Random thoughts that are pointless and too dumb to say anywhere else thread ~ 2022 ~

[stalton]

For as much spinach that I eat, I wish I had Popeye's muscles to go with it.

[wallus]

I don't fully understand the large increase in oil pricing. Has the market greatly increased demand? Well not really. Demand is up from people moving again from the pandemic but it seems to be more gradual. I think you will see a few more people ask to work from home, carpooling and maybe less "random Sunday drives". Yes the US banned Russian imports but Europe and China have not and they buy a lot more of it than we do.

 

What about supply? As far as I have read, supplies have increased slowly. Probably not enough to keep up with normal demand which is why oil pricing was increasing before this conflict. They say that larger publicly traded oil producers are not producing as much because they don't want to oversaturate the market and want to return profits to shareholders. (remember when oil prices were negative?) The smaller private producers are increasing production but finding difficulties getting equipment and workers.

 

Now I drive an EV so this doesn't effect me directly. Obviously it affects me indirectly.

 

So I guess the only random conclusion I can come up with is speculators driving up the future price. In that case, f them.

[Ron Robinsons Beard]

I don't fully understand the large increase in oil pricing. Has the market greatly increased demand? Well not really. Demand is up from people moving again from the pandemic but it seems to be more gradual. I think you will see a few more people ask to work from home, carpooling and maybe less "random Sunday drives". Yes the US banned Russian imports but Europe and China have not and they buy a lot more of it than we do.

 

What about supply? As far as I have read, supplies have increased slowly. Probably not enough to keep up with normal demand which is why oil pricing was increasing before this conflict. They say that larger publicly traded oil producers are not producing as much because they don't want to oversaturate the market and want to return profits to shareholders. (remember when oil prices were negative?) The smaller private producers are increasing production but finding difficulties getting equipment and workers.

 

Now I drive an EV so this doesn't effect me directly. Obviously it affects me indirectly.

 

So I guess the only random conclusion I can come up with is speculators driving up the future price. In that case, f them.

 

Oil companies are raking in record profits through price gouging, and without getting too political, are using the Ukraine conflict and the current administration as an easy scapegoat to justify that gouging. And many are buying it hook, line and sinker.

[jerichoholicninja]

Hurricane in the gulf?

Holiday weekend?

Shutdown oil rig or pipeline leak somewhere in the world?

 

There's always some baseless excuse to raise prices.

[wallus]

I don't fully understand the large increase in oil pricing. Has the market greatly increased demand? Well not really. Demand is up from people moving again from the pandemic but it seems to be more gradual. I think you will see a few more people ask to work from home, carpooling and maybe less "random Sunday drives". Yes the US banned Russian imports but Europe and China have not and they buy a lot more of it than we do.

 

What about supply? As far as I have read, supplies have increased slowly. Probably not enough to keep up with normal demand which is why oil pricing was increasing before this conflict. They say that larger publicly traded oil producers are not producing as much because they don't want to oversaturate the market and want to return profits to shareholders. (remember when oil prices were negative?) The smaller private producers are increasing production but finding difficulties getting equipment and workers.

 

Now I drive an EV so this doesn't effect me directly. Obviously it affects me indirectly.

 

So I guess the only random conclusion I can come up with is speculators driving up the future price. In that case, f them.

 

Oil down double digits today. Hopefully that trend will continue.

[CheezWizHed]

I read yesterday that our oil consumption from Russia was about 7% last Nov and effectively 0% in Feb, before the Ukraine invasion and subsequent Russia oil ban. So it seems like the price jump was purely reactionary as it would have little impact on current oil sources (perhaps risk analysis, but little active supplier impact). So price gouging...

[GAME05]

The EU also ends up buying their oil from places other than Russia, so worldwide supply also shrinks, running up prices. Prices pretty much always go up in times of war because price speculation plays a huge part in the cost. Plus oil worldwide is purchased on the US dollar, so when its worth decreases, price increases. Doubly so when the gas stations themselves need to increase prices to keep up with inflation.

[TURBO]

...and as usual, the average joe blow in the USA gets screwed to the max.

[LouisEly]

I don't fully understand the large increase in oil pricing. Has the market greatly increased demand? Well not really. Demand is up from people moving again from the pandemic but it seems to be more gradual. I think you will see a few more people ask to work from home, carpooling and maybe less "random Sunday drives". Yes the US banned Russian imports but Europe and China have not and they buy a lot more of it than we do.

 

What about supply? As far as I have read, supplies have increased slowly. Probably not enough to keep up with normal demand which is why oil pricing was increasing before this conflict. They say that larger publicly traded oil producers are not producing as much because they don't want to oversaturate the market and want to return profits to shareholders. (remember when oil prices were negative?) The smaller private producers are increasing production but finding difficulties getting equipment and workers.

 

Now I drive an EV so this doesn't effect me directly. Obviously it affects me indirectly.

 

So I guess the only random conclusion I can come up with is speculators driving up the future price. In that case, f them.

 

Oil companies are raking in record profits through price gouging, and without getting too political, are using the Ukraine conflict and the current administration as an easy scapegoat to justify that gouging. And many are buying it hook, line and sinker.

 

Supply has been shrinking since 2014. While the number of US rigs has increased over the last year, it still is about 1/3rd of the number online in 2014. Since 2014 the US has been trying to get OPEC to decrease output because oil prices got so low that it was threatening to bankrupt the US oil industry, and sanctions were applied to Venezuela that have reduced their oil production, leading to a global supply decrease.

 

Oil is mostly fixed costs - the costs of exploration, drilling/rigging, and financing are spread out over the life of the well. Every oil producer knows exactly how much it costs them to bring a barrel of oil to market. When prices go too low, oil companies take rigs offline like they did in 2014 because they lose money producing it. Unfortunately when they take rigs offline, it takes six months to get them back online - thus the industry is subject to supply/demand disruptions. And, like Game said, it's global supply and demand, not US.

 

Gas prices have hardly been subject to inflation over the last 30 years. Gas prices in Feb 2016 were less than gas prices in Feb 2005. Hell, gas prices in April 2020 were about the same as April 2004, and gas prices decreased from 2012 to 2020. Oil is predominantly purchased in futures contracts based on market prices, and the contract pricing is driven by supply, demand, and speculation, thus gas prices are driven by oil supply, demand, and speculation and demand is probably the least influential of the three - unless you have a major global event like a pandemic, it's relatively inelastic.

[Ron Robinsons Beard]

I don't fully understand the large increase in oil pricing. Has the market greatly increased demand? Well not really. Demand is up from people moving again from the pandemic but it seems to be more gradual. I think you will see a few more people ask to work from home, carpooling and maybe less "random Sunday drives". Yes the US banned Russian imports but Europe and China have not and they buy a lot more of it than we do.

 

What about supply? As far as I have read, supplies have increased slowly. Probably not enough to keep up with normal demand which is why oil pricing was increasing before this conflict. They say that larger publicly traded oil producers are not producing as much because they don't want to oversaturate the market and want to return profits to shareholders. (remember when oil prices were negative?) The smaller private producers are increasing production but finding difficulties getting equipment and workers.

 

Now I drive an EV so this doesn't effect me directly. Obviously it affects me indirectly.

 

So I guess the only random conclusion I can come up with is speculators driving up the future price. In that case, f them.

 

Oil companies are raking in record profits through price gouging, and without getting too political, are using the Ukraine conflict and the current administration as an easy scapegoat to justify that gouging. And many are buying it hook, line and sinker.

 

Supply has been shrinking since 2014. While the number of US rigs has increased over the last year, it still is about 1/3rd of the number online in 2014. Since 2014 the US has been trying to get OPEC to decrease output because oil prices got so low that it was threatening to bankrupt the US oil industry, and sanctions were applied to Venezuela that have reduced their oil production, leading to a global supply decrease.

 

Oil is mostly fixed costs - the costs of exploration, drilling/rigging, and financing costs are spread out over the life of the well. When prices go too low, oil companies take rigs offline like they did in 2014 because they lose money producing it. Unfortunately when they take rigs offline, it takes six months to get them back online - thus the industry is subject to supply/demand disruptions. And, like Game said, it's global supply and demand, not US.

 

Gas prices have hardly been subject to inflation over the last 30 years. Gas prices in Feb 2016 were less than gas prices in Feb 2005. Hell, gas prices in April 2020 were about the same as April 2004, and gas prices decreased from 2012 to 2020. Oil is predominantly purchased in futures contracts based on market prices, and the contract pricing is driven by supply, demand, and speculation, thus gas prices are driven by oil supply, demand, and speculation and demand is probably the least influential of the three - unless you have a major global event like a pandemic, it's relatively inelastic.

 

Umm ...?

[LouisEly]

Umm ...?

Did you look at the graph? Gas prices were declining long before the pandemic.

[Ron Robinsons Beard]

Umm ...?

Did you look at the graph? Gas prices were declining long before the pandemic.

 

I don't see anything drastic that was not pandemic-related. You compared April 2020 to April 2004, but April 2020 prices were 100% pandemic related.

[LouisEly]

I don't see anything drastic that was not pandemic-related. You compared April 2020 to April 2004, but April 2020 prices were 100% pandemic related.

 

1) What pandemic was going on from June 2014 to Feb 2016 that caused gas prices to drop almost $2/gallon to $1.872 versus the $1 drop in price from May 2019, when the economy was perhaps booming at it's peak, to April of 2020 when gas was $1.938?

 

B) If prices in April of 2020 ($1.938) were "100% pandemic related", then why were gas prices lower in Feb 2016 ($1.872)?

[Ron Robinsons Beard]

I don't see anything drastic that was not pandemic-related. You compared April 2020 to April 2004, but April 2020 prices were 100% pandemic related.

 

1) What pandemic was going on from June 2014 to Feb 2016 that caused gas prices to drop almost $2/gallon to $1.872 versus the $1 drop in price from May 2019, when the economy was perhaps booming at it's peak, to April of 2020 when gas was $1.938?

 

B) If prices in April of 2020 ($1.938) were "100% pandemic related", then why were gas prices lower in Feb 2016 ($1.872)?

 

The average gas price dropped 70 cents from January to April 2020. Speculators knew COVID was a threat starting in January. Are you arguing that the drastic fall in 3 month's time was not due to COVID? Because I don't think anything could convince me otherwise.

[LouisEly]

The average gas price dropped 70 cents from January to April 2020. Speculators knew COVID was a threat starting in January. Are you arguing that the drastic fall in 3 month's time was not due to COVID? Because I don't think anything could convince me otherwise.

Oh, the pandemic did have an influence on the price drop. It wasn't the only factor, though, and my bigger point was responding to several statements that you made that are just not true.

 

I don't see anything drastic that was not pandemic-related... April 2020 prices were 100% pandemic related.

I was pointing out several much larger drops in price over the last 20 years that had nothing to do with any pandemic, and that the overall trend over the last 10 years has been a decrease in gas prices. Gas prices dropped from May to Dec of 2019. Prices were already trending down due to other factors.

 

Oil companies are raking in record profits through price gouging, and without getting too political, are using the Ukraine conflict and the current administration as an easy scapegoat to justify that gouging

I was pointing out how the oil market works so that you can understand that oil companies are a small factor with respect to gas prices, and what factors over the last 10 years have been a bigger influence on gas prices.

 

You're complaining about something that dropped in price from 2012 to 2020. (Have you been praising the oil companies for that?) How many other things have dropped in price over that time? If you want to complain about price gouging, complain about the housing market - look what happened to those prices from 2012-2020. That's a much bigger monthly expenditure than gas is.

[Ron Robinsons Beard]

The average gas price dropped 70 cents from January to April 2020. Speculators knew COVID was a threat starting in January. Are you arguing that the drastic fall in 3 month's time was not due to COVID? Because I don't think anything could convince me otherwise.

Oh, the pandemic did have an influence on the price drop. It wasn't the only factor, though, and my bigger point was responding to several statements that you made that are just not true.

 

I don't see anything drastic that was not pandemic-related... April 2020 prices were 100% pandemic related.

I was pointing out several much larger drops in price over the last 20 years that had nothing to do with any pandemic, and that the overall trend over the last 10 years has been a decrease in gas prices. Gas prices dropped from May to Dec of 2019. Prices were already trending down due to other factors.

 

Oil companies are raking in record profits through price gouging, and without getting too political, are using the Ukraine conflict and the current administration as an easy scapegoat to justify that gouging

I was pointing out how the oil market works so that you can understand that oil companies are a small factor with respect to gas prices, and what factors over the last 10 years have been a bigger influence on gas prices.

 

You're complaining about something that dropped in price from 2012 to 2020. (Have you been praising the oil companies for that?) How many other things have dropped in price over that time? If you want to complain about price gouging, complain about the housing market - look what happened to those prices from 2012-2020. That's a much bigger monthly expenditure than gas is.

 

You are 100% correct that gas prices to operate on a wave of gradual highs and lows. My whole point, though, is that there is sometimes a tsunami effect where something external causes the prices to either bottom out in a short period, such as the pandemic in early-mid 2020, or skyrocket, such as the current Ukraine situation. There are logical reasons why gasoline prices are increasing right now. But a rise of of 50 to 60 cents per gallon in a week's time is 100% evidence of price gouging. I mean, what statements have I said "that are just not true"? I am paying $4.19/gallon right now, and that is 100% because of price gouging due to the Ukraine conflict. I fully realize that otherwise I would be likely paying in the mid $3s per gallon. If that was the case, I wouldn't be complaining, because that would simply be that accurate point of the wave.

[Thurston Fluff]

A while back someone stole a check of ours from the mail. Dude got caught and confessed. Now I just read two more people were arrested for stealing mail in the Fox River Valley. Got to wonder if it's part of the same group or if it's sort of a fad in the petty criminal world in general.

[AKCheesehead]

I have a beef with regards to price gouging. I’m out in bethel, ak and our fuel is barged up the Kuskokwim River. Price stays fixed from whatever it was for the company as of last barge of the season (September) until first fuel barge arrives and in spring. Always has, up until now, that is. Our prices went up last week on fuels despite the fact that the companies cost of what they are currently selling was from September 21 and there’s no knowing what their costs will be in June when the next fuel barges arrive.

[TURBO]

I have a beef with regards to price gouging. I’m out in bethel, ak and our fuel is barged up the Kuskokwim River. Price stays fixed from whatever it was for the company as of last barge of the season (September) until first fuel barge arrives and in spring. Always has, up until now, that is. Our prices went up last week on fuels despite the fact that the companies cost of what they are currently selling was from September 21 and there’s no knowing what their costs will be in June when the next fuel barges arrive.

 

That is lame.

 

How anyone can say that gouging isn't happening is beyond me...

[DHonks]

On 3/11/2022 at 12:42 PM, LouisEly said:

1) What pandemic was going on from June 2014 to Feb 2016 that caused gas prices to drop almost $2/gallon to $1.872 versus the $1 drop in price from May 2019, when the economy was perhaps booming at it's peak, to April of 2020 when gas was $1.938?

The price plummet in 2015 was due to a myriad of factors.  Primarily, OPEC was upset by the US shale industry flooding the market and lowering prices.  OPEC decided to respond by increasing output, with the goal of driving American shale producers out of business. North Dakota had gone from not being in the top 10 for oil production to the #3 oil producing state.  And gas was $1.25 here in Phoenix back then, which is the cheapest I’ve seen in the 20 years I’ve lived here.  It wasn’t even that low in 2020.  

[LouisEly]

On 3/12/2022 at 8:41 AM, Ron Robinsons Beard said:

 

You are 100% correct that gas prices to operate on a wave of gradual highs and lows. My whole point, though, is that there is sometimes a tsunami effect where something external causes the prices to either bottom out in a short period, such as the pandemic in early-mid 2020, or skyrocket, such as the current Ukraine situation. There are logical reasons why gasoline prices are increasing right now. But a rise of of 50 to 60 cents per gallon in a week's time is 100% evidence of price gouging. I mean, what statements have I said "that are just not true"? I am paying $4.19/gallon right now, and that is 100% because of price gouging due to the Ukraine conflict. I fully realize that otherwise I would be likely paying in the mid $3s per gallon. If that was the case, I wouldn't be complaining, because that would simply be that accurate point of the wave.

I think where we are getting mixed up is in terminology.   When you say "oil companies", I think you may be referring to the entire oil supply market which includes state-owned oil producers (OPEC, Russia, etc.) who have a much bigger influence on market prices than oil "companies".  Middle-Eastern countries have a much lower production cost than in the US, thus why there are constant negotiations with OPEC on supply - those countries can (and like Dhonks said, have tried to) run the oil companies out of business by flooding the market.

I would agree with the "price gouging" comment (and I'm sure in some micro markets with limited supply there is some) if prices never dropped, or dropped much slower than they rose.  But that isn't true; if you look at an overlay of gas and oil prices, they mirror almost exactly over the last 30 years.  In fact, it looks like price drops happen more rapidly and dramatically than price increases.  What's happening now is that countries that do not produce any oil (think Europe) are clamoring to secure supplies, driving up the contract prices.

The reason that gas mirror oil, even if current gas supplies were purchased at lower prices, is that if prices drop (which has been well documented over the last 30 years and can happen rapidly) a competitor can purchase gas at a lower price and thus they will sell for a lower price.  Most people view gas as a commodity and will purchase from whoever has the lowest price.  Not only does that company then lose out on those sales but they also increase holding costs which compounds the losses - they'll have to sell for a lower price eventually, so gas prices always mirror current oil prices.  Plenty of times gas supplies have been sold at a lower cost than acquisition when prices drop.  If there is a sustained delta between oil prices and gas prices, that's a sign of "price gouging".

This may surprise you, but the Saudi's don't want oil to be this costly.  They know that if oil gets too expensive, it accelerates the development and purchase intent of alternative fuels and technology.  How many people were motivated to buy an electric vehicle three years ago compared to today?  The Saudis are actively trying to diversify their economy because they know that once the gas market goes away their entire economy goes away, and high gas prices will bring that day all the faster.

Point being, the market is much more complex than what the "oil companies" are doing and it takes longer than a couple of weeks for global supply/demand to balance if there is an external shock.  Price spikes happen, but if you look historically they've never sustained for long periods of time.  Oil prices are already 15% lower today than last Thursday.

[stalton]

It feels at least anecdotally that people are really struggling with this time change.  I've gotten a decent amount of sleep lately but I know I'm still dragging and feeling cranky.

[zurch1818]

So far I'm loving this time change. My 16 month old son sleeps like garbage. His 5am to 6am wakeup time has miraculously shifted 1 hour. This is now the first time it has felt like sleeping in on the springtime daylight saving time!

[nate82]

What is this time changing you speak of?  If you hate it that much just move to Arizona where we don't change our clocks ever.  

[young guns]

Just saw the senate approved a bill that would end the clock changing starting 2023 by keeping dst as permanent time.