Oil Prices Drop Due to Demand Concerns

[herbicide]

My Way Finance

I have to agree that demand is dropping.

My anecdotal evidence is I spent a long Memorial Day Weekend at the Lake of the Ozarks. There were much less boats on the water, perhaps 1/2 the amount of years past. The condo we stayed in was only 60% full, and the reports were that most condos/hotels were at about 50% full. Normally Memorial Weekend is the busiest (or 2nd to 4th of July).

This has two impacts: Less gas used to get to the lake, and less gas guzzling boats on the water. The most efficient motorboats get MPG that makes your Hummer or Expedition look like a Prius in comparison.

[Wesley]

Even casino gambling is down.

[Go2Guy]

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My anecdotal evidence is I spent a long Memorial Day Weekend at the Lake of the Ozarks. There were much less boats on the water, perhaps 1/2 the amount of years past. .

I can only imagine the gas costs for recreational craft like boats, RV's etc.

I follow the interesting debates about the rising price of crude: Boone Pickens says it's because of dwindling reserves; Others blame speculation by traders on the NYMX; then there's the camp that blames the falling value of the $$dollar since all crude is priced in USD; and finally there's the camp that blames limited refinery capacity to create more gasoline.

BTW - United Airlines lost $500 Million clams in the first three months of 2008. Jet fuel is killing the airlines and they seem slow in pass the prices on to consumers.

[herbicide]

I follow the interesting debates about the rising price of crude: Boone Pickens says it's because of dwindling reserves; Others blame speculation by traders on the NYMX; then there's the camp that blames the falling value of the $$dollar since all crude is priced in USD; and finally there's the camp that blames limited refinery capacity to create more gasoline.

Its all three, Boone Pickens = speculation. From what I have read, its not so much that reserves are dwindling (google Bakken, for instance) it is more of the fact that recovery (drilling production) hasn't been able to keep up with the increased demand (Namely India and China)

[pulse]

I almost bought a boat with twin 350s in it a couple of years ago. Held 200 gallons of gas. Don't regret not buying it now..

[gogagig]

The differences in global prices is what I dont understand. Parts of Europe pay 9 dollars a gallon. Five years ago, the price per gallon in India was double what it was in the United States. Today, the price per gallon in the United States is a few cents more than that in India. Demand in a country like India has gone up tremendously, yet the price has not changed as much as it has in the U.S. American demand has grown at a slower rate, but gas price has increased three times.

[pulse]

The differences in global prices is what I dont understand. Parts of Europe pay 9 dollars a gallon. Five years ago, the price per gallon in India was double what it was in the United States. Today, the price per gallon in the United States is a few cents more than that in India. Demand in a country like India has gone up tremendously, yet the price has not changed as much as it has in the U.S. American demand has grown at a slower rate, but gas price has increased three times.

Europe has higher taxes on gas.

Exxon and Mobil merged....

[herbicide]

The differences in global prices is what I dont understand. Parts of Europe pay 9 dollars a gallon. Five years ago, the price per gallon in India was double what it was in the United States. Today, the price per gallon in the United States is a few cents more than that in India. Demand in a country like India has gone up tremendously, yet the price has not changed as much as it has in the U.S. American demand has grown at a slower rate, but gas price has increased three times.

The answer to the European question is mainly taxes and refining capacity.

Not sure what the answer is for India. Perhaps they have increased refining capacity.

[cytech]

I believe I read somewhere that India and China both subsidized gas prices.

[alaskaguy]

The price of gasoline has been $4.29 per gallon in this area since we got our last fuel barge last summer.

In three weeks we get a fuel barge. The most reliable estimates are that the price of gasoline will jump to $6.10 per gallon once the barge lands (and fuel oil will increase to $5.50 per gallon).

Once we receive a fuel barge the new price will hold for twelve months. In an upward trending market, holding the price constant works in our favor, but obviously the reverse would be the case if prices started trending downward.

[CycloneDaddy]

It is a good thing that snowmobiles don't take a lot of gas at $6.10 a gallon. If it gets much higher you will have to tame a couple of those elk/moose that like to sleep on your front porch and ride them to work

[Go2Guy]

Its all three, Boone Pickens = speculation. From what I have read, its not so much that reserves are dwindling (google Bakken, for instance) it is more of the fact that recovery (drilling production) hasn't been able to keep up with the increased demand (Namely India and China)

Yes and that would make a lot of sense particularly when you hear about the reserves of the Canadian Oil Sands (2nd only to Saudi) and the estimates of Oil Shale in the Rockies.

But Boone Pickens was on CNBC this week and was adamant about dwindling reserves, not the falling dollar, or speculation by traders.

[alaskaguy]

It is a good thing that snowmobiles don't take a lot of gas at $6.10 a gallon. If it gets much higher you will have to tame a couple of those elk/moose that like to sleep on your front porch and ride them to work

There are no elk this far north.

Reindeer work best for hauling people around.

[CycloneDaddy]

I wonder why Boone Pickens was on tv talking about dwindling reserves ... he must want to throw another $100 million towards OSU. If you look at what his holdings are then you would know why he wants the cost of oil to go up. I did hear he has a book coming out soon telling us what needs to be done to lower oil prices though, good for himl

[alaskaguy]

My Way Finance

I have to agree that demand is dropping.

My anecdotal evidence is I spent a long Memorial Day Weekend at the Lake of the Ozarks. There were much less boats on the water, perhaps 1/2 the amount of years past. The condo we stayed in was only 60% full, and the reports were that most condos/hotels were at about 50% full. Normally Memorial Weekend is the busiest (or 2nd to 4th of July).

This has two impacts: Less gas used to get to the lake, and less gas guzzling boats on the water. The most efficient motorboats get MPG that makes your Hummer or Expedition look like a Prius in comparison.

Eleven Billion Fewer Vehicle Miles Traveled in March 2008 Over Previous March

Link:
Americans Driving At Historic Lows