Gas Prices

Discussion in 'General Trading Discussion' started by kgord, Aug 29, 2015.

  1. kgord

    kgord Senior Investor

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    How long do the savvy investors here think gas prices will be down? What impact does the potential Iran deal have to do with it? I have heard that the price of gas will dip below 2 dollars before Christmas. Here in Virginia, some stations in the state are already below 2.00 per gallon. Is this a time to speculate on oil futures? How much does the world economy have to do with our gas prices and oil per barrel cost in the U.S.?
     
  2. Kicker774

    Kicker774 Well-Known Member

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    As long as you have heavily supply coming from the middle east you'll see low oil prices.

    Sure you'll see some spikes here and there if Iran or North Korea makes the headlines with their latest round of saber rattling, but with the output I'd expect oil to remain low.

    While oil is a big factor in gas prices you have to keep in mind the refineries. We havn't built a refinery in 25 years yet our demand has shot up since.
    Here in the midwest we were seeing $2.75 - $3.00 /gal due to a refinery being shut down up in Michigan if I'm not mistaken. That puts pressure (demand) on the other refineries and starts to drive up the price.

    We're also heading into an El Nino season from what the talking heads are telling us. That will bring hurricanes and affect gulf of mexico rigs among other issues that put pressure on gas prices.

    > Is this a time to speculate on oil futures?

    I'd say go for it depending on the length of the contract. Your nearing 10 year lows. Sure it may go lower but things are (semi) calm at the moment, from my POV it doesn't take much for a little panic to come about and send the price back up.

    *Fine Print
    This is only a semi-educated opinion piece and not to be used as solid financial advice.
     
    Last edited by a moderator: Jul 8, 2016
  3. AtlantaSports

    AtlantaSports Senior Investor

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    Where I live, gas is around the 2.25 area and I'm perfectly fine if it stays around this mark, to be completely honest. It's nice. If Iran decides to just play nice for awhile, I think that gas prices will stay low.
     
  4. Rainman

    Rainman Senior Investor

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    The days when oil companies made huge profits are gone. As oil is discovered in places where they previously thought there was no oil it means that competition is going to stiffen [once they start selling] and oil prices even though they might creep up a little will never go as high they used to be. But oil investors will still make money.
     
  5. Rosyrain

    Rosyrain Senior Investor

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    We are at $3 a gallon here in Washington and I do not see gas prices dipping that far down unless the government is going to try to get us to spend more at the stores on presents. I guess we will just have to wait and see!
     
  6. ScooterBrandon

    ScooterBrandon Senior Investor

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    We are awash in oil, the global supply story has changed so much in ten years. New supply is coming online and we are figuring out ways to get more from the deposits we already know about.
    Not only that but we are using petrochemicals far more efficiently then we ever did, so that hurts demand.

    Finally more and more electric engines are making there way to market, and as we all know electric engines are vastly superior to internal combustion engines in every single way (the only exception being the portability and energy density of fossil fuels, which is the only reason internal combustion engines ever became popular.)
    I was reading some really interesting stuff last night (with a local craft beer in hand, of course) on locomotives. I guess most modern locomotives actually use a hybrid setup. The electric motor moves the wheels and a diesel engine acts as a power plant.

    I think these prices are here to stay for the near future at the very least.
     
  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I live in an area with lots of oil, nat gas, drilling, refineries, etc. Gasoline at the pump is very cheap.

    In some places here in the US with very strict environmental regs, gas is almost twice as high as it is here.

    I don't personally think that crude will stay this low for much longer. But I have been wrong before.
     

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