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What's the feeling out there on low oil prices?


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My company went in big about 5 years ago. Made very significant acquisitions in the energy field (exploration and supporting services) both in Canada and the US. Now they are in trouble. Just did one of the worst layoffs I've seen (and I've worked for this company for nearly 15 years and have seen some bad ones). Had a friend who's been with the company his entire working life get chopped. I'm sure he'll be fine, plenty of job opportunities for a 56 year old white guy who's only worked in a very specialized field, right?

The guidance I'm getting is that pricing is expected to stay at this range (actually forecasted to drop another 15-20%) for the next two years minimum.

Only thing that would change this would be if the Persian Gulf breaks out into a major war.

The sad thing is that before this happened, the US energy field was positioned to become a major player. Now they are getting run into the ground. Undoubtedly the big outfits will survive but many (most?) of the small/mid-size operators won't be around when prices finally climb.

We've had an increased number of cargo 747s, Antonovs, and other cargo aircraft at the airport lately. All flying oil equipment out of the province. Very disturbing.

I feel for your friend. One of my co-workers had a neighbor commit suicide who lost his oil-field job and was about to lose his home. He felt he had no way out and was a similar age. What Chuck didn't mention was that suicides are also up in Alberta, drastically. I am not suggesting your friend will follow the same path.

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Scooby I've seen people addicted to Oxy which is prescribed as a pain killer legally by Dr. Do more damage than pot. Getting revenue from pot and not putting people in prison because of it will cost less and add tax dollars to the coffer. More than likely be controlled in the LCBO....oh yeah I forgot...alcohol is sold at the 7-11 in AB.

I've seen some really questionable spending from the previous regime that makes my blood boil....bUT was overlooked by supporters. What we need are politicians that work for the people and not corporate interests or special interests.

Cheers

Emil

Edited by Emvar
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Also for the oil people out there, is there any difference between Regular unleaded and the higher premium fuels besides price? I read somewhere there is no real difference.

Jari

The answer is yes and the tests that have "proved" otherwise are flawed. What these tests fail to realize is that if you put regular or premium gas in the same car and check their mileage, the car's computer compensates for octane so that the engine will not "knock". The mileage may be the same, but the power of an engine made for premium gas will be cut back and it often takes several tank fulls of premium gas before the computer resets itself. If it was true that regular or premium gas makes no difference, why would auto manufacturers specify that some engines require premium fuel? They would sell more cars if they had the same power with regular fuel, so it makes no sense to do so. If you believe that oil and gas companies are in collusion with auto manufacturers to mislead the public, I think that the Volkswagen fiasco would dispel that. There would be too much to lose if it were true.

Edited by chuck540z3
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The answer is yes and the tests that have "proved" otherwise are flawed. What these tests fail to realize is that if you put regular or premium gas in the same car and check their mileage, the car's computer compensates for octane so that the engine will not "knock". The mileage may be the same, but the power of an engine made for premium gas will be cut back and it often takes several tank fulls of premium gas before the computer resets itself. If it was true that regular or premium gas makes no difference, why would auto manufacturers specify that some engines require premium fuel? They would sell more cars if they had the same power with regular fuel, so it makes no sense to do so. If you believe that oil and gas companies are in collusion with auto manufacturers to mislead the public, I think that the Volkswagen fiasco would dispel that. There would be too much to lose if it were true.

I've never suspected the fuels were not different. The fact that the competitors are not screaming at the government to burn VW to the ground makes me suspect more auto manufacturers are cheating the system though.

I own a VW that is effected and I am pissed off at all of this. But I also blame governments, what moron measures emissions off a computer built by the auto maker? It should be measured off the exhaust!

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So the price of oil is down. Does this mean that as well as filling our cars for less $$$$$$ we can expect our plastic obsessions to drop in price? The plastics industry is tied to the oil industry? Seems like a bit of a long shot but if prices remained low, wouldn't it be reflected in production costs?

Paul

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I took the surplus from the gas budget and applied it to annual passes to Legoland Discovery Center here in KC for the family and I'm thinking of two massive 6K mile road trips this summer and fall. I'm going to make the most of cheap oil....but imo, this is where it should've always been.

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I know it's tough for you guys in the oil industry. Speaking as a consumer in the UK, it has helped us quite a bit. At the top of the market we were paying close to $10 per imperial gallon. At present it's $6.70 give or take. Diesel is now at parity or even cheaper than gasoline. As for our industry, aside from fracking, which is only now being looked into, our offshore industry has been hit, but we only have about 5 refineries left. A lot of our gasoline is refined in the Netherlands and shipped in tankers. It's only in the last year that we have introduced ethanol into the fuels. I run a 2.4 liter diesel Volvo. For premium diesel, I was paying just over 100 GBP for a tankful, which gave me around +/- 800 miles range. Now its around GBP 65 for the same. When your USAFE guys used to have a bigger presence around here, many of them bought the 'small' British cars, as the 'Yank tanks' were indeed problematical on our roads.

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I know it's tough for you guys in the oil industry. Speaking as a consumer in the UK, it has helped us quite a bit. At the top of the market we were paying close to $10 per imperial gallon. At present it's $6.70 give or take. Diesel is now at parity or even cheaper than gasoline. As for our industry, aside from fracking, which is only now being looked into, our offshore industry has been hit, but we only have about 5 refineries left. A lot of our gasoline is refined in the Netherlands and shipped in tankers. It's only in the last year that we have introduced ethanol into the fuels. I run a 2.4 liter diesel Volvo. For premium diesel, I was paying just over 100 GBP for a tankful, which gave me around +/- 800 miles range. Now its around GBP 65 for the same. When your USAFE guys used to have a bigger presence around here, many of them bought the 'small' British cars, as the 'Yank tanks' were indeed problematical on our roads.

I'm paying more for diesel. Prior to the big drop diesel was all over the place, more or less expensive. What hasn't changed is I get roughly 1,000 km per tank. It is still cheaper to drive my Jetta than my truck!

The papers reported today we have some of the cheapest gas prices in the world, only three countries are lower and one of those three is surprisingly not the US.

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Here in Northeastern Tennessee, yesterday evening, it was $1.47 a gallon.

Today I paid 55 Cdn cents/litre.

Which in US gallons is:

.55 x 3.785 = 2.08 Cdn/US gallon.

Which converted to US dollars is:

2.08 X .722 (exchange rate) = $1.50 US/ gallon.

We are still paying more! :)

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Like many I'm enjoying the lower gas prices, but in the back of my mind; there is a nagging thought that.....something unpleasant my be lurking in the future...kind of like a merchant that can't sell his goods so he drops the prices and accepts minimum profits, just before he hangs out the "Out of Business" signs. It would be great to have a process to recycle fossil fuels.

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Diesel is cheaper than petrol here too now.....if you know where to look.

I fill my old diesel Hilux about 30kms up the road for $1.07/litre, not in the town where I live which pretty much has some of the most expensive fuel in the state due to collusion between the service station owners, which are now largely owned by a certain demographic, staffing their businesses with underpaid (or probably actually having to pay to work - but worth it for 2yrs to get permanent residency) staff on a certain type of Visa.

Remember the boat people saga - well this is pretty much the same - people paying to come here, it's just that no-one has to drown.

Pretty much the same thing happening with the 7/11 situation I imagine. "No we've tried really hard, but can't find a local to do the job but my friend from O/S can do it on a skilled migration Visa". Just overlook the fact I pay him the required wage, then send him down to the ATM to withdraw $500 and give it back to me. He doesn't mind living on the poverty line for 2yrs (did that where he came from anyway) but in 2yrs, he'll be eligible for citizenship.

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While I'm not exactly complaining about gas prices, I know they're not low for a good reason. They're low because of sagging economic activity and manufacturing demand. This can only mean bad things to come...

The global economic funk is further revealed in the fact that several central banks have actually instituted negative interest rates. Wrap your brain around that one!

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