OT: Oil prices rebound $4, so let's hope it's bottoms-up
- Thread starter JMISASANO
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I retired from corporate life at age 45 …. 12 years ago. Prior to this I had worked in the oil and NG industry.
While working I scraped and saved, living well below my means while living in several undesirable small towns.
During that time I learned all I could mostly on my own about investments and I made investments that did very well.
They eventually let me leave the corporate rat race. Since I left I have managed my own personal investments where until last summer were very overweight in energy stocks.
I made my first investments at age 16 with money I earned from roofing houses in the hot summer time.
But I took control over my own life, if I can anyone can. I live better now… but still live well below my means.
I learned that it pays to know as much as you can about the things you're investing in and talk about…
I know more about the oil and NG industry than anything else.
This post was edited on 2/2 10:38 AM by Soonerheart
This post was edited on 2/2 10:40 AM by Soonerheart
The middle class is always caught between a rock and a hard spot, regardless.
If the price of gasoline maintains between $1.75 to $2.00 range, the middle class will be asked to make-up the gap of tax revenues lost on oil revenues from lower oil prices. Somebody has to pay for it?
I'm not sure people understand two simple words, which are truly bad for any oil supply scenario.
Those two words are "BOOM" and "GLUT".
Boom = rich get richer, while the middle class suffers at the gas lines.
Glut = rich get richer because they buy exposed assets (market share), while the middle class suffers at the tax lines.
The economy needs a happy medium to generate tax revenues and allow the middle class tax relief.
What's that number?
$75 price point with $2.70 gasoline.
Do the middle class in Oklahoma truly think all of the social programs are going to fund themselves?
2 facts the middle class seemed to overlook,which should scare the crap out of them, if they had a financial calculator in their back pocket.
1) Oil prices are cyclical.
2) Taxes aren't as cyclical
Once a tax scheme has been planned and set in stone to offset reduced oil tax revenue, any future oil price fluctuation on the upswing due to higher global demand will result in the higher gasoline prices at the pump, making it hard on the middle class from the other side.
Stuck between a rock and a hard place...
This post was edited on 2/2 11:23 AM by JMISASANO
The idea that someone who wants low gas prices doesn't have control of their life is ridiculous and condescending. The vast majority of the people I talk to love the low gas prices. The only ones who don't work in the oil field
Venezuelans pay 1 penny a gallon for their gasoline and you see how happy they are standing 4 hours in lines at the supermarkets to buy bread and milk. Once they reach the door, they find out that only bread arrived today, so they'll have to return tomorrow to wait in line for another 4 hours, hoping milk will arrive during the day.
I'm shocked to read some don't understand that oil economics co-exists with GDP and social programs.
This isn't about the "haves" and "have nots" of the world.
As long as you don't hear the words "boom" or "glut" coming out of trader analysts, the middle class should simply respect that they aren't seeing unreasonable prices at the pump. I hope that's not condescending as much as it is elementary to those that truly understand the relationship of oil economics, GDP and social programs across the board.
We aren't Venezuela and that comparison is laughable. Anyone that thinks gasoline that is well over $3 per gallon is somehow good for most Americans honestly doesn't understand most Americans. I'll pay a fair price but I don't like being gauged which is exactly what has been happening.
Of course they are. But they're the first to bitch about it when the price goes up. Whether you or your vast majority understand it or not. Your world is surrounded by and dependent on oil. So is my world. It's been this way for 100 years now.
Exactly who is it on this thread who is saying that gasoline
"well over $3 per gallon is somehow good for most Americans?"
Who's asking for gasoline prices "to be well over $3.00"?
Who truly believes that is a good thing for GDP, job creation and long-term interest rates?
But, you can't gloat about paying for gasoline prices at $1.7 without worrying where that journey is going to end and which pocket is going to pay for it. You will pay for it, we will pay for it.
Why keep making Americans vs Americans arguments, which is the same arguments made in Venezuelan, "haves" against the "have nots".
Make arguments about what's good for national job creation, which is the GDP value chain and wealth creation, which is what you are able to keep in the bank.
Reasonable gas rates are good for the economy. Exuberant gas prices are only good for those involved in the oil industry.
As previously explained "Exuberan gas prices" are also bad for those involved in the oil industry.
We see this with the large employment reductions that are just now starting and are mostly middle class working jobs….
Now thousands of these workers and their families are going to need the help of government social services.
We all pay for that too…. I would rather have $2.90 to $3 gasoline in Oklahoma.
This post was edited on 2/2 1:41 PM by Soonerheart
Once again, that's a false statement.
Did you even read the post about "boom" and "glut"?
I guess not, so I can only advise you to educate yourself on the subject because you clearly don't understand it.
Big Oil doesn't drive "boom" environments, that's driven by global supply demand, YOU the consumer.
Once you grasp that you'll be ok comprehending the economics of this industry.
"Big Oil" companies (Exxon, Chevron, Conoco, BP, Shell) don't set global demand for oil consumption. OPEC was formed in the 70's with Saudi and Venezuela to regulate their production vs demand to hedge a price point, they felt was feasible for the industry and their local economies as they are NOCs, national oil companies, not IOCs, international operating companies usually referred to as Big Oil.
Today, Non-OPEC countries have taken the bull by the horn and will out produce OPEC countries because the global demand had to be filled because many OPEC countries are politically in turmoil, so they couldn't fill it. It's obviously a race to the markets and may the best oil supplier win.
OPEC was producing an eyelash more than their forecasted 30M bpd at the end of December. It is expected that Non-OPEC countries will produce 57.8M bpd in 2015.
So...
OPEC = 30M bpd
Non-OPEC = 57.8M bpd
Canada and the U.S. have really driven this uptick in non-OPEC activity.
OPEC is asking non-OPEC nations to reduce production now that they have become the bulk load of the world's oil supply, causing this oil supply glut.
Herein lies the problem...
Non-OPEC countries don't work off joint production quota agreements like OPEC, so they'll just have to let the natural evolution of supply and demand work itself out. Sure, Big Oil will drastically reduce exploration and drilling because the economics don't make that an attractive investment short-term.
So, I hope it is very clear by now one simple fact.
Big Oil doesn't drive "boom" environments because they know the history of "boom" always leads to "glut" shortly thereafter. No exception to that rule. It's always cyclical and that's nothing new to them. But, they have to fill the demand curve as any supplier to any market within any industry.
The ONLY person that can be blamed in this new world of oil supply for high gasoline prices is YOU the consumer driving DEMAND at the pump, YOU the consumer driving DEMAND for petrochemicals, YOU the consumer driving DEMAND for any byproduct of oil manufactured goods around the globe.
Hence those wonderful two words of Supply and Demand.
This post was edited on 2/2 2:12 PM by JMISASANO
Guess that is where we differ. I have little sympathy for all those oil field workers that have been making 100 grand a year for several years now. Hopefully they were smart (doubt it) and saved a lot of that money. Its time for the rest of us to get a break at the gas pump for a while.
They will be low for a while and that's all it will be . Next
time maybe you will be smart enough to dump your investment before the big glut hits
and drives them down again? Then you would be in a position to repurchase oil investments
at much cheaper prices . Do it enough and big enough and you won't ever think too
much about how the price impacts your life even at exuberant prices.
Those workers have family's that suffer right along with
them They are a lot like the rest of society and don't save nearly enough of
the money they make but its all part of the boom bust equation that can be
taken advantage of for those so inclined.
The problem with those that may have another view point on this thread is that so far as I have seen
is that they have a very low comprehension of the world and local Oklahoma economy.
Our national financial and economic literacy rate in our nation is disturbingly low! This thread is a good illustration of it.
We should never be forced to dumb down to those low levels.
Not understanding the states economy well enough is a big part of why OU's stadium project is apparently delayed.
This post was edited on 2/2 1:29 PM by Soonerheart
I'm not into day trading heart. I'm a big believer in dollar cost averaging since I'm only 43 and I've been investing in the stock market since my mid 20's. Again, most Americans aren't in the stock market and struggle to pay bills, etc. All those workers should have been smarter and saved all that money they have been making. Its gonna be hard for a guy making min wage to be willing to pay $3 bucks at the pump so that ole so and so can make 100 grand again.
Hopefully some are smart enough (doubt it too) to put back a bit of money from their gas purchases for the future. Because if you think today's prices is going to hold true.... you thought wrong.
I don't day trade, but when investing in oil and NG stocks I
have found that far better profits can be made than dollar cost averaging by
knowing the industry, its terminology and its history very well. The best money
is not made with the integrated oil company's . dollar cost averaging while
better than some investment tools is
often the lazy man's investment choice . and it can burn you too.
But for you it's probably best to stick with what you know That's
mostly what I do I have a managed brokerage account for the rest.
Oh I know todays prices won't hold for long at all. It will be right back up there within a few months and we'll all be paying over 3 bucks a gallon. Sad thing is they know everyone will just get used to it and not complain after a while.
I really wish our public schools did a better job educating our
kids about finances, investments, economics and methods to become financially
secure in life .. They should have 4 years in High School of this type of
education.
So many schools don't
even try.
That's exactly right but if they are smart they will invest
in a way that would help cushion them against rising cost of anything .. The
people who complain the loudest and most are often the people who least understand the reason for high gasoline cost in the first place .. But that seems true in any situation .
As someone who spent many years in the oil & NG fields we
are often not dealing with the sharpest people in the world They often only
live for the moment . The corporations IMHO also need to better educate their
own workforces on finances too.
Heart you are living in la la land. The vast majority of people don't save and many can't save. Some of its self inflicted and some is because of circumstances beyond their control. Whatever the case, gas prices have been too high for too long. Thats a fact Jack.
I live in Houston. If a young healthy man has to make min in Houston, it's by choice. Jobs are a plenty if they wanted it. I see on every street corner in Houston beggars and panhandlers a block or two away, there are Help Wanted signs.
Maybe you should consider replacing you pick up with a vehicle
that gets better gasoline mileage?
The demand for vehicle that gets great gasoline mileage has dropped ..
You might score a good deal on one right now . Those types of vehicles always
go way up when the price of gasoline goes up. If you did buy one you would be in a
better position to with stand high prices when they come and will have bought one for a lower
cost.
Heart..........I can afford $4 per gallon if it came to it. Thats not the point. Anyways, I couldn't make it without a truck. I haul stuff, etc. You know...work.
Did you even read the below?
It was a crash course.
Once again, that's a false statement.
Did you even read the post about "boom" and "glut"?
I guess not, so I can only advise you to educate yourself on the subject because you clearly don't understand it.
Big Oil doesn't drive "boom" environments, that's driven by global supply demand, YOU the consumer.
Once you grasp that you'll be ok comprehending the economics of this industry.
"Big Oil" companies (Exxon, Chevron, Conoco, BP, Shell) don't set global demand for oil consumption. OPEC was formed in the 70's with Saudi and Venezuela to regulate their production vs demand to hedge a price point, they felt was feasible for the industry and their local economies as they are NOCs, national oil companies, not IOCs, international operating companies usually referred to as Big Oil.
Today, Non-OPEC countries have taken the bull by the horn and will out produce OPEC countries because the global demand had to be filled because many OPEC countries are politically in turmoil, so they couldn't fill it. It's obviously a race to the markets and may the best oil supplier win.
OPEC was producing an eyelash more than their forecasted 30M bpd at the end of December. It is expected that Non-OPEC countries will produce 57.8M bpd in 2015.
So...
OPEC = 30M bpd
Non-OPEC = 57.8M bpd
Canada and the U.S. have really driven this uptick in non-OPEC activity.
OPEC is asking non-OPEC nations to reduce production now that they have become the bulk load of the world's oil supply, causing this oil supply glut.
Herein lies the problem...
Non-OPEC countries don't work off joint production quota agreements like OPEC, so they'll just have to let the natural evolution of supply and demand work itself out. Sure, Big Oil will drastically reduce exploration and drilling because the economics don't make that an attractive investment short-term.
So, I hope it is very clear by now one simple fact.
Big Oil doesn't drive "boom" environments because they know the history of "boom" always leads to "glut" shortly thereafter. No exception to that rule. It's always cyclical and that's nothing new to them. But, they have to fill the demand curve as any supplier to any market within any industry.
The ONLY person that can be blamed in this new world of oil supply for high gasoline prices is YOU the consumer driving DEMAND at the pump, YOU the consumer driving DEMAND for petrochemicals, YOU the consumer driving DEMAND for any byproduct of oil manufactured goods around the globe.
Hence those wonderful two words of Supply and Demand.
Sorry JM but I'm not going to hang on every word of your long winded diatribe. If you don't understand that high gas prices hurt the working class that I can't help ya.
That's long winded to help you understand, so take your time.
Learn something, so you can at least better understand what drives GDP.
Another watered down version:
Who's asking for gasoline prices "to be well over $3.00"?
Who truly believes that is a good thing for GDP, job creation and long-term interest rates?
But, you can't gloat about paying for gasoline prices at $1.7 without worrying where that journey is going to end and which pocket is going to pay for it. You will pay for it, we will pay for it.
Why keep making Americans vs Americans arguments, which is the same arguments made in Venezuelan, "haves" against the "have nots".
Make arguments about what's good for national job creation, which is the GDP value chain and wealth creation, which is what you are able to keep in the bank.
This post was edited on 2/2 6:10 PM by JMISASANO
JM you have said all that before so quit repeating yourself. This is starting to remind me of the Norvell thread and how you kept going on and on and on about it. Let it go.........move on......I'm going to do the same.
No worries as long as you stop making FALSE claims of oil and gas professionals enjoying high gasoline prices.
The only ones that may enjoy high gasoline prices are the temp or contract labor that swing back and forth from the oil fields to the construction fields, depending on which industry is hot.
A true oil and gas professional enjoys stability and that usually translates into moderate gasoline prices at the pump.
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