“Oklahoma can’t afford it.” I having been spending a fair bit of time at Market Watch, reading oil related articles. Here are some facts and opinions that I have encountered:
1) Cushing, OK, a major oil depot has nearly filled its capacity. A lot of oil is being stored on oil tankers, and the world appears to be running out of storage space. Everyone is waiting for oil/gasoline sales to move back up so they can sell at a higher price than now. The contracts for “futures” in the next few months are higher than the futures for next month. This is called “contango”, not to be confused with the Argentinian dance of a similar name.
2) A lot of sentiment there was expressed regarding not resuming big spending on gasoline. I decided to take a straw poll of people planning to continue to conserve, and those planning to return to “the good old days”. The vote was 35 conserve, 8 use more. I wonder if that would match the FR sentiment.
3) While OPEC may holler about cutting back, they can’t just turn off the wells, as it is too expensive to get them started again. There or at FR it was mentioned that both Russian and Iran may have a stake in encouraging the Gaza war to increase the price of oil, so they probably won’t intervene effectively to stop it.
4) Sentiment is mixed as to whether oil will drop into the 20’s, vs. moving up to the 60’s and 70’s. Sentiment is pretty strong that it was the speculators that drove the price up into the 100+ area, and this is not likely to happen again in the near future (until amnesia sets in again, my comment).
Yes on #1. I’m just a few miles east of there (in Tulsa). And from the news I’ve read, it’s about ready to overflow... :-)
On #2, I’ve cut way back. I know I’m doing a lot less on gasoline consumption than ever before. Of course, it’s not summer yet... :-)
On #3, I can understand that and it’s most likely true. However, how about slowing down the output on many different wells, instead of shutting them down. Wouldn’t that drastically lower output?
On #4, well, even if gasoline is “up” it seems that oil is “down”. So, we’ll see which one of the two “breaks”...