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Campfire Ranger
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Campfire Ranger
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Why is it - when oil prices tank, it's called an economic disaster.
When food prices tank it's called "a market correction" ?
I've always been a curmudgeon - now I'm an old curmudgeon.
~Molɔ̀ːn Labé Skýla~
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Campfire Outfitter
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To those that think cheap fuel is good, well, you'll see. High fuel has just about killed the economy in this country. Probably each one of those new oil field jobs cost 2-3 jobs in other sectors. It's a closed system. Money isn't "created" out of thin air, unless you're a bankster with access to the national printing press. I guess I'm a little slow. Would you mind explaining how 2-3 jobs in "other" sectors is lost, and how it's a closed system? Since I'm slow, you could start by letting me know what the "other" sectors are, maybe with a simple list. However, I'm most interested in the "closed system" part, so if you could explain that in simple terms it would help me a lot. Thanks. Ethan, I'm with Paladin on wanting to hear your answer.
The Mayans had it right. If you�re going to predict the future, it�s best to aim far beyond your life expectancy, lest you wind up red-faced in a bunker overstocked with Spam and ammo.
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Campfire Ranger
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Campfire Ranger
Joined: Jan 2005
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Why is it - when oil prices tank, it's called an economic disaster.
When food prices tank it's called "a market correction" ? It is a correction. The bigger the bubble the harder the correction. Housing, mining and oil are historically in this cycle. If what's happening now suprises anyone or catches them unawares... well, there's only one person to blame. Housing economic impact dwarfs oil and mining nationally. That was a disaster we finally came out of last year, that was the biggest bubble and burst ever. Oil will go down, then back up and stabilize, until then lower prices will spur all the other larger markets, lower shipping, ag, manufacturing. Until the next bubble... Kent
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Campfire Kahuna
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Campfire Kahuna
Joined: May 2011
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Not directed at anyone in particular, but some of you need to step away from the Koolaid. Lower prices are good for everyone that drives, and just about every industry you could name except oil. The country as a whole could get moving again with lower fuel prices.
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An 8 dollar driveway boy living in a T-111 shack
LOL
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Campfire Ranger
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Campfire Ranger
Joined: Sep 2003
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fireball,
You seem to be not thinking here.
What about the trucking companies who haul supplies/materials to the oil fields? What about the companies who manufacture those supplies? What about those who supply those manufacturers with raw materials? And all those workers along the entire supply chain? Do you realize how much capex projects pump into the economy? No, you don't apparently. Get rid of those, and get rid of a lot of good paying blue collar jobs that were created well away from the oilfields.
I know things suck in Oregon, as you don't have oil/gas. But, the country has been moving along nicely the last 5 years thanks to our energy "boom". Good jobs created well beyond the oilfield, and money has been flowing. Cut that off, and everywhere will suck like Oregon.
Now, put that thinking cap on and start using it.
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Campfire Outfitter
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Not directed at anyone in particular, but some of you need to step away from the Koolaid. Lower prices are good for everyone that drives, and just about every industry you could name except oil. The country as a whole could get moving again with lower fuel prices. 100$/barrel oil was the final straw that popped the bubble in 2008.
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Campfire Ranger
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Campfire Ranger
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Explain how oil popped the housing bubble. This ought to be good.
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Campfire Outfitter
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Campfire Outfitter
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Explain how oil popped the housing bubble. This ought to be good. People couldn't pay their mortagages AND fill their tanks, dumbazz.
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Campfire Outfitter
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Nothing exists in a vacuum in the economy. The housing bubble was created by a lot of factors, one of which was Clinton's stupid shenanigans to try and make it where every unemployed deadbeat would be able to buy a house via government backed loans. This drove the prices through the roof because you had people bidding on houses that weren't spending their own money so they had no reason to shop wisely. These same people were already borrowing from Peter to pay Paul when fuel went through the roof driving food prices up due to shipping costs. Couple that with an increase of $1000 a month in the household fuel budget and now they couldn't pay the mortgage. Defaults happen and the whole house of cards came down. Think $1000 a month increase in the fuel budget is an exaggeration? Not everybody lives in suburbia and if you live in the boondocks as I do and drive 40K a year to get to work/shopping then a doubling of fuel prices costs a lot of beer money unless you've got some econobox vehicle. Therefore high fuel costs cost a lot of jobs in the construction industry since housing starts went to near zero.
At the same time some manufacturing was brought back to the U.S. from China because of higher shipping costs, that's a plus. They created a lot of 6 figure jobs in the the oil patch for guys without college degrees, that's a plus. A guy near me that started a directional drilling company got rich and could afford to build an 8000 sq ft mansion creating more local construction jobs, that's a plus. He also takes about 20 of his guys to west texas to hunt high fenced whitetails every year pumping a lot of money into the economy there, that's a plus. My local taxidermist gets $500 a head to mount those grain fed hormone pumped freaks, that's a plus. Moving more production and exploration to the U.S. and Canada has to count as a plus, getting us away from being as dependent upon muslim countries that hate us and totalitarian regimes like Russia.
Airline tickets went up so less people traveled. The tourist industry took a hit due to less tourists so less hotel workers and food workers, that's a minus. Vehicle sales stalled since people couldn't afford new vehicles so less auto worker jobs, that's a minus.
So on and so on... Everything is affected somehow by the price of oil so who can really say whether high oil prices are good or bad. My gut feeling is that the good done by the extra jobs created by high oil prices is outweighed about 5 fold by the bad it does to the rest of the economy. Despite the all the Obama administration BS and the completely falsified unemployment numbers, there are still more unemployed people in this country than any point in history along with more on food stamps. That's NOT a plus.
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Campfire Tracker
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Campfire Tracker
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Explain how oil popped the housing bubble. This ought to be good. People couldn't pay their mortagages AND fill their tanks, dumbazz. At that same time there's a large portion of the US that burns or burnt fuel oil for their home heating. I was one of them. My heating costs went up 300-400%, thankfully I was able to pay my bills but that pretty much wiped out any extra money I had. Ad into the factor that about everything else went up in price as well. As mentioned above they made it so everyone could be in way more house than they could afford so when the line was stretched a little more it snapped.
Last edited by cal74; 12/14/14.
Life is just one damned thing after another
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So what are the magic numbers for a bbl of oil as well as a gallon of gasoline and a gallon of diesel?
$75-$85, $2.00-$2.50, $2.50-$3.00 wouldn't piss me off, but is that enough to keep domestic production at least sustainable? I have no clue. As of 12/14 ND has 1.5% fewer rigs actively drilling vs. the 5yr average. 181 vs. 184. In all reality, 120-150 active rigs would probably give everyone a chance to catch their breath and we'd have a chance to catch up a bit on infrastructure without killing investment.
A couple of pipelines would keep many of the same blue collar folks working for similar salaries and do a lot to ease the discount ND/MT (Baaken) crude has to take due to trucks and trains being the only way to get the crude to market.
The above isn't gospel, more like grabbing numbers out of thin air in hopes that folks that know lots more than I do about energy exploration can give a better understanding of where the numbers need to be.
I can walk on water.......................but I do stagger a bit on alcohol.
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Enjoy it while it lasts. Once the Saudis kill of the weaker, higher production cost competition and put the breaks on US exploration and production, you'll see the prices skyrocket again. The low prices are benefit to consumers in the short term but strategically it's going to create instability in many countries. I don't mind if the ruskies are having trouble, slow them down some more. going to work yesterday there was lots of pump jacks idle waiting for the price to rise again.lots of companies can shut down a few which adds up to good volumes on the overall picture. Also when they start up again some of the wells are more productive. we are still building leases and opening up old ones to drill deeper and horizontal. cheaper when you are not having to build more road , and some of the new leases arebuilt for up to 18 wells , less cost less environtal disturbance fewer roads. norm
There is not enough darkness in all the world to put out the light of even one small candle----Robert Alden .
If it wern't entertaining, I wouldn't keep coming back.------the BigSky
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Campfire Kahuna
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Campfire Kahuna
Joined: Nov 2005
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Nothing exists in a vacuum in the economy. The housing bubble was created by a lot of factors, one of which was Clinton's stupid shenanigans to try and make it where every unemployed deadbeat would be able to buy a house via government backed loans. This drove the prices through the roof because you had people bidding on houses that weren't spending their own money so they had no reason to shop wisely. These same people were already borrowing from Peter to pay Paul when fuel went through the roof driving food prices up due to shipping costs. Couple that with an increase of $1000 a month in the household fuel budget and now they couldn't pay the mortgage. Defaults happen and the whole house of cards came down. Think $1000 a month increase in the fuel budget is an exaggeration? Not everybody lives in suburbia and if you live in the boondocks as I do and drive 40K a year to get to work/shopping then a doubling of fuel prices costs a lot of beer money unless you've got some econobox vehicle. Therefore high fuel costs cost a lot of jobs in the construction industry since housing starts went to near zero.
At the same time some manufacturing was brought back to the U.S. from China because of higher shipping costs, that's a plus. They created a lot of 6 figure jobs in the the oil patch for guys without college degrees, that's a plus. A guy near me that started a directional drilling company got rich and could afford to build an 8000 sq ft mansion creating more local construction jobs, that's a plus. He also takes about 20 of his guys to west texas to hunt high fenced whitetails every year pumping a lot of money into the economy there, that's a plus. My local taxidermist gets $500 a head to mount those grain fed hormone pumped freaks, that's a plus. Moving more production and exploration to the U.S. and Canada has to count as a plus, getting us away from being as dependent upon muslim countries that hate us and totalitarian regimes like Russia.
Airline tickets went up so less people traveled. The tourist industry took a hit due to less tourists so less hotel workers and food workers, that's a minus. Vehicle sales stalled since people couldn't afford new vehicles so less auto worker jobs, that's a minus.
So on and so on... Everything is affected somehow by the price of oil so who can really say whether high oil prices are good or bad. My gut feeling is that the good done by the extra jobs created by high oil prices is outweighed about 5 fold by the bad it does to the rest of the economy. Despite the all the Obama administration BS and the completely falsified unemployment numbers, there are still more unemployed people in this country than any point in history along with more on food stamps. That's NOT a plus. The jobs created in the oil industry were at the huge expense of more jobs in other sectors...IMO. Much was made of the "jobless recovery" and the stock market has went wild whilst many of our seniors lost their entire savings through spending up their principals rather than getting any decent interest over the past decade. I'm sorry, but to me, the stock market is the very province of the money changers and those who do not work for a living. The stock market heading down only bothers me when good people lose jobs because of it. People think money comes out of the air. Well, when the only money that generations have known is paper, then I guess that's true.
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Campfire Ranger
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fireball,
You seem to be not thinking here.
What about the trucking companies who haul supplies/materials to the oil fields? What about the companies who manufacture those supplies? What about those who supply those manufacturers with raw materials? And all those workers along the entire supply chain? Do you realize how much capex projects pump into the economy? No, you don't apparently. Get rid of those, and get rid of a lot of good paying blue collar jobs that were created well away from the oilfields.
I know things suck in Oregon, as you don't have oil/gas. But, the country has been moving along nicely the last 5 years thanks to our energy "boom". Good jobs created well beyond the oilfield, and money has been flowing. Cut that off, and everywhere will suck like Oregon.
Now, put that thinking cap on and start using it. We just lived through this 10 fold through the housing boom and bust. For every guy in swinging a hammer... the lumber jack, sawmill, truss yard, redimix plant, steel yard, cement mine, gravel pits, truckers, copper mines, plumbing supplies, electrical, vehicles, excavators, equipment that can pump pull lift push and demolish, secretaries, salesmen, insurances, credit lines... It was interesting that no one understood GM's main reason it needed bailing out. GMAC financing on all those fleets and specialty orders of construction vehicles. If you think 22lf being in short supply is a pain, imagine trying to find a concrete truck, crane, boom pump, lift all, dump truck, flatbed... during the boom... and the manufacturers going balls to the walls putting them out... then eating those orders and all self financing of previous after the bust. The cities, counties, states, and feds were eating high on the hog... county's impact fees per unit sky rocketed thousands of dollars, drunk on new riches they built fancy offices, new schools, new vehicles, wasting money. Arizona under Napalitano was one billion in the surplus, the bitch spent it on special interests, locking in budgetary mandates that guaranteed 83% of state budget, when Brewer inherited the mess she was tied to budget cuts in only 17%. After the bust the mayor of Mesa said, we had one building permit start the last two months, we do have businesses that generate revenue, but it takes a lot of shoe sales to equal one home start. During the boom, an illegal was making 15 an hour to start as a laborer and 25 if they had any skills. Americans were making high 5 figures to low six figures for uneducated skilled workers. Sound familiar? When production is spurred by consumer use it produces a sound economy... when it is spurred by investment futures turnover it becomes a ponzi scheme, bubble and will burst. Kent
Last edited by krp; 12/14/14.
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Campfire Kahuna
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Campfire Kahuna
Joined: May 2011
Posts: 56,299 Likes: 9 |
Lower prices are good for everyone that drives, Read that again real slow and tell me how high fuel prices are good for America. Sure, good for a few. The reason the oil boom looks so good right now is 1) it is good 2) the rest of the economy has been systematically destroyed by the administration in charge, so anything working looks good right now. Maybe the reason this doesn't resonate with the oil guys (and others) on here is that they are in the economic strata above needing to think about how much it costs to drive 300 miles to go bird hunting. Alot of the country is not in that position. When fuel hit $4-$4.50 a gallon we stopped driving any extra and stayed current on our other bills. I guess we shoulda stopped making our house payment and cried for govt assistance? We didn't support any of the businesses that require us to be driving around like tourists or hunting far from home. It literally drove us indoors. It had a far reaching impact in our lifestyle when our monthly fuel bill hit $1700-1800. We bought my wife a hybrid car that gets 40mpg. I started planning a whole lot better with driving my trucks. I cut out hunting birds and coyotes. Honestly, I can't believe I even have to explain it. High fuel prices kill working people, which kills the economy, at least where I'm from. I guess most of you guys have a cush life going. We are just working, raising three kids.
_______________________________________________________
An 8 dollar driveway boy living in a T-111 shack
LOL
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Campfire Regular
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Not directed at anyone in particular, but some of you need to step away from the Koolaid. Lower prices are good for everyone that drives, and just about every industry you could name except oil. The country as a whole could get moving again with lower fuel prices. 100$/barrel oil was the final straw that popped the bubble in 2008. I remember it closer to $150 when the market began its big drop. Coming into Nashville I saw gasoline at $2.11 and diesel at $3.05. Significantly less than the Wheeling WV area. Incredible gas boom in my area. Wells/rigs everywhere. At least 4 large processing plants within 20 miles of me. All employing lots of construction and operators. Coal also continues to boom locally. Steel and aluminum are gone. Chemicals hanging on and some are bolstered by the drilling. Young people have opportunities not seen since the 70's. We ship by rail, barge and truck as do the other industries. When oil was well over $100 surcharges were imposed. I also remember UPS surcharges on deliveries. Without these charges and overall cheaper costs of moving goods I would think the economy will benefit. May be however I'm missing something in the big picture.
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OP
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I would like to see it stabilize at $2 a gallon for both fuel and gasoline. That would sustain both industries; oil and all the rest!
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Those who live by the sword get shot by those who don't.
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I would like to see it stabilize at $2 a gallon for both fuel and gasoline. That would sustain both industries; oil and all the rest! Newt Gingrich agrees, and he's actually crunched the numbers unlike any of us.
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Campfire Kahuna
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Campfire Kahuna
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I would like to see it stabilize at $2 a gallon for both fuel and gasoline. That would sustain both industries; oil and all the rest! I don't know if it would sustain oil or not, but it sure would help 100 FRICKEN % of people that drive.
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An 8 dollar driveway boy living in a T-111 shack
LOL
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Fireball, I hear you on the cutting out hunting thing. I had to give up going to my favorite spots for several years because of the costs in fuel. Its only 100 miles round trip, but thats a killer of the deal when i HAVE to be able to pay for fuel to get to work and back and anywhere else i have to be.
For two years, i rarely, if ever, saw my tank full. Now, my wife is working and we are able to put fuel in both rigs, have a few extra dollars to claw our way out of debt and even get my son a few Christmas presents.
Some simple numbers for those of you who cant seem to wrap your heads around this...
$40 is your fuel budget for two weeks.
Your car gets 15 MPG in town, 25 on the highway.
You have to drive to work and back 10 times in 14 days. In my specific case, it is 2 miles to work and back. So 4 miles all told. For my wife it is 8 miles round trip.
Now, at $4 a gallon, you get 10 gallons of fuel. That 10 gallons only nets you 150 miles in town, closer to 250 on the freeway. I am left with 110 drivable miles in town. A trip to some stores is nearly 10 miles round trip. I do my best to grocery shop in large quantities, and that means a 70 mile round trip to Costco, or Winco. My gas goes away pretty quickly. Same goes for my wife's car. And for a long time, we only had one car to do all the traveling. Take into account doctor appointments, errands, store runs for something you need or forgot, and anything else that may come up, you can see how only getting 10 gallons of fuel can limit your ability to do ANYTHING other than the bare essentials.
Now, drop the cost of fuel to $2 a gallon and see how the only thing that changes is the ability to go twice as far for the same $40, and maybe sneak in a hunt or family based activity with the leftover cash?
Why is this so hard for some people to comprehend?
Fireball has his driving to consider, and i have mine. Mine is significantly less than his, but we were both effected pretty much the same by the cost of fuel.
30-06 till i die, the greatest round ever! I carry a gun because a cop is too heavy! CEO of a Turdlike People: Turds & Tats Division... (per Ingwe  )
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