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Obligatory "gas is falling" thread

Rick C
November 14th, 2005, 07:42 PM
We had the obligatory "gas is rising, blame oil companies" thread a few months ago and I just filled up the Durango and noticed prices are 22% lower than they were at that time so I thought I'd see how high a "gas is falling, congratulate oil companies" thread would fly.

Back then, I believe I quoted gas at $1.04 a litre in south Calgary and tonight it was 81.4, down roughly 22%.

I can't believe they fixed the prices lower!!! :sorry: :highfive: :grouphug: :angel:

Rick C
www.goldentales.ca

BMDLuver
November 14th, 2005, 07:46 PM
Thank goodness, gas prices were crippling the rescue transport efforts. Hurray for lower prices! :thumbs up

Joey.E.CockersMommy
November 14th, 2005, 07:54 PM
Its 97.5 here in the Okanagan. I think they go down a bit, but never down to what they were before. Its like it was 87. something before it went up and then it goes up 1.10 down to 97.5. But then it will probably go up to 1.12 then back down to 1.02.

Rick C
November 14th, 2005, 08:21 PM
I think they go down a bit, but never down to what they were before.

Before when?

I'm pretty sure 81.4 cents is lower than, say, six months ago but maybe not lower than six years ago.

Or maybe I just picked off a gas war today. . . . . the trend looks to be lower oil prices though. Oil and gas inventory numbers are coming out next week and all are expected to be higher . . . . which points to lower prices.

Rick C
www.goldentales.ca

Prin
November 14th, 2005, 09:11 PM
We have had 89.9 for a while now. I was going to start a thread about it, but I haven't had the chance. We can't be complaining and then when we get something good, pretend it's just supposed to be that way, right? I'm glad gas is cheaper. I hope it doesn't stop the little cars from coming over here from Europe though...

Puppyluv
November 14th, 2005, 09:47 PM
The gas station around the corner from me is 87.7 a mere two months ago, it was 134.4, so about a 35% decrease (My goodness, we can get over 1.5 litres for every litre we could get in september :D) Now I just need to get a car to put all of that cheap gas into....

Rick C
November 14th, 2005, 11:16 PM
I guess Mrs. C and myself gambling on buying two vehicles with V-8 hemi's last month is starting to look a little better . . . . . watch SUV sales takeoff again!!

People are so shallow. :highfive: :clown:

Rick C
www.goldentales.ca

Prin
November 14th, 2005, 11:33 PM
Oh, I hope people aren't dumb enough to think this gas price decrease will last forever and go out and buy suvs.. (No offense, Rick :o )

Rick C
November 15th, 2005, 08:58 AM
Oh, I hope people aren't dumb enough to think this gas price decrease will last forever and go out and buy suvs.. (No offense, Rick :o )

You would have made some money betting against inflation-adjusted long term higher commodity prices in the last 50 years. . . . . . . even now, the price of oil is significantly lower than it was in 1974 adjusted for inflation.

A famous wager:

http://www.overpopulation.com/faq/People/julian_simon.html

You're at a bit of a spike in oil prices right at the moment but the probable direction, long haul, will be lower in inflation-adjusted terms as markets adjust to the new variables of India and China and both those massively inefficient users begin to apply technology to industry and new sources of production come on line.

Regarding SUV's, there seems to be a price point for fuel where it modifies behaviour . . . . the recent spike upward seemed to influence spending habits while the recent spike downward, provided its accompanied by suitable forecasts to continue, would probably do the opposite.

The funny thing is, I didn't really notice the price of gas had actually been falling until yesterday . . . . I just assumed the gas tank on my new Durango was smaller than the old one!! :cool:

Rick C
www.goldentales.ca

Rottielover
November 15th, 2005, 09:39 AM
Just filled up today, and it was 87.4...OMG keep falling please, Miss all my ontario visits

Dog Mom
November 15th, 2005, 09:55 AM
the gas here hasn't fallen much it's still $ 1.07/L :sad:

Schwinn
November 15th, 2005, 10:01 AM
I fill up the RED RANGER about twice a month. It's now my commuter to the GO train. I did wake up yesterday on the bus and look out the window and saw 79.9 cents. I thought maybe I was still dreaming...

I'm not about to give the oil companies a big slap on the back for bringing prices back down to "reasonable" levels, which I still think is too high. When I was in the gym, I was watching the ticker on CNN, and I noticed two things when they were interviewing some oil exec. 1)the oil companies are reporting record profits, and 2)the price of oil has gone up about 22% and the price of gas has increased about 46% (by my memory, anyway). Also, in July, I was paying less for gas, and just last week, oil hit a four month low. Hmmm...doesn't compute.

Also, on my way home from the train station, I passed two stations across from each other at 79.9, then 10 minutes down the road, another one at 86.9. This morning, the 86.9 was the same, but the other two stations were at 88.9. Why? Oh, wait, the other two are right before the 404, where the commuters go by on the way to work. But that can't be it, there must have been a 11% increase in oil overnight. Yea, that's it.

Joey.E.CockersMommy
November 15th, 2005, 10:06 AM
Kelowna and Vernon are down a bit to 97.7 but still a bit high in my mind. I am going to hold off on buying that hummer still for a bit. :D

Rick C
November 15th, 2005, 10:29 AM
Also, on my way home from the train station, I passed two stations across from each other at 79.9, then 10 minutes down the road, another one at 86.9. This morning, the 86.9 was the same, but the other two stations were at 88.9. Why? Oh, wait, the other two are right before the 404, where the commuters go by on the way to work. But that can't be it, there must have been a 11% increase in oil overnight. Yea, that's it.

Yet they were 79.9 on the 404 freeway the day before. Why? :highfive:

Don't get too paranoid.

I have no problem at all with oil companies making mammoth profits . . . . it's been amply demonstrated from the example of the 1970's that governments artificially controlling prices leads to long term shortages as it stifles investment and innovation. Right now, everyone is out drilling like mad, announcing oilsands expansion to produce as much as they can or, in the case of Saudi Arabia, wondering if they have enough drilling rigs on hand to put as many straws in the ground as they want . . . . . and prices are beginning to come down a bit as people start to think about future supply issues.

Its only about five years ago that we saw the front page of The Economist magazine out of London wondering about $5 oil.

Rick C
www.goldentales.ca

Schwinn
November 15th, 2005, 10:48 AM
Yet they were 79.9 on the 404 freeway the day before. Why? :highfive:



Because it was at night. When people are on thier way home, they are a little less concerned about filling up. Also, when I pass them, it's 7:30 pm, after the rush hour. Talking with my wife, the gas at night rush hour used to match the morning rush hour (when she wasn't on mat leave). But during the day, it dropped by 5-9 cents/L. That's not paranoia, it's fact. :highfive: Every day, those stations by the highway go up by about 8 cents/L over night.

I'd probably be less critical if we weren't fed all the BS about no price fixing, and that it's the price of oil driving the gas prices, and if they just admitted the truth, the screw us because they can. For example, people are less worried about getting home late because they ran out of gas then they are about getting to work late. That's the other reason the price is usually higher in the morning. They put the screws to the public any chance they get, then they sit on thier ever increasing profits going, "Who? Me? Not our fault gas prices are so high."

mafiaprincess
November 15th, 2005, 11:12 AM
Was 82.0 in Woodbridge last night.

Rick C
November 15th, 2005, 11:19 AM
Because it was at night. When people are on thier way home, they are a little less concerned about filling up. Also, when I pass them, it's 7:30 pm, after the rush hour. Talking with my wife, the gas at night rush hour used to match the morning rush hour (when she wasn't on mat leave). But during the day, it dropped by 5-9 cents/L. That's not paranoia, it's fact. :highfive: Every day, those stations by the highway go up by about 8 cents/L over night.

That's pretty simple: From an Ontario Government document on-line:

Why do gasoline prices seem to change even within the same day?

Since last summer, gasoline retailers, especially in the Toronto area, have been raising their prices around midnight each night to restore their margins from that day's price wars. As a result, pricing cycles have been compressed into one day, with prices high in the morning and declining over the course of the day as competition drives them down. One benefit for consumers is that they have the opportunity to buy gasoline at discounted prices every day if they time their purchases appropriately rather than every few days, as was previously the case.

http://www.energy.gov.on.ca/index.cfm?fuseaction=oilandgas.faqs&subtopic=gaspricing

That's free enterprise and I have no problem with it frankly. You're perfectly free to alter your behaviour and fill up towards evening at a reduced price. If you're paying more, that's your problem. Do something about it if you don't like it.

I'd probably be less critical if we weren't fed all the BS about no price fixing, and that it's the price of oil driving the gas prices,

You have a hard time making a convincing argument about price fixing when the price of crude increases astronomically on PUBLICLY TRADED MARKETS due to global supply conditions and the price of gas increases in the same vein ON PUBLICLY TRADED MARKETS, helped, without doubt, by the fact no new refinery capacity has been added in the USA in 20 years. Then we see oil falling 18.5% (from $70 to $57) and gasoline 22% (from $1.04 to $.81.4) . . . . . . and today remains cheaper per gallon on an inflation adjusted basis than it did in 1974.

I don't want to be in the business of defending big oil but really, if you don't like it, go out and buy some oil and gas shares . . . . . but, they've been getting killed in the last month too. :sorry:

Rick C
www.goldentales.ca

Schwinn
November 15th, 2005, 12:51 PM
But, if you listen to the rhetoric from the gas companies, it does not happen that way. That is where I take issue, as anyone who pays attention can see that it does. Secondly, the government says there is no price fixing or callusion on the parts of the gas companies, then says they won't lower taxes, because the difference will be eaten up by gas companies raising thier prices and increasing thier profits. Uh, that's price fixing.

As for arguing successfully arguing price fixing, it's actually pretty easy. I don't have the stats at hand, but it was reported that the increase in oil prices was approximately 22%, while the increase in gas prices was about 43% (The numbers are probably off, but it works out to about double). Therefore, the arguement that it's all about the price of crude doesn't wash.

Do something about it? I'd love to. I'd love to find a job close to home. However, I'm stuck in either downsizing and moving to Toronto, since a family home is triple compared to my area, or finding a job close to home, which hasn't worked out. Plus, my spouse has a career that, at this point in time, is fifteen minutes from her house. At this point, not feasible to move to accomadate less driving because she'd be driving the other way. And I do purchase at different times, doesn't make it any less frustrating when we're being told that what we're seeing isn't happening.

By stocks, shares and mutual funds? Love to, except all my extra cash is going towards buying gas for my cars.

My main point of frustration is that we are being fed a lot of rhetoric that just doesn't wash. What's that quote? "Don't pee on my leg and tell me it's raining?"

I guess the second source of frustration is on point of view. In a lot of areas, it is very difficult to live without using gas. So, that being said, though I am a capitalist at heart, maybe it's time to put some sort of regulation on gas prices. I keep hearing the other arguement that we don't complain about paying a buck and a half for Coke or water, but I find that a moot point as well. First of all, I don't need Coke or bottled water to live day to day (ie. get to work). Secondly, if I was buying Coke or bottled water 50 L or more at a time, I wouldn't be paying $1.50/L (when I worked at the bar, it worked out to something like $.20/L). So, since it is arguable required for us to drive, since most have no viable alternatives, maybe it's time there were regulations, or give us viable choices. I'd love to buy a hybrid, but I can't afford the $10-15 000 premium on those.

Every study that wasn't done by the government or oil companies state that something is out of whack. Because I'm at work, I haven't been able to locate the latest one, though.

Or, maybe what it really boils down to is that because I'm in this crappy place making a pittance, and I haven't been able to get the job I want, yet, I'm just jealous because I can't afford to drive the F-150 I want, or the Magnum with the hemi. :sad:

Prin
November 15th, 2005, 05:53 PM
We jinxed it. It just went up to 97.9 here...:(

Rick C
November 16th, 2005, 09:02 AM
[QUOTE=Schwinn]But, if you listen to the rhetoric from the gas companies, it does not happen that way.

Why are you listening to rhetoric in the first place? Clap your hands over your ears and start to hum like I do.

That is where I take issue, as anyone who pays attention can see that it does. Secondly, the government says there is no price fixing or callusion on the parts of the gas companies, then says they won't lower taxes, because the difference will be eaten up by gas companies raising thier prices and increasing thier profits. Uh, that's price fixing.

Un no, that would be prices gravitating towards the point where the market will support it according to the actions of millions of consumers. Filling a vacuum. You'll buy it until it hurts, which then causes you to change your behaviour. In the last six months, SUV sales in Canada fell 50% . . . . yet gas prices in North America would still need to rise more than 100% to match those in many European countries, the difference being mostly taxation.

As for arguing successfully arguing price fixing, it's actually pretty easy. I don't have the stats at hand, but it was reported that the increase in oil prices was approximately 22%, while the increase in gas prices was about 43% (The numbers are probably off, but it works out to about double). Therefore, the arguement that it's all about the price of crude doesn't wash.

Au contraire . . . . oil is one market and gas is another. Simply producing oil doesn't make it into gas and when hurricanes run over already over-stressed refineries then existing gas supplies become more valuable, hence the price differential. That's easy. As I said before, there hasn't been a new refinery built in America in 20 years. Is it any wonder, gas is getting tight?

Do something about it? I'd love to.

I meant you can buy in the evening instead of joining the rest of the suckers buying in the morning. That's all. Change a behaviour. Screw big oil. Do something about it. You have the power in that instance.

My main point of frustration is that we are being fed a lot of rhetoric that just doesn't wash. What's that quote? "Don't pee on my leg and tell me it's raining?"

Again, I don't want to be in the position of defending Big Oil but I can clearly see how markets function and conspiracy theories usually don't add up. . . . .

If you want to go to the area of price fixing it might be more appropriate to say that OPEC "controls" the price of oil and tries to position it in a market range.

During the OPEC Oil Embargo of 1973-74, OPEC discovered that it was not only killing America but also themselves . . . . and ever since then they've been careful to keep the price of oil in a range which is economically viable for thirsty western economies but also discouraging to alternative sources of energy and innovation. The recent price spike has probably taught them that the acceptable range needed be between $20 and $30 a barrel, but more likely between $40 and $50.

I guess the second source of frustration is on point of view. In a lot of areas, it is very difficult to live without using gas. So, that being said, though I am a capitalist at heart, maybe it's time to put some sort of regulation on gas prices.

The argument most often used AGAINST government price fixing or government intervention in ANY industry is that of fixing oil prices by various governments, including the USA, in the early 1970's through to the mid-1980's. The clear result of those price fixing measures over a full decade was a stfling of domestic oil and gas production as initiative and investment was choked. And prices rose artificially as a result.

A recent paper on this topic . . . . only a month old.

http://www.cato.org/pubs/gasoline_price_controls.pdf

Its been amply demonstrated that price fixing - particularly in the area of oil and gas - doesn't work to the benefit of consumers in the long run.

Or, maybe what it really boils down to is that because I'm in this crappy place making a pittance, and I haven't been able to get the job I want, yet, I'm just jealous because I can't afford to drive the F-150 I want, or the Magnum with the hemi. :sad

Keep plugging away . . . . dreams come true!!!

Rick C
www.goldentales.ca

Schwinn
November 16th, 2005, 10:44 AM
I think in some ways, we are saying the same thing. Supply and demand sets the price. The more cynical of us (that'd be me) would say, "We screw you because we can".

I realize the irony in what I'm about to say, but if we would get straight answers from the source (the gas companies and the government), I'd probably be a LOT less frustrated and angry. For example, Petro-Canada was one company that said, "This isn't anything we are doing, it's because of the price of oil". They started to put those little stickers that showed the percentage of profit per litre. It was at 1%. It has gone to 2, 3, then (I think there is a pattern here;) ) 4%. A buddy of mine saw one the other day that said 5%. So, obviously, we ARE dealing with increased profit margins.

Secondly, the price of diesel surpassing gas makes no sense (again, listening to the gas companies). Diesel is unrefined gas. That's like going into a store, and being offered bottle water for $1, or a glass of dirty water out of the creek for $1.25.

At the end of the day, I don't even really care anymore who's fibbing, or why, I just know that the consumer is getting it in the end. That, and I'm a cranky, cranky man lately. (HEY YOU KIDS!! GET OFF MY LAWN)

Rick C
October 29th, 2007, 08:54 AM
Just for incendiary amusement, I thought I would resurrect one of these myriad threads and observe that gasoline seems to be one of the only products that is reasonably and immediately reflecting the USA/Canada dollar relationship.

As we complain about retailers not lowering prices in the face of the rise in the Canadian dollar, we also see oil topping $90 USA a barrel, an all-time high, but gasoline prices, generally, in the 94 cent area per litre, actually the same or lower than they were two years ago in this thread when oil was in the mid-$60 range.

This for a commodity where consumers generally suspect price fixing.

Sorry, couldn't resist.

Rick C
www.goldentales.ca

rainbow
October 29th, 2007, 04:52 PM
The last I heard it cost the oil companies about $10 per barrel to extract it from the Alberta oilsands and alot cheaper than that ($3 ??) in Saudi Arabia. The oil companies are making mega profits now.

Rick C
October 30th, 2007, 09:28 AM
The last I heard it cost the oil companies about $10 per barrel to extract it from the Alberta oilsands and alot cheaper than that ($3 ??) in Saudi Arabia. The oil companies are making mega profits now.

That would depend on the currency you denominate it and where you are extracting it from.

Only about 7% of global oil supplies are given free rein to companies like Exxon Mobil.

Conversely, about 65% of global oil supplies are controlled by state-owned oil companies. Public, not private.

It costs significantly more to produce a barrel of oil from the Athabasca sands than it does from Saudi Arabia. The cost of production at Athabasca would depend on how long a company has had infrastructure in place given the skyrocketing costs of building new layers of production. If you've been around a long time like Suncor you're doing alright. If you're newer to the game like Husky, its going to be a lot higher.

On the issue of profits, if denominated in USA dollars, obviously its a big "wow" factor. Good. Oil companies should make profits.

If denominated in Canadian dollars, the strongest currency in the world right now, you can cut the numbers significantly, particularly for companies investing in Oil sands infrastructure right now . . . . . which is why the stock prices of things like Suncor, Canadian Natural, Husky, etc are only marginal higher in the last two years . . . . . interestingly reflecting pretty much the price of gasoline in Canadian dollars.

Its interesting that two-thirds of production is controlled by state oil companies though given they are notoriously inefficient. Mexico's oil industry is collapsing because they have little private sector involvement. Venezuela's will collapse under government nepotism, a failure to reinvest, instead diverting profits elsewhere in the local economy or to the foreign adventurism of Hugo Chavez.

Rick C
www.goldentales.ca