Under $2 Gas: Enjoy It While You Can!

[nsaspook]

http://www.bloomberg.com/news/2014-12-03/first-u-s-gas-station-drops-below-2-a-gallon.html

http://www.gasbuddy.com/GB_Map_Gas_Prices.aspx

I know it won't last long but loving it while it does.

 

[edward]

http://www.bloomberg.com/news/2014-12-03/first-u-s-gas-station-drops-below-2-a-gallon.html

http://www.gasbuddy.com/GB_Map_Gas_Prices.aspx

I know it won't last long but loving it while it does.

The price is low because there is no money to be made in speculation when so many drivers don't the have money to spend.

On the other hand look at the price of generic drugs.

One half of generic medicines went up in price between last summer and this summer; about 10 percent more than doubled in cost in that time, with some common medicines rising by over 500 percent, new data released in connection with a Congressional hearing found. These include thyroid replacement hormone, the antibiotic doxycycline, the heart pill digoxin and the asthma pill albuterol.

http://www.nytimes.com/2014/11/25/u...-relief-for-rising-cost-of-generic-drugs.html

 

[Greg Bernhardt]

$2.50-2.70 in my city. Under $2 would be amazing.

There have been some interesting articles about shale oil vs opec
http://www.cnbc.com/id/102234051#.

 

[phinds]

Whenever the price of gas goes down like this I always wonder, of all the people who vehemently curse those greedy gas companies for raising the price, how many of them are now saying, oh those wonderful gas companies, lowering the price for us ?

 

[mheslep]

http://www.bloomberg.com/news/2014-12-03/first-u-s-gas-station-drops-below-2-a-gallon.html

http://www.gasbuddy.com/GB_Map_Gas_Prices.aspx

I know it won't last long but loving it while it does.

I don't know how long under $2/gallon, but I don't see anything anywhere near the horizon of a couple years at least that could push US gasoline back over $3/gallon, not with the kind of domestic production show below, which is nothing short of a revolution.

 

[Danger]

I always have mixed feelings about this subject. As an Albertan, most of my comforts and medical requirements are paid for by oil revenues. On the other hand, as an ex-driver with a large house to heat, the lower prices are nice. I do miss what it was like when I started driving; gas was 35 cents/gallon (Imperial gallon, so about 1.2 US).

 

[mheslep]

a large house to heat

Oil heat?

 

[Danger]

Oil heat?

Natural gas. Same for my water heater and stove (but I almost never use that).
A lot of farms still use bunker oil, as far as I know, but I haven't lived on one since '65.

 

[edward]

Here is an interesting clip (If it works)

http://www.bloomberg.com/video/popout/mBlxW2RXQsKSvE4cQpOrCw/146.41/

Ok so this is different, it doesn't work until it is over then click the arrow.

 

[edward]

Natural gas. Same for my water heater and stove (but I almost never use that).
A lot of farms still use bunker oil, as far as I know, but I haven't lived on one since '65.

AS of 2011 8% of US homes still used heating oil and most were in the NE. I can image those folks are happy with the recent oil prices.

http://www.scientificamerican.com/article/oil-versus-natural-gas-home-heating/

 

[mheslep]

Probably much lower now even since 2011. Share of oil heat has been falling fast. Almost nonexistent in new residences, and the old oil burners are fading away. Wood burning is has been on increase especially in the NE.

 

[Psinter]

The premium is $3.21-$3.32. (Warning, probably ignorant comment ahead) I don't even know why regular exists. Most cars's instructions say you have to use premium (including the one I use). Never seen a car saying it can use regular (though that doesn't mean there doesn't exist one). But pay no heed to my comment, I don't really know the difference, I just follow instructions and use premium.

I love as well that it has lowered down.

 

[Danger]

I don't really know the difference

I have no idea what it means now. When it first came out, "premium" was what used to be just "gas". "Regular" had a lower octane rating and so was cheaper. Much later, when they came out with hardened valve seats for engines, regular became "unleaded". Then they dropped lead from all of it, but dropped the octane on both until "premium" became what used to be "regular" and "regular" became swamp water. All I know for sure is that after 1980 I had to add two cans of octane boost to each tank of "premium" gas to make my 440 work, and that premium had to be Mohawk because they had lithium or something added into their ethanol/gasoline blend in place of lead, and the only other gas available by then was unleaded. That would have killed my car dead within weeks, because lead was what lubricated the valves. Cars built after about '76 or so are made to run on unleaded.

 

[jtbell]

Most cars's instructions say you have to use premium (including the one I use). Never seen a car saying it can use regular (though that doesn't mean there doesn't exist one).

Both of our cars use regular (87 octane) gasoline: a Chevy Sonic and a Chevy Spark. Both are 2013 models.

 

[russ_watters]

(Warning, probably ignorant comment ahead) I don't even know why regular exists. Most cars's instructions say you have to use premium (including the one I use). Never seen a car saying it can use regular (though that doesn't mean there doesn't exist one).

Yeah, I really don't know where you are getting that. The vast majority still say to use regular -- that's why it is still sold! What determines which you should use is the compression ratio: higher compression ratio cars need premium.

My current car is a Kia Optima turbo and my last was a Mazda 6 and both took regular.

Much of what drives premium gas sales is marketing hype (the name, "premium"!), not actual need. This is a bit out of date, but as of about 1990, the market share of premium gas was 30% while the actual need for premium gas was about 20%:
http://www.uctc.net/papers/457.pdf

More up to date with lists of cars, but no stats:
http://www.edmunds.com/fuel-economy/to-save-money-on-gas-stop-buying-premium.html

 

[Medicol]

http://www.bloomberg.com/news/2014-12-03/first-u-s-gas-station-drops-below-2-a-gallon.html

http://www.gasbuddy.com/GB_Map_Gas_Prices.aspx

I know it won't last long but loving it while it does.

It'll last forever. I hope so.

 

[phinds]

The premium is $3.21-$3.32. (Warning, probably ignorant comment ahead) I don't even know why regular exists. Most cars's instructions say you have to use premium (including the one I use). Never seen a car saying it can use regular (though that doesn't mean there doesn't exist one). But pay no heed to my comment, I don't really know the difference, I just follow instructions and use premium.

I love as well that it has lowered down.

Neither my wife nor I have ever owned a car that took anything other than regular. I have no idea where you get your "facts" but they are wrong.

 

[nsaspook]

No need for premium for anything I currently drive (sold my last 3/4 ton 4x4 a few years ago) but I do like 'pure' gas in the car as I see no long term economic or environmental benefit from corn ethanol.
http://pure-gas.org/index.jsp?stateprov=OR

 

[Nikitin]

I don't know how long under $2/gallon, but I don't see anything anywhere near the horizon of a couple years at least that could push US gasoline back over $3/gallon, not with the kind of domestic production show below, which is nothing short of a revolution.

OPEC + Friends flooding the US market with cheap oil would (in the long term).

 

[russ_watters]

I see this as OPEC's death rattle. They are approaching their production limits and will soon start to decline. Since the amount of oil they have left is fixed, selling more at a lower price today instead of the same at a higher price later is going to hurt them a lot in the long run.

The shale oil revolution can be slowed, but it can't be stopped or reversed: they don't have enough oil to do that.

 

[Greg Bernhardt]

I see this as OPEC's death rattle

This could make for an interesting discussion on what happens to the middle east and north africa. If it's bad now, what happens when they don't have any money.

 

[nitsuj]

I understand this is going to be a new norm, and if diesel continues to follow suite (and the sulfur removal process improved / and fixed amount long term) is great news for consumers / employees. I'd guess it'll be long term as in 5yrs.

It's a crappy situation for West Canada oil sands, hopefully US starts buying more CND goods/services again. but good on America; this is the proper route. (lots of oil production = powerful dollar. and wonder of the US "in camera" politicking with respect to OPEC, if any, in other words I'm curious if the US had direct influence on OPEC's determination.

Oh and get out of <5yr gold, if the run hasn't already started lol; as US is getting it's shine back.

 

[russ_watters]

This could make for an interesting discussion on what happens to the middle east and north africa. If it's bad now, what happens when they don't have any money.

Yes. I've been thinking about that for a while. The next 10-20 years may see a major shift in geopolitics.

 

[nikkkom]

This could make for an interesting discussion on what happens to the middle east and north africa. If it's bad now, what happens when they don't have any money.

It probably will get *better* - they will have fewer $$$ for buying arms.

 

[russ_watters]

...in other words I'm curious if the US had direct influence on OPEC's determination.

You mean on OPEC's output choices? Yes, from what i understand, OPEC fairly explicitly stated that this is an anti-US shale price war. Obama (correctly IMO) responded: "yawn".

 

[russ_watters]

Here's an article from October that correctly predicted the price war and argues that even if OPEC "wins" in the short term, they still lose in the long term...and that they overestimate their odds/power.

http://www.marketwatch.com/story/can-saudis-beat-north-dakota-in-an-oil-price-war-2014-10-08

And here is an update from a few days ago from the same source that says more forcefully, no, they can't.

http://www.marketwatch.com/story/opec-is-wrong-to-think-it-can-outlast-us-on-oil-prices-2014-12-02

Either way, the next few months will be an interesting experiment in the elasticity of both sides of the market.

 

[nitsuj]

You mean on OPEC's output choices? Obama (correctly IMO) responded: "yawn".

You are far more informed than me with economics, how come Obama's response was "Yawn" and not a celebratory "YA!". Is that a poker face? In other words the only negative I see is the impact on US oil companies and though I don't know about trade agreements, isn't the US allowed to subsidize / tariff oil trade favorably for domestic oil companies?

 

[russ_watters]

You are far more informed than me with economics, how come Obama's response was "Yawn" and not a celebratory "YA!". Is that a poker face? In other words the only negative I see is the impact on US oil companies and though I don't know about trade agreements, isn't the US allowed to subsidize / tariff oil trade favorably for domestic oil companies?

It's a double-edged sword for liberals. They like that lower prices grease the economy and hurt our oil companies, but dislike that they goose consumption (SUV sales) and hurt alternate energy. Inwardly, he hasn't really expressed an opinion that I've seen; the only response I saw was to OPEC; 'no, we won't fight back by stockpiling - we don't care if prices drop" (paraphrase).

(Edit) For subsidies/trade, the biggest issues I know of are the current restrictions on federal drilling areas and a ban on crude exports, neither of which are budging.

 

[nitsuj]

Good stuff, being on the light side of the income scale I am happy for this scenario.

Hopefully Saudi continues to invest in addressing their domestic "social concerns" (don't need another group of haters/ idle hands/unemployment) , though it seems unlikely. It seems to me that would be the first thing on the budget to cut. meanwhile in Dubai...

 

[BobG]

The premium is $3.21-$3.32. (Warning, probably ignorant comment ahead) I don't even know why regular exists. Most cars's instructions say you have to use premium (including the one I use). Never seen a car saying it can use regular (though that doesn't mean there doesn't exist one). But pay no heed to my comment, I don't really know the difference, I just follow instructions and use premium.

I love as well that it has lowered down.

Most cars use regular. The main difference between premium and regular is the octane level. Higher octane prevents pre-ignition (which causes knocking when your cylinder fires at the wrong time). Most engines aren't such high performance machines that they require premium.

Lower oxygen levels also reduce pre-ignition problems. Regular usually has a an octane level of 87. Where I live (high altitude), regular has an octane level of 85 and most cars work fine. In fact, a lot of owner's manuals will even mention that your car can run on lower octane at high elevations. None the less, there's an awful lot of owners that don't read their owner's manuals very closely and pay extra for the 87 octane gas even though they don't need it.

Theoretically, you should use the lowest octane level that doesn't result in knocking and be okay. In practice, I'd probably follow the manufacturer's instructions for a car I spent a lot of money on.