Don M.
SF VIP
- Location
- central Missouri
We have all been pleasantly surprised at the falling prices at the gas pumps in recent weeks. However, this is a Very Complex issue, and has Global implications. The US and Canadian oil companies have nearly made North America "energy independent", and that has put a severe strain on some other nations economies....particularly places like Venezuela and Russia. OPEC has cooperated by Not reducing its output, and is letting the markets dictate the prices...for now. The first effects are already being seen, as some of the more expensive processes, like fracking, shale, and the oil sands are beginning to pull back, as they are not profitable at less than $60 a barrel. Almost 5% of the North American wells and operations have shut down in the past month, as these marginally profitable operations come under stress. I would imagine most of these operations are being Mothballed, and can be quickly brought back if prices rise a bit.
Meanwhile, Venezuela is in serious trouble, and the people of that nation are seeing inflation rise as high as 60%, as their oil dependent economy is quickly collapsing. Russia is going through real pain as their oil exports are being hit hard. The Ruble has nearly collapsed, and Putin is coming under a lot of pressure. The world needs to watch this closely, as Putin is just crazy enough to try to lash out with some military action to hold on to his position.
The next few months will be interesting as this global market tries to find its balance. Hopefully, we will see oil settle down at around $70 a barrel, which will allow some decent "wiggle room" for nearly all suppliers, and result in pump prices, here, to settle in the $2.50 a gallon range...which would be quite acceptable to most.
People have been switching to more fuel efficient cars in recent years, and driving less...which has helped tremendously, but there has been a recent uptick in large SUV sales, so some people seem to have a short memory.
EPA mandates for fuel mileage, in the future, will change the types of vehicles we drive. This, and a good long term outlook for oil supplies, should keep prices low for quite some time. Plus, rapidly accelerating technology advances in things like solar energy may finally put us on a path whereby we can begin to reduce some of the pollutants in our atmosphere that are creating so many Climate Change issues.
Overall, these events are, to me, one of the more optimistic things that have occurred recently.
Meanwhile, Venezuela is in serious trouble, and the people of that nation are seeing inflation rise as high as 60%, as their oil dependent economy is quickly collapsing. Russia is going through real pain as their oil exports are being hit hard. The Ruble has nearly collapsed, and Putin is coming under a lot of pressure. The world needs to watch this closely, as Putin is just crazy enough to try to lash out with some military action to hold on to his position.
The next few months will be interesting as this global market tries to find its balance. Hopefully, we will see oil settle down at around $70 a barrel, which will allow some decent "wiggle room" for nearly all suppliers, and result in pump prices, here, to settle in the $2.50 a gallon range...which would be quite acceptable to most.
People have been switching to more fuel efficient cars in recent years, and driving less...which has helped tremendously, but there has been a recent uptick in large SUV sales, so some people seem to have a short memory.
EPA mandates for fuel mileage, in the future, will change the types of vehicles we drive. This, and a good long term outlook for oil supplies, should keep prices low for quite some time. Plus, rapidly accelerating technology advances in things like solar energy may finally put us on a path whereby we can begin to reduce some of the pollutants in our atmosphere that are creating so many Climate Change issues.
Overall, these events are, to me, one of the more optimistic things that have occurred recently.
