I Keep Making This Argument About Oil And Gasoline & Keep Getting Shot Down

[gab13by13]

In today's world I laugh at the "Invisible hand of the Market."

Back when a Democrat was president if someone in the ME even hinted about a war the price of gasoline would skyrocket. Gasoline in central Pa. is as low as I've seen it in years.

Ukraine and Russia aren't just talking about war, they are in a war and the latest strategy for Zelenskyy is to blow up Russian oil depots and refineries that fund the war. Ukraine has also been blowing up oil pipelines, just this month it blew up the Druzhba pipeline that not only supplies Russia with fuel but also Hungary and Slovakia, it pumps 2 million gallons of oil per day.

Krasnov is threatening a war with Venezuela, for oil and yet gasoline prices in central Pa. dropped this week.

Krasnov has taken care of the fossil fuel industry allowing it to drill off Florida and Alaska and other offshore places. Krasnov is giving the Fossil fuel industry our government land to drill on. I think that the fossil fuel industry is thanking Krasnov by keeping gasoline prices from jumping.

Have at me, maybe there is another winter blend changeover to refute me, I just don't get it.

[Simeon Salus]

1. I checked to see if somebody had an open thread before I posted my own.

I saw a few threads a week or more ago. In the current economy, NO OTHER staple purchase prices are lower. Just fuel.

Cars, higher. Used cars MUCH higher. Parts higher. Tires higher. Repairs, way higher.

I'm unable to prove the bar of "collusion", but it sure looks like one business sector is keeping these prices unsustainably low. On purpose. Don't tell me oil producers are taking these losses (or heaven forbid, lower profits) out of the goodness of their hearts. Like the late Dick Cheney, these guys have no hearts.

There's definitely something fishy in the energy sector.

[gab13by13]

2. I'm not crazy then?

Wait, don't answer. 😁

[SWBTATTReg]

3. Perhaps the stench of predatory capitalism is at play here, w/ the oil big shots trying to drive the smaller producers

out of business by keeping prices low for a while, and then running in, scooping up what small time oil producers have failed due to low prices paid for their oil revenues. It's happened before.

And then later, after the big shot oil producers have cleaned up a bit, scooped up a few more small time producers, they'll revert things back to normal prices.

[Simeon Salus]

7. Likely

[Simeon Salus]

6. That remains to be seen, but Google's AI says this boilerplate

"Low gasoline prices are primarily a result of the global oversupply of crude oil and weakened global demand, factors which often correlate with, and can even signal, broader economic slowdowns, rather than being a direct consequence of a strong or weak U.S. economy in isolation."

I could accept this explanation. Signaling a broader economic slowdown. And they've been in drill-baby-drill mode.

"The U.S. has achieved record production levels of nearly 14 million barrels a day." At low prices, too. Right now oil is less than $58 a barrel.

If oil is so cheap, wouldn't it make more sense to buy elsewhere now to hold our production for when prices are higher? This is when we should be filling the national reserve, when oil is cheap, right?

Replenishment?
Google AI says:

"* Direct Purchases: The Department of Energy (DOE) has been purchasing domestic crude oil for the reserve, aiming to buy at a price of $79 per barrel or less. However, purchases were canceled at times in 2024 due to rising oil prices."

"*Exchange Returns: Oil that was previously loaned to private companies during supply disruptions is being returned to the SPR, often with a premium of additional oil."

"*Canceled Mandated Sales: The administration has secured the cancellation of 140 million barrels of congressionally mandated sales that were scheduled through 2027 to pay for government programs, thus preventing further depletion."

That last one looks sketchy.

[Srkdqltr]

4. Oil and gas is a racket/grift . Always has been. Probably always will be.

Prices go up and down on someone's whim.

[Xavier Breath]

11. If someone farts in a refinery, prices immediately skyrocket.

But once the 'crisis' is resolved, it seems to take weeks for prices to fall back to normal.

[Bobstandard]

5. You've got something here. Good observation.

[GreatGazoo]

8. Around 2000 -2001 I worked on the GUI for an online oil trading platform

I'm a database and graphics guy but I had to learn enough about oil to understand the reports we were generating.

The price of oil is determined by supply and demand with less interference than most commodities. There are too many players for the US to be able to rig the price of oil. Eg if Russia sells oil to India all the US can do is tell India to stop buying it. Same for China, etc. The low price of gasoline in the USA is not oil companies helping Kras -- it is weak demand due to the generally poor condition of the world economy.

The regime change in Venezuela will be timed to match the end of the Ukraine war. Both of these events are cued up now. Likely the US will say that a drug boat fired on US military or something similar, eg like the Gulf of Tonkin incident. The double taps seem to be designed to foster this kind of event.

Not all oil is the same. As the price goes higher, more wells go back into production. Oil is currently at $58-ish which means Tar Sands in Canada is not pumping. Why? Because Tar Sands oil needs lots of refining so it is only profitable to pump it when oil is above $80 or so. West Texas Intermediate (WTI) is profitable even when prices are very low because it takes less refining and transportation. Brent Crude (from the UK) is somewhere in the middle. But the floor for WTI is usually $60. Once the price goes under $60 the MIC will take steps to get it up. I met a NYMEX trader who urged me to buy oil every time it dips under $58 because it is guaranteed that it will go back above $60/62 as soon as our $3 trillion military can get it there.

What all of this means is that oil is already too low for US oil companies at $58. They cannot tolerate a further decrease in prices which the end of Russian oil sanction would bring so Venezuelan supply will be taken off line when Russia supply comes back. Bombing, blockades, etc.

Oil companies aren't helping Krasnov -- Krasnov is helping oil companies.

[GJGCA]

9. The "IH" in Adam Smith, twice:

[The rich] consume little more than the poor, and in spite of their natural selfishness and rapacity…they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.

The Theory Of Moral Sentiments, Part IV, Chapter I, pp.184-5, para. 10.

Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 9.


https://www.adamsmith.org/adam-smith-quotes/

[multigraincracker]

12. He also said that Markets must be regulated

to keep monopolies from forming.

[GJGCA]

13. Indeed yes--more quotes:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

The Wealth Of Nations, Book IV Chapter VIII, p. 145, para. c27.

To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from [them], ought always to be listened to with great precaution, [as it] comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

The Wealth Of Nations, Book I, Chapter XI, Conclusion of the Chapter, p.267, para. 10.

[thought crime]

10. FDR's description of Fascism

FDR defined Fascism as the control of government by private power, often through economic dominance, equating its essence to the totalitarian control seen in Italy and Germany. The Trump administration is mostly supports the oil industry and Trump, as a billionaire businessman, represents the takeover of the federal government by private interests, including the billionaire class. Trump exerts centralized control over the economy by selecting which industries will be politically favored and supported. The Invisible Hand has been replaced by the Iron Fist.