Gas Prices

[txab]

$2.99 today  going up........................

 

Wonder if the Admin will figure out a way to produce oil the same way the print money. Out of thin air

 

Already burned through half of SPR

[KARNUT]

There’re going to burn through our reserves. No worries, what could go wrong?

[Grumpy Bear]

Could stop selling gasoline outside the USA. 

[customboss]

9 hours ago, diyer2 said:

On the news last night, OPEC is going to cut oil production by 2 million barrels a day.

https://www.washingtonpost.com/business/2022/10/05/opec-plus-oil-cut-russia-saudi-arabia/

 

USA hasn’t learned anything since 1973. Oil industry in US doesn’t provide USA with any backup for US consumers. They are making a killing selling exports. So OPEC is gonna stiff the world to line their pockets before a real recession hits and demand drops. 

[KARNUT]

It was figured out briefly. Here in the recent past. 

[KARNUT]

Drove through town to my farthest walking spot 9 miles each way in the Avalanche. 3.09 is now the lowest now, saw 3.25 today. I filled it last week for 2.75 it’s going up at a clip now. I’ll probably be back up to a 50$ fill up in the CRV next week. Looks like I’ll be back to the closest walking  park only by next week. 

[CamGTP]

Diesel prices spiked between 40-70 cents over the past few days.

 

Was down to $4.50ish and now today it's $5.15-5.19 at nearly every single station in the 50 mile metro.

[KARNUT]

Gas prices around are trending down around here. 2.99 is more common now. 

[txab]

$3.04

[JimCost2014]

Over $6.00 again in some areas around Seattle. 

[7milesout]

$3.179 a gallon, Atlanta Metro south.  I did a bit of an experiment.  My ATV towed on my utility trailer, with the gate folded flat forward, so the only drag was the ATV.  Only 1,500 lbs towed.  65 mph cruise (out of a responsible abundance of caution) to an off-road riding area.  It's 125 miles away but worth it.  

 

The truck averaged 17.5 mpg there and back (~250 miles).  I thought that was decent if not better than decent.  Towed like a dream.  No complaints.

[CamGTP]

Once station is town is at $3.65 a gallon, the rest are at $3.79 still. Go away from city and in the rural area and it's 20 cents less a gallon in some places. The few towns that are still doing the gas price battle as we like to call it are way way lower.

 

One town has every station at roughly $3.10 a gallon and the other town was all the way down to $2.96 a gallon. Just goes to you show you that those station will sell it at that amount of money while still making the minimum state requirement for fuel sales. The places that are 60-80 cents higher are just taking in record profits even if they never say it.

[customboss]

Want to get the big picture read this FORTUNE article. This is not political its an overview of how well the US is doing and how bad others have miscalculated. 

 

Link here but copy and pasted below for ease:  https://fortune.com/2022/10/21/biden-energy-policy-oil-prices-misinformation/

 

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COMMENTARY ·U.S. ENERGY POLICY

Ignore the analysts’ misinformation oil slick: Biden is making real progress on energy

BYJEFFREY SONNENFELD AND STEVEN TIAN

October 21, 2022 at 3:48 PM MDT

President Biden delivers remarks on energy as Secretary of Energy Jennifer Granholm listens during an event at the White House October 19, 2022. Biden spoke on American energy independence and announced the release of 15 million barrels of oil from the U.S. strategic reserve.

ALEX WONG—GETTY IMAGES

 

 

 

 

Texas congressman and House Speaker Sam Rayburn famously quipped, “Any jackass can kick down a barn, but it takes a skilled carpenter to build one.” That analogy which is especially apt when evaluating recent energy policies from the Biden administration, including the generally skeptical reaction from industry analysts to President Biden’s most recent speech on oil markets this week.  

 

 

That reaction shows that energy analysts have slipped on their own oil slick of misinformation. It is always easy for cynical but conflicted industry analysts and commentators to lob politicized beanbags at the administration’s decisions. Sure, the White House may have had ups and downs with some mistakes early on—as well as poor messaging on energy solutions. But listening to these biased industry complaints has increasingly become a tale of two realities. 

The prevailing narrative presented by most energy analysts is that of a dire and dystopian global oil “supply shock” outlook. They portray the administration as largely rudderless on energy challenges, politicizing releases of the fast-dwindling strategic petroleum reserves (SPR) to put a band-aid on lowering prices before the midterm elections, unable to tackle supply challenges. They further fault the administration for simultaneously offending the second- and third-largest oil producers, Saudi Arabia and Russia, amidst drastic OPEC+ production cuts and the European Union’s sixth sanctions package to ban Russian oil in December. And they accuse the White House of murdering U.S. energy independence by launching an ESG crusade against oil, blocking pipelines, cutting federal leases and threatening energy companies’ access to capital and the outlook for long-term demand. 

But this dystopic vision is grounded in misleading information. Perhaps these energy analysts would be wise to redirect their fire from President Biden and target their skepticism towards the duplicitous Saudi-Russian OPEC+ cartel instead. These biased analysts, who projected that oil would be $400/barrel by now instead of the current $84/barrel, do not acknowledge certain key realities, including: 

* The U.S. is now the world’s largest oil producer and needs almost no Saudi oil; as the U.S. has already cut its imports of Saudi oil by over 90% over the last decade to a mere 356,000 barrels a day.

* The U.S. owned Aramco but recklessly gave it to the Saudis when President Nixon and Henry Kissinger panicked in the 1970s.

* Gasoline prices should have fallen recently to match the decline in crude oil, but refineries are enjoying a soaring windfall, with profits quadrupling from 2021 levels. Refiners have added $30 a barrel in refining margins on top of the price of crude—even though 1 million barrels per day in refining capacity was added in 2022 with more coming in 2023. That’s not counting the return of hundreds of thousands of barrels of capacity which was taken offline due to idiosyncratic outages and disruptions the last couple months due to refinery mismanagement. 

* The billions of dollars oil producers lost in 2020 was not due to Biden, who had not been elected yet, but due to COVID-related economic shutdowns.

* Federal leases under Biden far exceed those under Trump—with 3,557 permits for oil and gas drilling on public lands in Biden’s first year, far outpacing the Trump Administration’s first year total of 2,658, with record numbers of unused leases. That’s the case even though all federal leases combined account for less than 20% of all U.S. oil and gas production. 

* The U.S. already provides more gas to the EU than Russia did at its peak, and now the EU buys 80% less from Russia than they did before Russia’s attack on Ukraine.

* The recent Saudi/OPEC price hike was not justified by oil markets as producers were already making 80% profit margins. Only the inefficient oil producer Russia, with break-even production costs twice that of Saudi Arabia, needed these price hikes, to fuel its war. 

* U.S. SPR releases are not political. Every modern president has authorized significant SPR releases, including Donald Trump—who likewise faced attacks from self-serving industry voices. Furthermore countries like Saudi and China maintain their own sizable strategic petroleum reserves from which they released ample supplies at least until this year.

* Biden’s new policy of replenishing the SPR through futures contracts, taking advantage of backward-dated futures markets where oil is hovering cheaply around $70 a barrel, locks in hefty profits for domestic oil producers for years to come—which Riyadh refused to do.

Similarly, contrary to Vladimir Putin propaganda that Western sanctions will lead to energy supply shocks, it is in fact Putin who is willingly withholding both oil and gas supplies. The U.S. Treasury Department has proactively put forward the price cap scheme explicitly to stave off a supply shock come Dec. 5, when further EU sanctions kick in, ensuring Russian oil continues flowing to global markets while simultaneously limiting Putin’s revenue.

Any decision by Putin to withhold oil supply after Dec. 5 the way he is withholding gas supply from Europe would be a catastrophic, unforced mistake. He will likely have to reverse himself, much the same way he is now begging Europe to buy more Russian gas after months of blackmail. 

And to the great chagrin of many environmental advocates, Biden has been laying the groundwork for a gradual transition to clean energy, not the overnight transformation that boogeyman industry critics have been urging him to make. His speech this week explicitly called for an increase in domestic oil and gas production as well as much-needed permitting reform to expedite the construction of energy infrastructure, particularly gas pipelines which can be converted to green hydrogen pipelines over time. 

Perhaps it is even more surprising that many analysts retain any market credibility at all, considering the number of missed calls by many analysts the last year alone. Among them.

* Some denied that OPEC+ was going to have an unscheduled October surprise with a production cutback of 2 million barrels.

* Many believed Saudi propaganda that the kingdom had no spare capacity, when in fact the Saudis are 33% off production levels from two years prior, while refusing to release SPR inventory.
 
* These experts believed Riyadh’s pleas that a production cut was needed to maintain profitability, never appreciating that U.S. technology enables the Saudis to extract oil as far less than half the cost of Russian oil, with low break-evens of ~$22 a barrel.

* They forgot to figure in the massively higher shipping costs for getting Russian oil to Asia, buying into Putin’s “pivot to Asia” mythology. They likewise wrongly believed that gas was fungible and that Putin could pivot from selling piped gas to Europe to China—though he does not have the needed pipelines.

* Many, including JP Morgan, said oil by now would cost $380/barrel

* They underestimated the speed of liquified natural gas (LNG) to backfill for Russian gas to the EU (the U.S. now sells more gas to the EU than Russia did at its peak in February). Fully 86% of Russian gas went to the EU but the EU didn’t need it as much as Putin needed to sell it to them.

* They didn’t imagine that Germany could construct six massive LNG conversion plants in record time to supplement existing 150 bcm of re-gasification capacity. 

Evidently, when it comes to energy industry analysts, sometimes the emperor is naked—with these conflicted experts too close to their own biased industry sources, repeatedly mistakenly falling for Saudi and Russian misinformation. Riyadh no longer even bothers to disguise its blatant manipulation of industry analysts. Recently the Saudi oil minister publicly, mercilessly berated a Reuters reporter and banned Reuters from OPEC+ meetings while showering favored analysts he deemed “kind friends” with extensive access during the most recent OPEC+ press conference. No wonder that with so many industry experts on the Saudi payroll or reliant on access to Saudi sources, experts shudder in fear at the thought of crossing Riyadh. 

Transcending the industry analysts parroting the heavy-handed misinformation of the Saudi-Russia OPEC+ alliance, U.S. energy policy is quite promising—neither giving industry a blank check nor folding to Saudi blackmail like lawn furniture. If only some industry analysts could get beyond the groupthink that greases their paths.

Jeffrey Sonnenfeld is the Lester Crown Professor in Management Practice and Senior Associate Dean at Yale School of Management. Steven Tian is the director of research at the Yale Chief Executive Leadership Institute.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

 

Edited October 27, 2022 by customboss
Remove pic of Brandon

[KARNUT]

Ok, back to the real world. In my travels around town I’m now seeing 2.91 at some stations. 

[7milesout]

1 hour ago, KARNUT said:

Ok, back to the real world. 

 

Agreed.