The Truth About Cars » oil glut http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 29 May 2015 19:00:06 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » oil glut http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com OPEC Doubles Down Against Shale, Fuel Prices Continue Downward Spiral http://www.thetruthaboutcars.com/2015/05/opec-doubles-down-against-shale-fuel-prices-continue-downward-spiral/ http://www.thetruthaboutcars.com/2015/05/opec-doubles-down-against-shale-fuel-prices-continue-downward-spiral/#comments Fri, 22 May 2015 15:00:10 +0000 http://www.thetruthaboutcars.com/?p=1071690 OPEC is doubling down on shoving shale off a cliff, continuing the trend of low fuel prices through the fall in so doing, Memorial Day Weekend aside. Thirty-three out of 34 analysts and traders surveyed by Bloomberg believe the Organization of Petroleum Exporting Countries will stay the course of 30 million barrels produced daily when […]

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Ford Mustang Receiving Gas Circa April 2015

OPEC is doubling down on shoving shale off a cliff, continuing the trend of low fuel prices through the fall in so doing, Memorial Day Weekend aside.

Thirty-three out of 34 analysts and traders surveyed by Bloomberg believe the Organization of Petroleum Exporting Countries will stay the course of 30 million barrels produced daily when the group meets in Vienna next month, the publication reports.

The reason to continue down this road is to ensure victory for Saudi Arabia’s strategy of putting shale oil producers and other competitive suppliers — notably those in Canada and the United States — in their place. Thus far, the plan is working: half of the drilling rigs in the U.S. have been idled since October, while production fell 1.2 percent last week to 9.3 million barrels/day. Global investment in production is expected to fall $100 billion in 2015, while demand growth for oil is projected to climb to 1.4 million per day over the same period.

In the meantime, fuel prices will continue on their own course. University of Purdue Wally Tyner predicts prices in all but California and Hawaii will remain below $3 throughout the summer, Forbes says. This is, of course, due to the ongoing supply glut, hovering around 485 million barrels compared to the 350 million barrels normally available.

Meanwhile, Oil Price Information Service Tom Kloza believes fuel prices will stop at $2.50 this summer before dropping down between $2 and $2.25 this fall. Tyner adds Iranian oil could cut prices at the pump by 30 cents in 2016 should a nuclear deal between Washington and Tehran lead to a lift in sanctions.

Before the prices can fall, however, they must climb a bit for Memorial Day Weekend. AAA says prices rose 5 cents a gallon within the last week, with the current average national price hitting $2.71/gallon Tuesday, The Detroit Bureau notes. The group adds motorists are paying an average of 26 cents more for a gallon of regular in May than in April.

Causes behind the rise include regional production issues in the Midwest and West Coast, as well as a rally in crude prices; West Texas Intermediate and Brent are trading for around $60 and $66 respectively as of this writing.

Despite the price hike, motorists hitting the road this holiday are paying 94 cents less for each gallon dispensed compared to last year, the lowest average since 2009.

[Source: Robert Couse-Baker/Flickr/CC BY 2.0]

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Oil Bull Market Rally Could Soon Falter Without China http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/ http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/#comments Wed, 13 May 2015 19:00:09 +0000 http://www.thetruthaboutcars.com/?p=1067698 Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time. During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in […]

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PetroChina-Station

Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time.

During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in the nation has slowed by half of what it was in the previous decade, following global trends of decreased consumption.

Global demand is expected to grow 1.3 million barrels/day to 94.58 million in 2016 according to the Energy Information Administration, with China taking 11.34 million barrels/day; the U.S. will use 19.44 million/day, lower than what was used in 2008. The figure is an increase of 3.1 percent over this year, yet pales when compared to the 11-percent jump in 2010. The spike delivered a boost to oil prices of 15 percent.

Combined with rising oil production pushing toward a glut in supply — to the tune of 1.8 million barrels/day in inventory currently, and 900,000/day during H2 2015 — China’s economic power faltering despite the government’s best efforts, and technological advancements reducing overall oil consumption, the global demand for oil will remain low for some time to come.

[Photo credit: Otebig/Wikimedia Commons/CC PD 1.0]

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Gas Prices Rising Again Behind Crude Oil Pricing Climb http://www.thetruthaboutcars.com/2015/04/gas-prices-rising-behind-crude-oil-pricing-climb/ http://www.thetruthaboutcars.com/2015/04/gas-prices-rising-behind-crude-oil-pricing-climb/#comments Tue, 21 Apr 2015 19:00:01 +0000 http://www.thetruthaboutcars.com/?p=1050201 After a slight decline during Easter, gas prices are once again climbing back up as crude oil does the same. The national average stands at $2.46 for a gallon of regular, the lowest price since 2009 at around this time, reports The Detroit Bureau. The price is a 7-cent increase over the past week, thanks […]

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Fuel Price Circa Mid-December 2014

After a slight decline during Easter, gas prices are once again climbing back up as crude oil does the same.

The national average stands at $2.46 for a gallon of regular, the lowest price since 2009 at around this time, reports The Detroit Bureau. The price is a 7-cent increase over the past week, thanks to crude oil prices climbing 17 percent since the start of April due to a combination of decreased U.S. output, ongoing refinery issues, and possible new geopolitical issues in the Middle East.

Heading into the summer, speculation points to an oil glut as Cushing, Okla.’s storage hub quickly climbs to capacity, though a recent drop in oil levels reported by commodity intelligence company Genscape has allayed those concerns for now. The aforementioned refinery issues are another factor in pricing with the West Coast remaining on the high end of the scale.

Currently, California holds the highest average at $3.15/gallon while Alabama and Mississippi are neck-and-neck for the lowest average at $2.24 and $2.23 per gallon, respectively.

[Photo credit: Cameron Aubernon/Instagram]

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Gas Will Get Cheap And Plentiful – That Other Gas Causes A Glut http://www.thetruthaboutcars.com/2013/01/gas-will-get-cheap-and-plentiful-that-other-gas-causes-a-glut/ http://www.thetruthaboutcars.com/2013/01/gas-will-get-cheap-and-plentiful-that-other-gas-causes-a-glut/#comments Thu, 24 Jan 2013 19:28:05 +0000 http://www.thetruthaboutcars.com/?p=475093 Reuters has a highly interesting oil and gasoline story. If you are one of the “peak oil” types , you may not want to hear it. As a matter of fact, it could shake your belief system so much that you scream “BIASSSSSSSS.” As a service to all our readers, we give you a chance […]

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Reuters has a highly interesting oil and gasoline story. If you are one of the “peak oil” types
, you may not want to hear it. As a matter of fact, it could shake your belief system so much that you scream “BIASSSSSSSS.” As a service to all our readers, we give you a chance to stop before it gets ugly.

So much money is made to convert crude oil in to motor fuels, that power and industry can’t afford it, making power and industry switch to other fuels, mostly gas. Motor fuels however is a low growth industry. What’s more, it could also easily switch to natural gas. The effect is an oil glut.

  • BP predicts a worldwide oil demand growth of just 0.8 percent a year up to 2030 – slower than for any other energy type and only half the projected total energy demand growth rate over the same period.
  • Transport is slow growing as cars are getting more efficient. BP’s Outlook 2030 study shows the fuel economy of new cars in the United States and China falling well below 5 liters per 100 kilometer by 2030 from between 7 and 8 now.
  • In OECD countries, transport fuel demand is set to actually fall as weak economies, a shift to smaller cars, and a move onto public transport in congested urban areas take a further toll.
  • Worldwide, gas, biofuels and other alternatives are expected to steal almost a third of what growth there might be.

Gas is already approaching a similar overall market share to oil in the world’s energy mix. Liquefied natural gas (LNG) already is a viable transport fuel, and oil executives are starting to see a point at which familiarity and availability could tip the balance away from diesel and gasoline.  Big oil players are already heavily invested in LNG.

LNG is expected to replace diesel in trucks and buses, ships, even airplanes first, before it makes a difference in private cars some decades away.

LNG-powered ships are already a reality. The first commercial gas-powered civil aircraft flight left Doha for London on Jan. 9 this year, fueled by jet fuel made from gas.

 

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