re: Gas Price Question for you O&G folks

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Do you understand how supply and demand works?

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I would expect a closer relationship between oil demand and gas demand. That's why I'm confused.

Seems the answer is refining capacity has driven gas demand far beyond the demand for crude.

Everything costs more than it did in 2014. The workers cost more, the equipment costs more, the transportation costs more. That's what you're overlooking.

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Inventory is lower than it was in 2014, both in terms of crude and refined product.

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Winner, winner, chicken dinner.

Also take into consideration the cost of electricity. Just as your electric bill probably went up $100 this month by entergy refineries also have to deal with it. Even though refineries use steam to turn turbines with electric motors as back up the monthly electric bill at a refinery is astronomical. Also add the cost of supplied hydrogen, steam, some catalyst for a cat cracker, etc. Refineries are designed to be efficient but still have to deal with rising costs to operate and keep the lights on. There is also shipping cost to deal with that have increased to get it to the pump. The shipping of gas and diesel is also a factor. Ocean going ships, local barge companies, trucking companies, and the railroad have also increased prices

The oil futures and spot oil price in 2014 were much lower than the oil futures and spot prices today. The information in that tweet is just wrong. The crude prices were not the exact same.

In 2014 oil futures were around $100 in Jan 2014 and dropped steadily throughout the year to $50 per barrel at the end of '14.

The current oil price as well as futures are almost $120 per barrel. That is 20% higher than the beginning of 2014 and almost 2.5 times the price of oil at the end of 2014.

Also average gas prices followed that trend. The price per gallon average of gas at the beginning of 2014 was north of $3 per gallon. By December the price as $2 flat per gallon. These numbers reflect the price of oil going from $100 to $50 during the same time.

The current price of oil is 2.5 times the price of oil in December 2014 and the current price of gas is about the same 2.5 times the price of gas in December 2014. Even ignoring the factors of distribution and refining adding costs that aren't the same as in 2014, these numbers seem very reasonable and normal to me.

Dont believe what you see on social media, look it up yourself.


WTI Crude oil prices and futures chart history

Avg gas price history chart

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I know there are many components, as you've shown, but which of those components are accounting for a 40% increase given the same crude price?

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Refining capacity in this country and across the world has decreased the last couple years for a number of reasons.

There’s a huge part of the equation.

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You realize how many trucks are running g to rigs daily spending 6 bucks a gallon for deisel

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Not remotely enough for his post to be true lmao

Nothing you say will convince this clown that we aren't being gouged. He's a perpetual victim.

Im talk 18 wheelers. Sometimes you could have 30 trucks roll in a day delivering something or another. Cost of all the small moving parts are going up big time. Vast shortages of equipment that are keeping rigs from completing wells under budget. Yea if they hit good well that becomes chump change. Its still a gamble and not all produce like others.