections that the number needs to be around $70/barrel for the new US production to operate. That's still way better than yesteryear's $100+/barrel prices, and it would be nice to keep our money at home rather than continuing to send it to the middle east.

[Booms]

WA - Where is the like button? You hit the nail on the head. I have a friend that works for Petro Canada and we discuss oil everyday.

That's what I meant when I said "IMO gas should never be above $2.00/gal." I just did not feel like expanding.

One would think that if the XL Pipeline does not get Vetoed it will help.

On a separate point - I read somewhere (must have been on the internet because everything is factual on the internet) that even with the US drilling more crude wells we still export more crude than we keep for ourselves. I am all for people making money but that still erks me.

[talltigeguy]

Wouldn't we rather have a rich oil sheik in Alberta than Saudi? Or better yet, in the USA.

I don't think it would make any sense for us to simultaneously export and import...but when the government gets heavily involved, the outcomes don't always make sense.

[Smcqueen]

Oil is a commodity traded on a global level. It will be loaded on ships or in pipelines and transported to the highest bidder. Actually, I think most of our oil imports come from south America. While the Saudis do influence global pricing, much of their oil heads to Europe.

[Smcqueen]

https://oilprice.com/images/tinymce/James10/AE3352.jpg

my bad, Canada is our top importer according to this document.

[Smcqueen]

http://www.npr.org/news/graphics/201...ilprod-300.gif

Sorry, my bad again, I'm beginning to think the internet is not a reliable source of information.

[Dandy]

It's a Catch-22. With the US finally starting to drill new wells again, we are importing less and the on-market supply is increasing, which the iron law of supply and demand says results in lower crude prices. Hence the precipitous drop to under $50/barrel recently and the panic in the middle east as their cash flows shrink. But the flip side is that as the price per barrel drops, it becomes less economical to run those new US wells. If they start shutting down the situation will reverse, prices will start going back up, and the western world will be sending more cash to the middle east again.

In Engineering terms, this is an underdamped cycle - wildly oscillating around what would otherwise be the norm or settling point. What we need is for the new US sources to continue, but prices to stabilize at point where those wells can operate profitably while still keeping the per-barrel price as low as possible. I've seen some projections that the number needs to be around $70/barrel for the new US production to operate. That's still way better than yesteryear's $100+/barrel prices, and it would be nice to keep our money at home rather than continuing to send it to the middle east.

I agree with this! I have heard that the US needs $70-$80/barrel to continue punching new wells and need $50-55/barrel just to break even on pumping existing wells. The OPEC group can still operate down to $35-40/barrel. I believe that we all need to accept fuel prices of $2.50-$3.00/gallon, which should allow the barrel price to hover around the $70 mark, keeping the oil money in North America and keeping jobs for those willing to work and contribute.

Yes, I realize that each family has more disposable income if gas is less, but let's face it, it is not typically being used to pay down debt. It instead is used for the extras, more electronics, more clothes, more more more - and the majority of these mores are produced in other Countries. Now the extra money is again leaving our economy. With too low of fuel, we are not keeping the money local for the fuel or the extras.

Rant over.

BTW - it's fun to see a non boat related topic on occasions.

[dilpickle]

http://www.npr.org/news/graphics/201...ilprod-300.gif

Sorry, my bad again, I'm beginning to think the internet is not a reliable source of information.

It's OK, you are looking at info presented in different ways from different years (2012 & 2013). I think 2014 would display our lessening reliance on foreign oil, before the price started to fall below NA operating costs.

[ericinmich]

Weird. In Michigan I saw as low as $1.70 a few weeks ago. Now it's going up, at $2.09 best I can find...

[Johnnymac]

I livied the dream & filled the Truck up at $.84/liter today at a full serve just outside of Toronto. For you south of the boarder, that converts to $3.17 for a US gal in cdn funds or $2.38 us/ gallon based of $1.25 fx rate. Interesting the price differences dividing the boarder... refineries are cashing in with this volatile market. I told my wife the 40k liter pool is getting filled with 94 octane for the summer. Lol. To bad it's a 6 week shelf life.

[ChrisBarnes05-12-84]

I work in the oilfield and I will just say enjoy prices while you can because it's gonna go the other way in a hurry. To many companies scaled back their drilling and we are only overproducing by a little over a million barrels per day globally. New wells in America typically lose half their production in a few months. With no new wells coming on line to offset the lost production from older ones this will create a supply glut quickly. You most likely will be paying the most you ever have by the end of the year IMO.

[ChrisBarnes05-12-84]

Also if you have extra money lying around now is a great time to put some money in the energy sector of the stock market. I have made over 1000 this week on just a few little investments.