Gas Prices

Don M.

Don M.

SF VIP
Location
central Missouri
Gas prices have been unusually high, for this time of year....well over $1/gal, above the annual averages. Now the government has announced a large release from the Strategic Reserves, which may help in the short term, but could lead to OPEC cutting back production, as a response. Then, many refineries have either shut down, or reduced production. New drilling, pipelines and fracking, etc., have slowed down, or stopped.

I fully expect prices to continue at these levels, or even rise further in the future. For those who still have to work, and commute daily by car, these transportation costs will continue to impact their finances.
 

Cutting back on the supply as you point out will most likely do as you say. Short term lower pricing, just how low to make a dent in the cost to travel to work & back is a toss up. I wouldn't want to travel like I did during my years working. Retired has cut driving but the high cost of fuel impacts delivering goods so on one hand less expense to travel but higher goods cost. :sneaky:
 
Not sure it will help any. If that 50m barrels were to magically appear tomorrow in the pipeline, the crude oil inventory would finally be back to normal. If it were to magically be refined, then gasoline inventory would be back to normal, yet the crude inventory would be below normal.

Gasoline consumption is normal for this time of year (compared to 2019), the refiners are operating at seasonal normal, also 2019. Domestic crude oil production is down about 1.2M barrels per day from same time 2019. The output is increasing, but likely not until late 2022 and there is really no incentive to speed up the process. If you're making $10 per unit profit, would you invest another dollar now to get back to $10 profit down the road?

Consumption must fall, to get prices down, imo. Everything is a seller's market at this point.
 

I had to pay $3.39 per gallon this morning. I can't afford not to drive as I need my car to get to work and everywhere else. One of my favorite gas stations is closed and has been for days now and I don't know why? The weather is getting really cold which means more gas is used just warming up the car before I actually go anywhere. This hurts.
 
They are "Trying" to force everyone to get electric cars. but then your electric bill will go sky-high. I wish I had my Prius back. it got 55 to 58 mpg. Going the speed limit or slightly above it.
 
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IMO the token use of the strategic oil reserve is more about raising the President’s approval rating than solving the problem of high energy costs.

Prices will come down when demand comes down.

I believe that inflation will continue as the government pumps money into the economy and continues to approve massive spending bills without a tax base sufficient to fund them.

I believe that we need to start increasing interest rates to cool inflation and slow demand. That move could also spook the stock market, pop the housing bubble, impact unemployment, etc...

Tough choices that none of our leaders seem willing to consider.
 
Aunt Bea said:
I believe that we need to start increasing interest rates to cool inflation and slow demand. That move could also spook the stock market, pop the housing bubble, impact unemployment, etc...
Click to expand...
That would be like trying to pull the table cloth off the table, without upending the house of cards you've built on top!
 
Aunt Bea said:
IMO the token use of the strategic oil reserve is more about raising the President’s approval rating than solving the problem of high energy costs.

Prices will come down when demand comes down.

I believe that inflation will continue as the government pumps money into the economy and continues to approve massive spending bills without a tax base sufficient to fund them.

I believe that we need to start increasing interest rates to cool inflation and slow demand. That move could also spook the stock market, pop the housing bubble, impact unemployment, etc...

Tough choices that none of our leaders seem willing to consider.
Click to expand...
Agreed. With that said, I selfishly don't want the stock market spooked because my retirement funds are there, but I would like to see the housing bubble popped because we have no intention of selling our house and our property taxes keep rising due to the perceived value of our house. ;)
 
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