$7/gallon gas is coming

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Was mentioned several times upthread, the investments to expand production are uneconomical to companies like Shell. It would take either some sort of regulation or incentive by US gov for these companies to expand production.

That is not true production is expanding and is extremely profitable at current price points. The problem, as it were, is more that companies are not convinced that this price spike isn't just temporary. Investments in production capacity take at least a year to start seeing a return. They are holding back because of how hard many companies got hit by debt issues from 2018-2020 and not having a clear idea where the price of oil will be a year from now. Investors want financial discipline and dividends over growth. The market will take some time to adjust but it will. The oil guys also want a pat on the head and a belly rub

That's how the oil industry has always worked. Certain wells are always profitable, as the prices rise, other sources like shale and deeper water become profitable, as the price falls, those rigs are taken off line.

Of course, it's basic economics. I'm just pushing back on the assertion that increasing production is uneconomical.

Increasing production is uneconomical for the companies for all the reasons mention by the poster at 15:54

That's not what that poster was saying. The poster was explaining why the industry isnt jumping and immediately expanding production.

The breakeven price for most shale is, conservatively, $60. Prices greater than $70 are economical. The issue is whether $75+ prices will be sustained over the medium term.

That's what makes it uneconomical. Huge capital expenditure upfront with zero guarantees of being able to recover that investment or turn a profit long term. Also, OPEC countries can increase production and choke shale producers. They'd have to get some guarantees from the Government.

No. Shale doesn't require the level of capex traditional production did. The tradeoff is that wells are shorter lived and the breakeven price is higher. Conventional production has a much lower breakeven point but requires a lot more capex. OPEC has been around for decades. We've been through this before.

I dont know which is worse the drill baby drill capitalists demanding socialism or the stop oil production now environmentalists complaining about prices.

I think you’re not placing enough weight on the short lived nature of shale wells. If your production is running off at 25-40% per year, you can only do two of the three following things: 1) pay back debt, 2) return capital to investors, 3) reinvest to try to keep production flat.

All the meanwhile your very own shale production is depressing prices. Break even on shale is much higher than people believed even two years ago. Even worse, the break even probably can’t be achieved if shale oil is being produced.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Was mentioned several times upthread, the investments to expand production are uneconomical to companies like Shell. It would take either some sort of regulation or incentive by US gov for these companies to expand production.

That is not true production is expanding and is extremely profitable at current price points. The problem, as it were, is more that companies are not convinced that this price spike isn't just temporary. Investments in production capacity take at least a year to start seeing a return. They are holding back because of how hard many companies got hit by debt issues from 2018-2020 and not having a clear idea where the price of oil will be a year from now. Investors want financial discipline and dividends over growth. The market will take some time to adjust but it will. The oil guys also want a pat on the head and a belly rub

That's how the oil industry has always worked. Certain wells are always profitable, as the prices rise, other sources like shale and deeper water become profitable, as the price falls, those rigs are taken off line.

Of course, it's basic economics. I'm just pushing back on the assertion that increasing production is uneconomical.

Increasing production is uneconomical for the companies for all the reasons mention by the poster at 15:54

That's not what that poster was saying. The poster was explaining why the industry isnt jumping and immediately expanding production.

The breakeven price for most shale is, conservatively, $60. Prices greater than $70 are economical. The issue is whether $75+ prices will be sustained over the medium term.

That's what makes it uneconomical. Huge capital expenditure upfront with zero guarantees of being able to recover that investment or turn a profit long term. Also, OPEC countries can increase production and choke shale producers. They'd have to get some guarantees from the Government.

No. Shale doesn't require the level of capex traditional production did. The tradeoff is that wells are shorter lived and the breakeven price is higher. Conventional production has a much lower breakeven point but requires a lot more capex. OPEC has been around for decades. We've been through this before.

I dont know which is worse the drill baby drill capitalists demanding socialism or the stop oil production now environmentalists complaining about prices.

It does not matter that it is not as capital intensive as traditional production, it is still very capital intensive. The wells only last one year and you have to keep drilling new ones.

Also, there was massive bankruptcy of shale producers a few years back due to OPEC increasing production to run them out of business. I am sure shale producers are very trigger shy as are investors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everything Democrats touches, turns shit. Good luck paying high gas , food, rent, and household goods America.

All of those items are global commodities. The prices are up worldwide. Democrats are not responsible for the greed of global corporations.

Which might be somewhat true to a limited extent.


But it doesn’t matter. Voters - especially independents - will blame dems. And that’s awesome.


You dems actually have people convinced you WANT them paying $7/gallon for gas.

Bravo!


Can’t wait ‘til November

Republicans actually lie and distort the truth just to win elections! You can’t wait for bullies and liars to be elected? Look at this whole thread how dishonest everyone is blaming Biden for everything. So transparent.

Turnabout is fair play, hon.

Dems would be burning Trump in effigy (again) if gas prices were this high during his term, whether it was his doing or not.

Shoe’s on the other foot now.

Sucks, huh?


Hahaha!!!!!


Hope it stays over $10 all the way through the election. “Elections have consequences” - remember Obama saying that? Well, now it’s the dems and low information voters to get what they voted for.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everything Democrats touches, turns shit. Good luck paying high gas , food, rent, and household goods America.

All of those items are global commodities. The prices are up worldwide. Democrats are not responsible for the greed of global corporations.

Which might be somewhat true to a limited extent.


But it doesn’t matter. Voters - especially independents - will blame dems. And that’s awesome.


You dems actually have people convinced you WANT them paying $7/gallon for gas.

Bravo!


Can’t wait ‘til November

Republicans actually lie and distort the truth just to win elections! You can’t wait for bullies and liars to be elected? Look at this whole thread how dishonest everyone is blaming Biden for everything. So transparent.

Turnabout is fair play, hon.

Dems would be burning Trump in effigy (again) if gas prices were this high during his term, whether it was his doing or not.

Shoe’s on the other foot now.

Sucks, huh?


Hahaha!!!!!


Hope it stays over $10 all the way through the election. “Elections have consequences” - remember Obama saying that? Well, now it’s the dems and low information voters to get what they voted for.

You are vile. Trump helped create this situation with Putin and you know it Komrad. Trump is personably responsible for the deaths of innocent Ukranian citizens. The blood is on his hands and Putin's.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everything Democrats touches, turns shit. Good luck paying high gas , food, rent, and household goods America.

All of those items are global commodities. The prices are up worldwide. Democrats are not responsible for the greed of global corporations.

Which might be somewhat true to a limited extent.


But it doesn’t matter. Voters - especially independents - will blame dems. And that’s awesome.


You dems actually have people convinced you WANT them paying $7/gallon for gas.

Bravo!


Can’t wait ‘til November

Republicans actually lie and distort the truth just to win elections! You can’t wait for bullies and liars to be elected? Look at this whole thread how dishonest everyone is blaming Biden for everything. So transparent.

Turnabout is fair play, hon.

Dems would be burning Trump in effigy (again) if gas prices were this high during his term, whether it was his doing or not.

Shoe’s on the other foot now.

Sucks, huh?


Hahaha!!!!!


Hope it stays over $10 all the way through the election. “Elections have consequences” - remember Obama saying that? Well, now it’s the dems and low information voters to get what they voted for.

A Trumpkin is calling others low information? That’s right, projecting is all they are capable of.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everything Democrats touches, turns shit. Good luck paying high gas , food, rent, and household goods America.

All of those items are global commodities. The prices are up worldwide. Democrats are not responsible for the greed of global corporations.

Which might be somewhat true to a limited extent.


But it doesn’t matter. Voters - especially independents - will blame dems. And that’s awesome.


You dems actually have people convinced you WANT them paying $7/gallon for gas.

Bravo!


Can’t wait ‘til November

Republicans actually lie and distort the truth just to win elections! You can’t wait for bullies and liars to be elected? Look at this whole thread how dishonest everyone is blaming Biden for everything. So transparent.

Turnabout is fair play, hon.

Dems would be burning Trump in effigy (again) if gas prices were this high during his term, whether it was his doing or not.

Shoe’s on the other foot now.

Sucks, huh?


Hahaha!!!!!


Hope it stays over $10 all the way through the election. “Elections have consequences” - remember Obama saying that? Well, now it’s the dems and low information voters to get what they voted for.

You are vile. Trump helped create this situation with Putin and you know it Komrad. Trump is personably responsible for the deaths of innocent Ukranian citizens. The blood is on his hands and Putin's.

Putin didn’t do squat in Ukraine when Trump was in office. Even idiots barely paying attention know this. You dems can’t lie and spin your way out of this one.

Further, middle class people - REAL middle class earners, not the “our HI is $600k we’re middle class” DCUM middle class - they see dems saying that high gas prices are a GOOD thing because it will force them to buy a new ($40k+!) EV. They think dems WANT them paying $8 a gallon to fill up mom’s 2002 Honda Odyssey.

The damage that you libs have done to your party is EPIC.


Bravo!!!!!

[Anonymous]

Gas should be expensive and more expensive until people stop using it.

If you cannot afford an EV, you have public transit.

I am not interested in allowing flyover yahoos to ruin our environment for future generations.

[Anonymous]

Anonymous wrote:Gas should be expensive and more expensive until people stop using it.

If you cannot afford an EV, you have public transit.

I am not interested in allowing flyover yahoos to ruin our environment for future generations.

Please keep saying stuff like this. Demand that every democrat running for office include something like this in every campaign speech they make.

Please! PLEASE!!!!!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

About a dozen or so pages back I was lectured for pointing out the problem here, but I’ll try again:

1. Drilling for oil is a technically complex operation. You’re trying to extract a molecule thousands of feet beneath the surface of the earth. You’re drilling into asymmetric geological formations. Those formations will determine the success of your venture. You can’t actually put your eyes on the molecule until it is extracted. There is a reason why Petroleum engineers are amongst the best paid on the planet.

2. Drilling for oil is a capital intensive business. Most of your costs are upfront before you start to collect revenue. The economics on any particular well are typically based on 30+ years of production from that well. Investing in a new well is inherently a very long term commitment.

3. Even under ideal circumstances, assuming you have a lease to drill on, first planning to first production takes about 180 days. Typically, it is much longer. Presently, it would be even longer due to labor and supply shortages.

4. EVEN BEFORE COVID, the oil business in North America was going through a historic reorganization with record bankruptcies filed. COVID further supercharged the process. Numerous big time investors flat out declared they would never invest in the space again. Politicians all over the globe have stated a desire to phase out oil sometime between 2030 to 2050.

5. EVEN BEFORE RUSSIA ATTACKED UKRAINE, the price of oil was steadily marching upward as demand was outstripping market forecasts. Just like COVID accelerated what was already a badly declining price environment, Russia’s actions accelerated what was a badly increasing price environment.

Now, a bunch of politicians who as recently as three weeks ago were openly cheering on/trying to legislate the end of the oil industry, have a SHORT term problem. They want oil companies to deploy expensive LONG term solutions to solve the problem. I don’t know what the solution is and there are probably a thousand more wrinkles to this problem I’ve left out from this post.

Still doesn’t mean the windfall should be paid out to shareholders rather than invested in more efficient energy sources or somehow used to soften the price increases on consumers. The message to consumers is that the companies and the shareholder are happy with inflation. They making out like robber barons at their consumers’ expense.

Less than 2 years the price of WTI crude went negative. That means that in order to avoid shutting wells in, producers were having to pay someone to take the crude off their hands. There are good times and bad times in the oil patch and on average they provide a reasonable return on investment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Gas should be expensive and more expensive until people stop using it.

If you cannot afford an EV, you have public transit.

I am not interested in allowing flyover yahoos to ruin our environment for future generations.

Please keep saying stuff like this. Demand that every democrat running for office include something like this in every campaign speech they make.

Please! PLEASE!!!!!!

Yeah, stupidest post ever.

So how is a person in the suburbs or rural area supposed to use public transport if there is none. Also how is that teacher who makes 30k a year supposed to afford a 50k EV? So basically your kids in their rural school district will be missing their teacher since he/she can’t afford gas, and EV and has no Lou Loc option. Let’s add that grocery clerk, nurse, librarian, trash collector, restaurant cool, etc…. Good luck with society if all these people can’t get to work.

[Anonymous]

Remember that gas prices are driven by international prices. Europe is likely to move much faster toward electrification. It’s likely to get there quicker for commercial, larger buildings and vehicles as it did for cell coverage and adoption. Individual homes will be a challenge in areas with very old homes and old electrical. When Europe moves off oil, it will lessen demand lowering international prices.

If Russia remains a pariah bogged down in a protracted battle with its neighbors, it’s oil will only be sold to China Eck China will get it cheap but it will also take China out of the buyers market for non pariah oil.

Oil prices are likely to be volatile for awhile.

[Anonymous]

Oohhhh, we're halfway there, oh, oh - eighty dollar gas bill!!

[Anonymous]

Inflation hits 7.9%. Biden is Jimmy Carter part deux.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Gas should be expensive and more expensive until people stop using it.

If you cannot afford an EV, you have public transit.

I am not interested in allowing flyover yahoos to ruin our environment for future generations.

Please keep saying stuff like this. Demand that every democrat running for office include something like this in every campaign speech they make.

Please! PLEASE!!!!!!

Yeah, stupidest post ever.

So how is a person in the suburbs or rural area supposed to use public transport if there is none. Also how is that teacher who makes 30k a year supposed to afford a 50k EV? So basically your kids in their rural school district will be missing their teacher since he/she can’t afford gas, and EV and has no Lou Loc option. Let’s add that grocery clerk, nurse, librarian, trash collector, restaurant cool, etc…. Good luck with society if all these people can’t get to work.

How? It’s impossible.

But it’s pure gold that libs are saying stuff like this. Because that 30k teacher being told she needs to buy a $50k EV is going to have a come-to-Jesus moment this November. So is everyone else not “DCUM middle class”.

[Anonymous]

Wow, the stupidity of most people on this thread is staggering. From the "It's Biden's fault" to "It's Trump's fault" to "let them eat cake/buy EVs"...

Practically none of you are looking good, right now.

Expensive gas hits food prices the worst, but all consumer prices will increase significantly. It's not any American President's fault. They're not mind-readers. Obviously, since people are stupid, they will punish whoever is in office when prices spike.