Oil is going to $100! No, it's going to stay at $50! Wait, it's going to fall to $10!

There are a lot of predictions out there, with a wide variation. I don't see either extreme ($10/$100) happening. I think the price for the next few years will be a lot closer to what it is now, perhaps a bit lower.

OPEC showed that they aren't as smart as they think they are. The US fracking industry showed that it is a lot more resilient than OPEC (mainly the Saudis) thought it was. The more OPEC tries to jack up prices the more fracking will take place to take advantage of those prices. Which will keep prices level.

Remember "Peak Oil"? We blew past that. Now there is talk of "Peak Demand". More EV's on the road and increasing fuel economy means less demand for crude. Less demand for crude + increasing supplies = lower price per barrel.

The net result? Operating a diesel truck is a lot more economical than it was a few years ago. I suspect that the big 3 will see higher sales of diesel trucks than in the past compared to gas trucks. The jury is still out on diesel in cars (see: VW).

I think it's a great time to drive a diesel Superduty, over the next 5 years for sure. 10 years? My crystal ball doesn't go that far.

What say you?

Caveats: no major wars or significant disruptions in the Middle East, Trump lasts more than 4 years and no spike in global temperatures.

 

I am in now way an expert on oil, but my understanding is that a LOT of the oil we have in North America is not cheap to extract from the ground with a break even point for a lot of it is $75 a berrel.
I think $75 to $90 is where things will level off. If they do, I believe crude and retail prices will stay stable for a LONG time.
I think also, as much as I want to see fuel prices low, having them high enough that everyone has at least one high MPG vehicle, be it gas, electric, or hybrid will be better for the economy AS A WHOLE.

 

That's what the Saudis thought also and it may have been true 5 years ago. But the fracking industry in the U.S. has become much more efficient and the breakeven point is still coming down.

A February, 2016 Bloomberg article has this to say:
I will agree that prices are going to be stable for quite a while, but I'm a bit more optimistic on price. That said, low prices are a problem for parts of the U.S. economy. My wife works for one of the majors and she's already been told that her job will end at the end of 2017.

More high fuel economy vehicles on the road may cause "Peak Demand" to arrive earlier. I don't see that as a bad thing. I've been keeping my eye out for a good EV that will get me to work (and back!).

 

While I am not a Trump fan, one thing I will say I do agree with his his view to ween the U.S. off of the dependence of Oil from OPEC so we arent at their mercy. Yes there would still be some importation from OPEC but if Trump gets the percentage down then the U.S. is not at OPEC mercy.

Honestly I like the idea, I think North America needs to get away from OPEC, they havoc they have caused with this last squeeze put a lot of people and companies out of business. Was their some needed attrition in the energy industry sure, but there is far too much power in OPEC hands then I would like.

Oil will always be up and down and the price of gas as well, but I am sure the energy companies would all like to ween us off Opec oil to as it is better for them and their profits but then they can better withstand OPEC yanking our chain whenever they feel threatened.

I have heard people say, big trucks that use a lot of gas and diesel are going the way of the dinosaur? Really could have fooled me the way that truck sales are going and that dealer lots are still full of them and used trucks are being priced at a premium these days

 

Petroleum is not just the gas and oil we use in our trucks, it's used for a LOT of things. Think of all the things you buy and use every day that are made of plastic. Or nylon and synthetic fabrics and materials. The fertilizers applied to our crops, the medicines we get from our doctor, the shingles on our roof. Even the roads are made of asphalt.

Energy prices directly impact the price of everything we buy, from farm to food on our table, the cost to heat and cool our homes, whether electric or natural gas or heating oil. This is why when some chucklehead claims we need to raise taxes on energy or energy use they need to be strung up (politically speaking, of course).

Petroleum use isn't going away anytime soon, there simply isn't a viable alternative that packs as much BTU (energy) and at a reasonable price. Nothing else even comes close.
Coal too, is good stuff. America is the "saudi arabia" of coal, we have some of the largest reserves on the planet, hundreds of years worth, and we don't have to send our money overseas to buy it from people who want us dead.

It's important that we keep energy costs low, for everybody but especially for folks who don't have high income. It would actually be pretty inexpensive to live in this world if it weren't for all the ******s ****ing everything up.

 

Oil prices may go up and down but the taxes on fuel will always go up. PA has the highest fuel taxes in the nation and Jan 1, 2017 Pennsylvania will hike it another dime. Happy New Year!

 

Bingo. Until we have a standardized fair consumption tax system, nothing will be fair and equitable. The business side of oil can work domestically but our state and fed tax system will continue to keep us under the "thumb".

 

The price of oil will rise again, and fall again, and so on and so forth.

The United States is a net exporter of crude oil. Meaning, we export more than we consume nationally. As the push to become energy independent continues, initially the supply will drop as we pull out of the world market, pushing prices higher, and then production will ramp up to meet it, and prices will fall a bit and stabilize.

As other posters have pointed out, gasoline and diesel fuel aren't the only products we get from crude oil. Hybrid cars have a minimal effect on national oil consumption. We won't be getting away from it any time soon.

Higher prices per barrel of oil are also historically indicative of a stronger economy. Low gas prices sound great to the simpletons, but they have no clue about all the detrimental impacts that low oil prices have on an economy. Higher commodity prices with more employed people to buy them is better than lower commodity prices with fewer employed people to buy them. And those that are employed will be buying less, because an economy with a dismal outlook will cause them to be miserly with the money they do have.

 

I specifically left out the issue of taxes on fuel in order to keep the topic focused, but it is not something that occurs in a vacuum. With the lower prices of fuel many states are considering higher taxes because they think people won't notice it. I travel into Wyoming a few times a year. I used to wait to fill up until I got into Wyoming and then filled up as I exited. Not any more. Wyoming raised their fuel tax high enough that their fuel is now at or higher than what I pay in Colorado (where I live).

EV/Hybrid cars are certainly a small percentage of the overall population of vehicles. But each year the number grows. I think that is a good thing for fuel prices, but a bad thing for tax revenue. There are a lot of EV/Hybrid owners that are getting away with "highway robbery" because they are using the road almost as much as I am but paying almost nothing to do so. Colorado is experimenting with a mileage tax for that class of vehicle. We'll see how that goes.

States need tax revenue to keep the roads in good condition and I'm all for paying my fair share. Prove to me that you're making good use of my tax dollars and I won't complain.

 

States are notorious for diverting road tax into things other than highways. Big pile of money, it's just too tempting.

 

Funny thing about the oil and gas business. No one is great at predicting what will happen with this global commodity. With new American discoveries of vast deposits of oil just waiting to be tapped, OPEC can't do much. TODAY if WE wanted we could kick them to the curb, but it's still cheaper to buy from them. I seem to remember that we lifted the embargo on selling oil globally and we actually were starting to sell to foreign countries. The LNG pipeline project in AK is aimed at selling LNG to Asia (If it ever gets built). IOW, it's a different world today in regards to oil than it was even 5 years ago.

Oil prices go down, sales of small cars and EVs goes down, trucks and SUVs go up. Prices go up and that trend reverses. I agree that it is a good time to drive any large vehicle.

We do a lot more with a barrel of oil than just make gas and diesel as any of the guys/gals here in that business can tell us - but the price driving a barrel of oil is how much fuel we burn as that makes up most of the barrel of oil. Without that demand, $10 a barrel is possible (which means it's unlikely anytime soon, IMHO).

If we remove "war"/ political instability from the equation, I think we are at the status quo. An ebb and flow of $40 - $60 a barrel oil. All it takes is some disruption and we'll see $100+ a barrel oil again. And you KNOW that every company out there is just waiting for the excuse to do so.

Speaking of taxes AK wants to triple the fuel tax... Which to .24 a gallon wouldn't be bad, except that we already have one of the highest fuel prices in the nation.

 

That's the problem in Ca. Every time the state overspends they find a tax base to rob and then state that that base is going broke. Sorta like the Feds robbing S.S. and then stating that it's unsustainable. If S.S. was used solely for its stated purpose and people that paid into it, it would be a cash cow and thus the problem. Politicians can't tolerate seeing any money accumulate that they can't spend on their pet projects.

 

I think oil will be range bound at 45-60 for some time. I thought the US was a net exporter of oil at this point. But then there is oil and then there is oil, the refinery jockeys can tell us more about that. EV's are a long way from the power density of fossil fuels and the "recharge" speed of either one. While US might not buy OPEC oil at some point the price is still set by the world, not the US, although it's priced in US$ so if the $ wasn't as strong oil would be higher. Same as gold, US priced, set by the world.

We're getting a carbon tax up here on fuels, it'll also get taxed on top of that due to tax layering. While it's intended for certain projects like global warming you just know the gov't will take it for general usage when they need it.

 

Social security was busted out waaay back in 1968, a stunt pulled by congress called the "unified budget".

 

If you believe the U.S. EIA (Energy Information Adminitration) - In September of 2016 we exported an average of 692 - thousand barrels of oil per day and imported 8,057 - Thousand barrels of oil per day. I'd say we have a way to go to be a net exporter. And that was just crude oil. Not refined products.

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Gas will get taxed when low and then when it shoots up in price again, we'll see $8 a gal. gas. That'll kick start the small car and EV sales again. It's how government policy shifts the population to do what they want them to do. Even though we don't want to change.