Gluttingly ‘Short Memories’

November 19, 2014

OIL PUMPOne giant story given nearly-back-burner status is this steep decline in oil prices.
Via Reuters this afternoon: ‘Benchmark Brent crude oil settled down 37 cents at $78.10 a barrel, after rising as much as 98 cents during the session. It has lost $1.31 in the past three sessions.
U.S. crude finished down 3 cents at $74.61, after a session high at $75.40.’
And at the pumps, some unfamiliar numbers — here in Mckinleyville, noted price at my local Union 76 is $3.39 a gallon for regular, a few miles south in Eureka, a couple cents more.

(Illustration: An oil pump ‘horse,’ found here).

Way-unusual figures from the start to finish. This sloping downward in oil prices has been going on since June, dropping further and further each week, creating what some consider an ‘oil’ glut, or maybe not — there’s a shitload of reasons behind this plunge, from robust production growth in the U.S. to lackluster expectations for the global economy, to OPEC churning out oil despite the high inventory, and the marvelous fracking industry in the US.
Indeed, check out the daily earthquake swarms in Oklahoma.

And in this void, comes abundance and big, a different kind of oil crisis: “It is increasingly clear that we have begun a new chapter in the history of the oil markets,” the IEA stated in its November oil market report, observing that the world’s oil supply is outstripping projected oil demand—the opposite of what was happening just over six years ago when oil prices peaked.
A bunch of countries like Venezuela, Nigeria, Iraq, Libya, they’re all about to start losing money — the House of Saud don’t really give a fat rat’s ass.

Here in the US, the land of huge and better, the drop in gas pump prices puts big back on the street.
According to The Economist, Americans ride the wave, even if drowning might be involved:

This has resulted in a shift in buying patterns among American motorists over the past year.
Since the financial crisis, smaller and greener cars, such as the Toyota Prius, a hybrid, had been rising in popularity.
But in recent months, industry statistics show that the sales of larger pickup trucks and sport-utility vehicles (SUVs) have been starting to rise again.
Carmakers have been busying themselves re-launching classic cars, such as the Dodge Challenger and the Ford Mustang, to meet renewed demand for gas-guzzling vehicles.
Most industry experts credit the plunge in fuel prices for this change.
American car buyers have “short memories,” and base purchases on today’s fuel prices rather than future trends, says Stephanie Brinley at IHS, a research firm.

And can’t see very far, either.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.