"High gas price amnesia" is setting in again

[MetroMPG]

One thing I keep reading is the the current decline in prices is "different this time". More structural rather than cyclical.

EG: the second last time we had a big spike in prices ('08), the U.S. was not awash in oil from North Dakota as it is now.

Although sources like those and Canada's oil sands are really only economical to produce when prices are high, so...

[user removed]

In Saudi Arabia a barrel of oil costs $2 to extract, but they need to sell it for $80 to pay for their govt programs (a few years back). With the US and Canada becoming more productive the recent price drop maybe more long term, but then it's still 50% higher than 6 years ago. Anyone get a 50% wage increase over the last 6 years?

regards
mech

[UltArc]

I don't have a computer, and my mobile with this website is terrible- so posts, my new build on my Mustang and Insight s along with about 8 tanks will go unseen for a while.

[Cobb]

Yeah, the oil game is an interesting one to watch. Much like the stock market you got people betting against it going down and against it going up further driving up prices. That in turn drives up the entry fee for even new investors who want to take part in the action.

You got people who need to buy gas, so demand will always be there.

Then you got those who will do anything to make a buck and will undersell the other guy. Thats good for a while til the big guys either under cut you using what they have in savings to stay afloat or just buy you out.

We are likely in the last situation and its just a matter of time before they are bought out and prices return.

[niky]

New oil from old wells may cost that little to extract, but new exploration requires oil in the $85-100 per barrel range.

Same problem with US oil.

There's is a limit to how low you can go before you disincentivize exploration for new oil. We're somewhere around that point right now.

Originally Posted by H-Man

The point of testing mods while gas is cheap is that it allows you to invest a gallon of gasoline and (for me) a 10% FE gain would translate into about a 20-25 gallon a year return on investment.

Oh, no... go ahead and test. Testing is worth it, especially if the results are shared! I was merely stating that I don't see the point in wasting fuel on your daily grind unnecessarily.

[freebeard]

Oil shale and tar sands are energy negative boodogles that will run their course in short order. As the fracking and constant warfare drag the economy down, demand will slump.

Until the deep, hot abiotic sources of all the oil replenish the fields of wells.

We should just be patient.

[jamesqf]

Originally Posted by freebeard

Until the deep, hot abiotic sources of all the oil replenish the fields of wells.

We should just be patient.

Yeah, just wait around for a few hundred million years, and everything will be fine :-)

[freebeard]

I miss the 'All over but the sweating...' thread.

[ksa8907]

Originally Posted by JRMichler

These low gas prices won't last. The cost of finding new dinosaur oil is about $100 per barrel, and rising 12% per year.

The big oil companies announced that they are reducing exploration spending over the next few years. Google oil firms cutting exploration spending for some articles on the subject.

I'm predicting that the average gas price in the U.S. will be about $5.00 per gallon for regular by 2018.

Maybe its time to replace the pacifica then... that thing is a thirsty little v6!

[Xist]

If gas prices are temporarily dropping, is the asking price of economical cars also going down?