January 19, 2016

texas-oil-rigOvercast and gray this Tuesday afternoon on California’s north coast as real-rain has given way to misty drizzle and sparse sprinkles — the big storm supposedly for today was quiet for us along the shoreline.
Forecasters call for a slight-period of semi-dry until Thursday.

In another type respite, yesterday I put $20 worth of gas in my Honda Accord, paying $2.79 a gallon for regular at a Union 76 in Eureka — the same price as here in Mckinleyville, though, not the cheapest (that would be in Eureka at Renner Petroleum at 2.57 a gallon — don’t count Costco at 2.49), and the fuel conflict heightens.

In Michigan, a gas-station price war drove the pump numbers at one location down on Sunday to $.47 a gallon — Patrick DeHaan, senior petroleum analyst at GasBuddy.com: ‘“This is something we don’t see often at all or ever. That’s unheard of.”

(Illustration: ‘Texas Oil Rig,’ by Amanda Vick Roach, found here).

The situation is going to get ‘heard‘ more often in the future. In my particular case, today would have been two months since I’d put gas in my car — insane, but I’m not ‘normal.’ As a retiree, I take my car to Safeway, and if not raining I walk, and don’t go anywhere else. I really don’t want to go anywhere.
But the vast-vast amount of vehicle drivers aren’t anywhere like me.
So they’re benefiting from a crazy worldwide; down-sliding oil narrative, one that doesn’t seem to have an end, with the International Energy Agency reporting oil prices will tank further in 2016 due to maybe people like me, staying home or something — creating low demand — that coupled with a warm winter, and all tethered to a crude glut.
Drama of industry:

The organization, which advises countries on energy policy, said in its monthly report Tuesday that global excess supply may reach 1.5 million barrels per day during the first half of the year.
“Unless something changes, the oil market could drown in over-supply,” the IEA said.
U.S. crude prices have fallen 24 percent since the beginning of the year.
Benchmark U.S. crude fell $1.03, or 3.5 percent, to $28.39 a barrel in New York on Tuesday.

As this little downsized bubble bursts, there’s more to it than just economy/jobs, but creates an even-more shitty Middle East.
From OilPrice.com this afternoon:

Texas saw its revenues shrink by about 50 percent in 2015.
But unlike Alaska, where severance taxes make up nearly three-quarters of state revenue, the more diversified Texas only gets about 11 percent of its budget revenue from severance taxes.
Revenues in North Dakota fell by more than 60 percent in 2015 compared to a year earlier.
Production has largely held up in North Dakota, despite the sharp fall in rig counts.
Still, the state’s budget is suffering from the downturn.

And the sanctions-removal for Iran last week has added fuel to a horrific-beheading fuel-fire:

Iran has oil tankers loaded with 50 million barrels of crude ready to depart, although the FT reported that satellite imagery showed that none had departed as of January 18.
Still, Iran’s assertive approach to returning to the oil market is straining relations between Iran and Saudi Arabia further, if that is possible.
OPEC members warned Iran would sink oil prices further. “Anyone who will introduce more supply in current situation will make it worse,” UAE energy minister Suhail bin Mohamed said.
Iranian officials responded that prices will remain low until a “logical consensus to manage the oil market” emerges, a dig at Saudi Arabia’s current strategy.

A ‘dig‘ at a shallow well full of water…

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