Tag Archives: oil prices

Gas-price skid causes nervousness

So-called “experts” on energy prices and policies keep telling us the same thing.

The downward spiral in oil and gasoline prices is going to continue perhaps well into the new year.

But watching the price ticking down — often more than once daily — continues to make me nervous.

The price of unleaded gas has now dipped to less than $2 per gallon in Amarillo. I work part time across the street from a leading gas dealer here and I’ve seen the sign tick down as many as three times during a single day.

How low will it go?

The experts aren’t saying yet how cheap they think gas will get.

Supply is up. Demand is down. American drillers keep producing oil like there’s no tomorrow. But everyone knows how free-market economics works: If the supply keeps outstripping demand, eventually the suppliers will scale back their production to even out the inventory of oil and gasoline on the market. The result inevitably increases the price of gas a the pump.

As we’ve all seen for the past several years, gasoline increases in price at a far quicker pace than it decreases.

Hey, I’m not predicting gloom and doom at the pump.

I’m merely suggesting that I’m getting quite used to paying the same amount for gas that I was paying five years ago or longer.

The “new normal” in gas prices had produced a certain form of numbness to the prices we were paying. Now that new normal has been shaken — but in a positive sort of way.

It still makes me nervous about what could be coming down the road.

 

Declining oil prices bad for economy?

Economics isn’t my specialty. Indeed, I don’t have any specialties.

I’m trying to understand why some economists now think the declining price of oil and the concurrent drop in gasoline prices is somehow bad for the recovering U.S. economy.

http://www.msn.com/en-us/money/other/is-dollar40-oil-coming/ar-BBgNjHn

Does anyone else remember when crude prices were skyrocketing from, say, $40 per barrel to more than $100? The stock market went bonkers. Investment accounts were drained of billions of dollars.

However, the oil industry made a gigantic comeback. NPR this morning did a story from West Texas detailing how pump jacks that once stood like dinosaurs have jumped back to life and are pulling out of the ground.

A lot of other factors have contributed to the nation’s economic rebound.

Moreover, a lot of factors are contributing to the glut of oil that’s driving its price downward.

Now we hear that the economic recovery might be jeopardized by the plunge in oil prices.

The oil boom might fizzle out at the production end, but what about the increase in disposable income for motorists who aren’t pouring as much money into their fuel tanks?

Will they be able to spend more of that income on other essential — and non-essential — items?

Economics can be a complicated issue. This oil price up-down cycle has me confused.

 

Wait for it: Obama to get blame for oil prices

A recent blog I posted wondered how President Obama could get so much blame when oil prices were skyrocketing and so little credit now that they’re plummeting.

https://highplainsblogger.com/2014/12/11/presidents-get-the-blame-not-the-credit/

The Dow Jones Industrial Average fell more than 300 points today, reportedly over concerns about those falling oil prices that are producing dramatic declines in the price of gasoline at the pump.

A USA Today headline suggested this week that the oil price decline threatens the U.S. economic recovery that’s now under way.

http://www.msn.com/en-us/money/markets/dow-drops-more-than-300-as-oil-continues-to-plunge/ar-BBgGViU

Then it came to me.

Obama’s critics now have a hook on which to hang blame on the president.

They just might start harping about those declining prices, which are a result of too much supply and too little demand. They can gripe that the price decline is harming the recovery, which of course had nothing at all to do — in the minds of the critics — with Obama’s economic stimulus package enacted shortly after he became president.

So if they’re going to insist on blaming the president for every single bad thing that happens in the world, they can turn to the declining oil prices as one more sign of a “failed presidency.”

 

Presidents get the blame, not the credit

It doesn’t matter one little bit which party is in power, presidents of the United States become sitting ducks for snipers looking for someone to blame when times get tough.

Take the price of gasoline.

Flash back to 2012. President Obama was getting pounded, pilloried and plastered by his foes because gas prices were spiking. Republican challengers to Obama were quite quick to lay all the blame on him for being unable to control the price of fossil fuel and, thus, the price of gas at the pump.

Fast forward to today. The price of gas is falling. Crude oil is selling for about $68 per barrel, down about $40 from where it was two years ago. Is the president getting any credit for that? Hardly. Does he deserve credit? Not as much as he thinks he should get.

But neither did he deserve the brickbats that were being tossed his way.

The 44th president isn’t the first one to take hits unfairly. He won’t be the last.

We’re all just so darn fickle that we cannot bring much balance to the give and take, the ebb and flow of good times and bad.

 

Majority has caught up

Hey, what’s going on here? I’ve long considered myself to be among a distinct minority of Americans refusing to climb onto the gloom-doom bandwagon.

Now it turns out we comprise a majority of Americans who think the country is heading in the right direction.

http://www.cnn.com/2014/11/28/politics/poll-national-mood-economy/index.html

A CNN/ORC poll says most Americans think the nation is trending correctly. It’s just a 52 percent majority, but according to CNN.com, the poll reflects the most positive outlook since 2007, the year just prior to the financial collapse.

As CNN reports: “And it marks consistent improvement in the mood of the nation over the past few months, despite a series of national security crises and continued gridlock in Washington. In September, 50 percent of respondents said things were going well.”

The falling price of oil, heating oil and gasoline is putting more money in people’s pockets, which is a good thing as the Christmas shopping season commences. Gasoline today in Amarillo is about $2.41 per gallon of regular unleaded. And OPEC announced today it would not cut production, which is going to continue to put downward pressure on oil prices as supply continues to outstrip demand.

Will any of this stop the naysayer and goofball critics from trumping up crises where they don’t exist? Oh, probably not.

I’ll just keep going about my business, acknowledging that the nation remains strong, with a positive outlook despite the yammering of those looking for political advantage.

 

 

 

Gas prices to drop? Where?

The headline from The Associated Press caught my eye online today right after I noticed that gasoline prices in Amarillo had spiked 17 cents per gallon overnight.

The AP story tells of how gas prices might fall below $3 per gallon by year’s end.

So help me God Almighty, the roller-coaster ride that gas prices take makes me want to hold on with both hands.

http://bigstory.ap.org/article/2c0f0dde26a5468587b4976af7818573/gas-prices-falling-headed-below-3-much-us

Our gas prices had been falling steadily over the course of the past month. They hit $3.02 per gallon of unleaded gas — until last night.

Then the prices shot back up in the biggest overnight spike I’d seen in some time: 17 cents.

Now we hear about further declines? In “some parts of the country”? Gas prices will fall below $3 per gallon?

This is the new normal, friends.

Back when it gas hit the then-unheard of price of $3 per gallon, oil experts were talking about $5 gasoline. One of the was none other than the legendary Texas Panhandle oilman Boone Pickens. He was among those predicting very expensive gas. It hasn’t happened.

Now it appears the price is going the other way.

AP reports that fall is a time when prices usually decline. Refiners switch to cheaper grades of oil. Lately, though, we’ve seen greater automotive fuel efficiency, more alterative energy production and conservation at many levels. All of this results in greater supply as demand declines.

The global price decline is a different matter. AP reports: “The drop in global crude oil prices is a surprise. Despite increasing violence and turmoil in the Middle East, the world’s most important oil-producing region, the global price of oil has fallen to $97 a barrel, close to its lowest level in more than two years.”

Maybe the overnight spike in the heart of Oil Country is an aberration. Let’s hope so, OK?