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The Global Effects of Falling [Oil Prices] - OPEC tentatively agreed to cut production

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    HefflingHeffling No Pic EverRegistered User regular
    I don't think the spam bot was interested in having a valid discussion on this forum.

    It's like anything though, cheap gas will be bad for suppliers, and good for consumers.

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    KruiteKruite Registered User regular
    milski wrote: »
    Oil prices have far less of an effect on refineries than you are stating, since the profit driver is the difference between oil prices and product prices, not the raw price of oil. US refinery margins have likely been affected mostly by growth in competitive Asian/European refineries and more gently by decreases in oil prices and the upcoming Tier 3 gasoline regulations.

    Also I don't think I'd consider refineries petroleum industry, if only because petroleum engineers don't work at refineries. Hard to know what to call, it, though.

    It's considered the same industry, but it is divided into two categories. Upstream and downstream.

    The problems an engineer faces in each are quite different though

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    MillMill Registered User regular
    Cheap oil is kind of a mixed bag for the US. It's great for consumers and industries that are heavily reliant on it. It terrible for suppliers and there are a fair number of those in the US. I'd economically, short term, cheap oil is beneficial for the US. Long term, I'd argue that cheap gas is bad for the US both economically and security wise because it's harder to move to better sources of energy when people can easily bitch about those sources being more expensive that oil.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Mill wrote: »
    Cheap oil is kind of a mixed bag for the US. It's great for consumers and industries that are heavily reliant on it. It terrible for suppliers and there are a fair number of those in the US. I'd economically, short term, cheap oil is beneficial for the US. Long term, I'd argue that cheap gas is bad for the US both economically and security wise because it's harder to move to better sources of energy when people can easily bitch about those sources being more expensive that oil.

    This. Also you get people being a lot more devil-may-care about their gasoline consumption when it doesn't actually hurt their checkbook in a significant way.

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    tinwhiskerstinwhiskers Registered User regular
    edited November 2015
    Mill wrote: »
    Cheap oil is kind of a mixed bag for the US. It's great for consumers and industries that are heavily reliant on it. It terrible for suppliers and there are a fair number of those in the US. I'd economically, short term, cheap oil is beneficial for the US. Long term, I'd argue that cheap gas is bad for the US both economically and security wise because it's harder to move to better sources of energy when people can easily bitch about those sources being more expensive that oil.

    The big benefit for the US is that lower oil/gas prices are basically a huge stimulus for consumer spending. A year of 1c of lower gas prices is between one and one and a half billion dollars in stimulus for the economy. I had a long commute most of the last year and a half. And the difference between $2 gas and $3 gas for me was an extra $20 a week in my pocket. It's like I got a $1000 bonus or tax refund just because. And with stagnant wages being such a drag on the recovery, anything that gives a wide base of people more disposable income is good.



    tinwhiskers on
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    MillMill Registered User regular
    The problem, is we'll eventually hit a point where the impacts of climate change will have some real and negative impacts on the economy. I'm willing to bet those consequences will mostly erase any gains that people see from cheap oil. Plus, it's probably reasonable to say most of the people benefiting from the cheap gas now, that actually need financial help, are probably going to still have shit income when climate change hammers the economy. Hell, I'd argue we're already starting to see some of the negative aspects that are going to screw the average American over.

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    VeeveeVeevee WisconsinRegistered User regular
    Now would be the best time to add another 50 cents or so to the gas tax over the course of the next year. An extra penny a week to the price wouldn't be noticed, but of course something sensible like that could never happen because people are the worst.

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    ScooterScooter Registered User regular
    I'm...pretty sure people would notice an extra 50 cents a gallon in taxes in a single year. And I'm not convinced that the path to climate control is by making things more expensive when the people most effected can't afford to switch to alternatives anyways. That'd be about $260 a year in extra taxes for me, which would be enough to put actual stress on some people but it's not going to match the cost of going out and buying a new hybrid or something.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    edited December 2015
    OPEC is meeting in Vienna today, and while crude had been creeping up a bit based on rumors that the Saudis were going to propose a production cut, it looks like that was a bit premature. If anything, production will ramp up with Iran's inclusion in the market after sanctions are lifted. Prices are responding predictably, and we're back in the <$40/barrel range for WTI.

    Venezuela and Nigeria can not be happy with this.

    joshofalltrades on
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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    Scooter wrote: »
    I'm...pretty sure people would notice an extra 50 cents a gallon in taxes in a single year. And I'm not convinced that the path to climate control is by making things more expensive when the people most effected can't afford to switch to alternatives anyways. That'd be about $260 a year in extra taxes for me, which would be enough to put actual stress on some people but it's not going to match the cost of going out and buying a new hybrid or something.

    Gas prices naturally fluctuate by more than that amount anyway, and this year's peak is > 50c lower than last years peak. You can't rely on cheap gas to survive
    http://www.gasbuddy.com/Charts

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    RchanenRchanen Registered User regular
    OPEC is meeting in Vienna today, and while crude had been creeping up a bit based on rumors that the Saudis were going to propose a production cut, it looks like that was a bit premature. If anything, production will ramp up with Iran's inclusion in the market after sanctions are lifted. Prices are responding predictably, and we're back in the <$40/barrel range for WTI.

    Venezuela and Nigeria can not be happy with this.

    Especially Venezuela.

    BBC report on their economy.


    I heard that the only country with worse stats is Syria. And that is because there are no stats for Syria.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Let's get some perspective on how cheap oil is right now:

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    XaquinXaquin Right behind you!Registered User regular
    I'm down with it

    I can afford to drive to get my son every other weekend and get him some ice cream or whatever.

    instead of wondering if I'll have enough gas to make it home.

    (mass transit is sadly not an option)

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    We hit a 10-year low today. <$35/barrel oil is insane.

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    tinwhiskerstinwhiskers Registered User regular
    THANKS OBAMA

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    XaquinXaquin Right behind you!Registered User regular
    We hit a 10-year low today. <$35/barrel oil is insane.

    weird

    all the places around me went up between a dime and a quarter yesterday

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    Knuckle DraggerKnuckle Dragger Explosive Ovine Disposal Registered User regular
    Xaquin wrote: »
    We hit a 10-year low today. <$35/barrel oil is insane.

    weird

    all the places around me went up between a dime and a quarter yesterday

    No gas station attendant ever broke his hip rushing to lower prices.

    Let not any one pacify his conscience by the delusion that he can do no harm if he takes no part, and forms no opinion.

    - John Stuart Mill
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    DaimarDaimar A Million Feet Tall of Awesome Registered User regular
    They've got to use up all the expensive gas in the tanks before lowering prices, but as soon as global oil prices go up the price at the pump goes up as well.

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    JepheryJephery Registered User regular
    }
    "Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Yeah we dipped below $30/barrel today. OPEC member nations are calling for an emergency meeting, but I don't know how likely that is.

    Luckily America has a diversified economy, but other nations are getting fucking hammered. Seems like the Chinese economy in particular is driving the prices further down.

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    shrykeshryke Member of the Beast Registered User regular
    Joy. I wonder what this will do to Canada and Harper's attempt at our own oil oligarchy.

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    SealSeal Registered User regular
    The world narrowly averts a future dominated by tyrannical Canucks.

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    FeralFeral MEMETICHARIZARD interior crocodile alligator ⇔ ǝɹʇɐǝɥʇ ǝᴉʌoɯ ʇǝloɹʌǝɥɔ ɐ ǝʌᴉɹp ᴉRegistered User regular
    Someday, my energy ETFs will rebound

    someday

    every person who doesn't like an acquired taste always seems to think everyone who likes it is faking it. it should be an official fallacy.

    the "no true scotch man" fallacy.
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    Disco11Disco11 Registered User regular
    shryke wrote: »
    Joy. I wonder what this will do to Canada and Harper's attempt at our own oil oligarchy.

    Here in Oilberta, things are not going great. The falling house prices at the same time as people are pulling equity out of their homes is going to put the hurt on folks in the next few months as E.I. is running out.

    PSN: Canadian_llama
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    Mr KhanMr Khan Not Everyone WAHHHRegistered User regular
    Oil prices should be a lagging indicator, so i never quite understood why the market would act bearish purely because of oil.

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    JepheryJephery Registered User regular
    edited January 2016
    Mr Khan wrote: »
    Oil prices should be a lagging indicator, so i never quite understood why the market would act bearish purely because of oil.

    It might be an indicator of weak growth in China and other countries (India IIRC) with manipulated gdp data. Which is the big fear right now.

    Jephery on
    }
    "Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
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    tinwhiskerstinwhiskers Registered User regular
    Mr Khan wrote: »
    Oil prices should be a lagging indicator, so i never quite understood why the market would act bearish purely because of oil.

    Its more that oil prices are down so far because of a bunch of other bad things for the global economy-a lot of that being China.

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    MillMill Registered User regular
    Even though the market is rather irrational on a number of things, there is some sound logic here. We haven't hit the point where oil is considered a terrible alternative for what it's currently used for, aka if the demand for oil is down, that is an indication that the global economy is taking some hits.

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    HefflingHeffling No Pic EverRegistered User regular
    The price of oil being so low now, despite being an absolutely necessary commodity, just shows how much the price of oil is manipulated.

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    tbloxhamtbloxham Registered User regular
    Heffling wrote: »
    The price of oil being so low now, despite being an absolutely necessary commodity, just shows how much the price of oil is manipulated.

    Yeah, low prices of oil simply reveal that with technological improvement oil isn't scarce at all. Running out isn't the problem. Stopping using it when there is loads left is.

    "That is cool" - Abraham Lincoln
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    DisruptedCapitalistDisruptedCapitalist I swear! Registered User regular
    It just blows my mind that Saudi Arabia has been up to these shenanigans for over 50 years and they still aren't anywhere even close to running out of oil.

    Accoding to wiki they're still sitting on 268 billion barrels. Not even the other OPEC members can compete with that (except Venezuela, which is weird considering they are complaining about SA even though they have more oil reserves. Something to do with capacity I suppose.)

    "Simple, real stupidity beats artificial intelligence every time." -Mustrum Ridcully in Terry Pratchett's Hogfather p. 142 (HarperPrism 1996)
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    EncEnc A Fool with Compassion Pronouns: He, Him, HisRegistered User regular
    tbloxham wrote: »
    Heffling wrote: »
    The price of oil being so low now, despite being an absolutely necessary commodity, just shows how much the price of oil is manipulated.

    Yeah, low prices of oil simply reveal that with technological improvement oil isn't scarce at all. Running out isn't the problem. Stopping using it when there is loads left is.

    Aaaand you went too far. Even if there were an infinite supply there are plenty of reasons to stop using Oil.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    It just blows my mind that Saudi Arabia has been up to these shenanigans for over 50 years and they still aren't anywhere even close to running out of oil.

    Accoding to wiki they're still sitting on 268 billion barrels. Not even the other OPEC members can compete with that (except Venezuela, which is weird considering they are complaining about SA even though they have more oil reserves. Something to do with capacity I suppose.)

    Break even points are not the same. Venezuela is upset because they are selling at a loss; it literally costs them more to take it out of the ground than they get for selling it. And since their economy depends upon oil revenue...

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    KruiteKruite Registered User regular
    It just blows my mind that Saudi Arabia has been up to these shenanigans for over 50 years and they still aren't anywhere even close to running out of oil.

    Accoding to wiki they're still sitting on 268 billion barrels. Not even the other OPEC members can compete with that (except Venezuela, which is weird considering they are complaining about SA even though they have more oil reserves. Something to do with capacity I suppose.)

    Break even points are not the same. Venezuela is upset because they are selling at a loss; it literally costs them more to take it out of the ground than they get for selling it. And since their economy depends upon oil revenue...

    Venezuela produces a more dense crude with contents that make water removal more expensive and cracking a necessity in processing it to various products; that is why it's more expensive.

    I've been told that some of their wells have oil more dense than water.

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    DisruptedCapitalistDisruptedCapitalist I swear! Registered User regular
    Aha. Thanks. I think I heard that before.

    "Simple, real stupidity beats artificial intelligence every time." -Mustrum Ridcully in Terry Pratchett's Hogfather p. 142 (HarperPrism 1996)
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    DynagripDynagrip Break me a million hearts HoustonRegistered User, ClubPA regular
    imma get laid off at some point.

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    milskimilski Poyo! Registered User regular
    Venezuelan oil is unpleasant to refine

    I ate an engineer
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    tinwhiskerstinwhiskers Registered User regular
    edited January 2016
    It is both. PDVSA has basically been bloated with incompetent Chavez managerial appointees and have had an excessive amount of their revenue shunted into various ill conceived social programs. In 2002 they had 39k employees, and fired 19k of them for political reasons-most of them experienced professionals. Last year they employed 145k. They have deferred so much maintenance that the equipment fails a lot. Their output has fallen every year since 2008.

    Their break even point now is probably $50-$60 a barrel. Which we aren't likely to see for a while here.

    tinwhiskers on
    6ylyzxlir2dz.png
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    themightypuckthemightypuck MontanaRegistered User regular
    It is both. PDVSA has basically been bloated with incompetent Chavez managerial appointees and have had an excessive amount of their revenue shunted into various ill conceived social programs. In 2002 they had 39k, and fired 19k of them for political reasons-most of them experienced professionals. Last year they employed 145k. They have deferred so much maintenance that the equipment fails a lot. Their output has fallen every year since 2008.

    Their break even point now is probably $50-$60 a barrel. Which we aren't likely to see for a while here.

    Wow. That's right up there with fracking.

    “Reject your sense of injury and the injury itself disappears.”
    ― Marcus Aurelius

    Path of Exile: themightypuck
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    themightypuckthemightypuck MontanaRegistered User regular
    Dynagrip wrote: »
    imma get laid off at some point.

    Well, if you are a chem or geology expert working in oil, you probably made enough money in the last decade to take a year or two off.

    “Reject your sense of injury and the injury itself disappears.”
    ― Marcus Aurelius

    Path of Exile: themightypuck
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