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Thread: Gas Prices

  1. #1
    Senior Member FishingTX Skilled Angler TW's Avatar
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    Gas Prices

    CNBC Market Dispatches9/19/2006 12:00 AM ET
    Why $1.15 gas isnít a fantasy
    Sure, it sounds far-fetched, but the pieces are starting to fall into place for what could be a dramatic drop in oil prices over the next few years.

    MoreRemember when you paid $1.15 a gallon for gasoline?

    You could be paying it again. Maybe not this year, but perhaps in the next few years.

    Sure, oil experts say there's little excess refining capacity. Oil reserves are stretched. Oil consumption is soaring in China and India.

    But things are starting to change. Drivers are changing their habits. Global tensions are easing, and more supply is on its way.

    Crude oil zoomed to nearly $80 a barrel this summer as traders fretted about waning supplies and two big potential problems: tensions over Iran's nuclear research program and Katrina-style hurricanes threatening oil production in the Gulf of Mexico.

    To keep prices moving ever higher, traders needed -- and frequently got -- a steady stream of bad news. "It was like you needed a fifth of booze a day to keep the buzz going," says Peter Beutel of Cameron Hanover, a Connecticut energy consulting firm.

    But prices began falling a month ago when it became clear hurricane season wouldn't be anything like last year. Oil traders have come to sense, too, that all the saber rattling over Iran was dissipating. "We got everyone leaning the wrong way," Beutel said.

    (In fact, a big hedge fund was forced to tell its investors this week that it would be taking a huge loss because it bet the wrong way on natural gas.)

    Result: The spot price of crude oil closed at $63.23 a barrel in New York on Thursday, down nearly 18% from a peak of $77.03 a barrel on July 14. Crude rallied slightly on Friday and Monday.

    AAA says the national average price of gasoline is $2.495 a gallon, down nearly 17% from peaks in August, and there are some communities in Missouri where it has fallen under $2 a gallon. Prices should moderate further in the coming weeks because the summer driving season is over.

    The oil price break has forced everyone in the energy business to take a hard look at how much lower prices could fall. A lot lower, says Philip Verleger, a noted energy consultant who was a lone voice several years ago in warning that oil prices would soar. Indeed, he told McClatchy Newspapers last week, "All the hurricane flags are flying" in oil markets.

    If everything falls into place, crude could drop perhaps even to $15 a barrel, Verleger says. And then, he says, you would see gasoline at $1.15. Here's how that could occur.

    Oil and gasoline inventories continue to grow. They've been building up all over the world as users and refiners have scrambled to ensure enough supply in case, say, the Strait of Hormuz in the Persian Gulf is shut down. Tankers from Iran, Saudi Arabia, Kuwait, Iraq and other Gulf oil producing countries must pass through the strait to bring crude oil to the rest of the world.

    The weather cooperates. On top of a hurricane with few threats to the oil and gas fields in the Gulf of Mexico, weather cooperation means a warm winter like the winter of 2005-2006. That would drop demand for heating oil, a key heating source especially on the East Coast and in Europe. And that would create excess supplies of crude that refiners could use to make gasoline.

    Tensions in the Middle East continue to ease. This assumes conflicts between Israel and Hezbollah in Lebanon tail off and that Iran and the rest of the world come to an agreement over Iran's nuclear program. (Admittedly, the latter is a reason why the scenario could fall apart.)

    Drivers take the bus. There is anecdotal evidence that U.S. drivers are finding other ways to get around with gas prices above $3. The big question is if they will climb back behind the wheel as prices drop.

    1. At current prices, Beutel says, "you can drill a lot of dry holes before you give up on a field." And so, drawn by the potentially huge profits, energy companies are finally starting to make plans to drill for more oil.

    Example: the Jack 2 field in the Gulf of Mexico now being developed by Chevron (CVX, news, msgs), Devon Energy (DVN, news, msgs) and Norway's Statoil (STO, news, msgs). While the field is 7,000 feet under water and another 20,000 feet under the ocean floor, it's also huge. One report suggested it could boost current U.S. reserves by 50%.

    Cambridge Energy Research Associates says some 360 additional drilling projects are now under way and global supplies could grow by some 25% by 2015.

    2. Beutel thinks buyers are already demanding more fuel-efficient vehicles. "They're not buying SUVs," he says.

    Not now anyway. But donít write the Hummerís obituary just yet. Beutel thinks that, at some point, prices will drop so low that Americans will get complacent and start driving big gas-guzzlers again. And the cycle will turn.

    -- Charley Blaine

  2. #2
    lumberdog
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    I used to own a 1967 lemans and used to pay .27 a gallon in 1973

  3. #3
    Senior Member FishingTX Skilled Angler TW's Avatar
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    Red face

    I had a 69 Lemans and I was paying about 39 centa a gallon in 74. It was in cherry condition and I bought it from a doctor friend for $ 300.......sure would love to still have it now............they just don't make em like that anymore...I can't think of a place on it's motor that you couldn't easily get a wrench on....nowadays you're lucky to have a clear view of the cover that you think that the part that you are trying to get is under.......no computers or fuel injection to mess with back then either.......good ol days......we just didn't realize it at the time.......

  4. #4
    Senior Member Master in FishingTX Gentleben's Avatar
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    I had a 1960 Biscayne with a bulletproof 283 man that thing would purr down the hiway, replaced it with a 1964 GTO....
    Gas is $2.03 a ga lin Crosby at WalMart
    Make AMERICA GREAT AGAIN!!

  5. #5
    Senior Member Master in FishingTX whitebassfisher's Avatar
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    The following line you wrote TW is so funny because it is so true: ....nowadays you're lucky to have a clear view of the cover that you think that the part that you are trying to get is under.......

    I can remember riding to the gas station on my bike for lawn mower gas carrying a 1 gallon can with a quarter in my pocket, and getting change! It was 19.9 cents a gallon !

    I would not rush out and buy a gas guzzler yet! The recent drop in prices just may be connected to the fact that an election is near!
    Whitebassfisher
    <)))><

  6. #6
    Senior Member Master in FishingTX Pawpop's Avatar
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    Ya they have run the price up so high that we think 2.00 pr gl is cheap!!
    And GOD said:

  7. #7
    Senior Member Master in FishingTX croxt's Avatar
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    did you ever change the timing belt in the lemans?

    seems the gears were plastic......i know in 1971 model....unsure of in the earlier models...........

    i came along a few years after you fellas.......my "dreamboat" was a 1968 two-door impala.......327 with a powerglide tranny.......battle tank......outlasted 4 of us boys growing up.
    Clark.......gigem '91

  8. #8
    Senior Member FishingTX Skilled Angler TW's Avatar
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    Quote Originally Posted by croxt
    did you ever change the timing belt in the lemans?

    seems the gears were plastic......i know in 1971 model....unsure of in the earlier models...........

    i came along a few years after you fellas.......my "dreamboat" was a 1968 two-door impala.......327 with a powerglide tranny.......battle tank......outlasted 4 of us boys growing up.
    I never had the first seconds trouble with mine but like I say it was cherry when I bought it.

  9. #9
    Senior Member Master in FishingTX whitebassfisher's Avatar
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    Those Pontiacs had a timing chain, but yes plastic gear teeth, on '68 and '69 models for sure. I was involved in at least 3 of those chain/gear replacements on 400 cubic inch engines.
    Whitebassfisher
    <)))><

  10. #10
    vernon courvelle
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    Cool oil prices

    earlier in one of the posts it refered to oil prices going up if there was fear of our supply being cut off in one of the narrow places or canals that our shipping goes thru. well if you remember JIMMY CARTER gave the panama canal to a drug dealer. NOREGA, he is in prison in the usa now, too bad ole jimmy is not in with him. but anyway once panama got control ALL usa troops had to leave the country, leaving the canal unprotected. now panama has turned control of operations of the canal over to china. the company is called COSCO china ocean shipping company. they run the canal now.they are the biggest shipping company in the world. now the bad news they are a front for the red chinese army. the army owns the company. now isnt that special. they have been caught by our government shipping prohibitted items to north korea , iran ,syria, and the usa. so now china can cut us off from a major passage from the pacific to the atlantic. all they have to do is sink a ship in the canal and it is closed. also good ole bill clinton gave the huge long beach naval facility in california, complete with all piers and equipment to the city. then the city immediately leases the port to COSCO. GIVING THE CHINESE A PORT IN THE USA. now looks like we have a pattern here. COSCO was the democrats largest contributer during the elections, remember china gate when this was found out and all the investigations. congress got enough support to veto ole bills plans,

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