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  • Gas prices

    Seeing $1.97 a gallon here. Owning an appliance repair company with four service vehicles I sure am enjoying the low prices. Not sure about the long term prospects and how this will shape up. My infantile understanding is that OPEC is continuing production to snuff out American interests, such as fracking companies. Not sure fracking companies can turn a profit at $47 a barrel. Shooting myself in the foot???

    At any rate, I'm hoping to see more folks get out and attend koi shows with these low gas prices.
    Tim
  • #2

    Originally posted by Appliance Guy View Post
    Seeing $1.97 a gallon here. Owning an appliance repair company with four service vehicles I sure am enjoying the low prices. Not sure about the long term prospects and how this will shape up. My infantile understanding is that OPEC is continuing production to snuff out American interests, such as fracking companies. Not sure fracking companies can turn a profit at $47 a barrel. Shooting myself in the foot???

    At any rate, I'm hoping to see more folks get out and attend koi shows with these low gas prices.
    Hard on Canadians as due to falling oil prices and .25 drop in prime rate our currency is down 20% compared to my last visit. Several of my friends have sold properties in Florida.
    Wonder how long it will last. Larry might be able to give us his opinion as he knows oil as well as koi
    Regards
    Eugene

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    • #3

      Eugene, sorry to hear the negative consequences of low cost gasoline.

      How long it will go on? Only the Saudi’s know.

      But there are some simple (minded?) observations that might be at least an indication. First off, in business market share it a big deal (a few percent of a trillion dollars is worth considering). I read that the Saudi’s produce oil for $4 to $5 per barrel. So at the (right now) unimaginable price of oil selling for $10 a barrel they would be doubling their money (and they are sitting upon stacks they have “saved”). Why would the European’s put pressure on the Saudi’s to raise the price? The European economies are suffering and so low cost energy is good. The sanctions on Russia and Iran aren’t anywhere near as effective as the low oil prices so why would the Europeans or the US object?

      In the US Obama’s approval rating is now over 50% and still climbing and that is in no small part due to the low cost of gasoline. So why would he pressure the Saudi’s to raise the price? The states that suffer are all solid red so from Obama’s perspective “frack ‘em, frack ‘em good". So unless there are some countervailing observations that I am overlooking I would say that when the Saudi's see that their competition has been chastened (maybe a year or more) there is no reason to think they would relent. Rob

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      • #4

        Originally posted by Appliance Guy View Post
        Seeing $1.97 a gallon here. Owning an appliance repair company with four service vehicles I sure am enjoying the low prices. Not sure about the long term prospects and how this will shape up. My infantile understanding is that OPEC is continuing production to snuff out American interests, such as fracking companies. Not sure fracking companies can turn a profit at $47 a barrel. Shooting myself in the foot???

        At any rate, I'm hoping to see more folks get out and attend koi shows with these low gas prices.
        The Saudi interests go far beyond fracking. Their revenues are down because of their increased pumping dropping price below monopolistic optimization. The Saudi perspective focuses much closer to their borders. They are killing Iran's economy through low prices at a time when Iran-backed groups are taking over in Yemen and Iraq, and growing stronger in the smaller gulf states. Iranian influence is growing stronger in every country bordering the Saudis. The Iranian religious leadership has the long term goal of Shiite control of Mecca. Saudia Arabia has to lose independence for that to occur. Iran needs oil prices over $120-140 per barrel to support its budget. Saudi Arabia is doing more to hurt Shiite Iran than any western sanctions could accomplish. Will the tactic work, or will it lead to an explosion of violence aimed directly at the Saudi monarchy? ....we worry over gas prices while the Saudi royal family worries over survival for centuries to come.

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        • #5

          Eugene, Rob, and Mike- you guys are way smarter than I am. I knew I could count on you all to give me a fresh perspective. Thanks-
          Tim

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