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elcheapo
Senior Advisor

Oil market.....a discussion

Black gold, texas tea......we've come a long ways from jed shooting his long gun and hitting oil.  Today, we find it buried under

the middle east, thousands of feet under under the sea, and now, we squeese every bit from a well by injecting it, and

forceing what little is left to the surface.....then the oil sands..

We have a hunger for energy...or oil and it's products.  Here in the states we love our suv's that get about 18 to 22 mpg on the

highway at 75 mph....

i'm not saying the u.s. is the blame for all of the demand, europe, with it's no speed limit highways.....but when we look

at china, india......they are now just getting the taste.

 

The question is tho....not so many years ago, we were told of "peak oil"......and even in a lessor time, look how high oil soared, so

now, how are we down here looking at $20 a barrel.........a price not seen for years........

 

has demand declined that much ?.....yes, people have cut down on their driving, but i feel in my gut, not that much.

The use of ethanol ?  Has this accounted to that much of a decline in demand......maybe if we mix out 10 to 15% of the

gas of every gallon...remember we did this for seveal reasons, first, as a market stabilizer for the corn industry, we also

did it as an environmental way, and lastly, a security measure, so we would not be so dependent on oil, that could drag

us into a difficult situation.

 

Does all of this show how efficient we have gotten......when oil was high, we could afford to extract oil from old wells, or

squeeze it from oil shale, and spend billions of dollars to build piplelines that reach for thousands of miles.

 

I remember a few years ago, when the would economy was going sour, the folks in the oil producing countries, opened

the valves wider, and helped pump more oil, to bring down the oil prices to help the economy.......help cut operation costs

etc, etc.......today, we have not hurd of such a thing........it seems that oil is the buzz word, and how it might be leading things

lower........so what about just turning the valve close a little.

 

but perhaps one could state that the economy could not stand a raise in energy prices, the economy is so down that we

must cut costs....we are on almost record lows......and yet that isn't helping the economy ?

 

i'm told on the markets, on each trade, there is a winner and a looser, so to speak.........so we've seen oil going down, so

the question is, who is making all the money ?  what about the airlines.......transportation, such as fed ex and ups, this should

be a boom for them.......and oh yes, what about the local trucking companies ?  I've made a few inquiries, and it seems that

the transportation of grain has not went down that much, if any, since fuel is down.

 

would one way to cure our woes, is to see oil take off like an airplane ?   remember a few years ago, how oil was going up,

and there was no FUNDMENTAL reason for it at such lofty levels......it was all done by the seculation bunch......no

questions were asked.

 

would it be so simple to get the speculators on board, and have them go to town ?  would raise things world wide, would raise

the stock market, along with the commodity index, and help out oilpatch usa ?

 

 

but......i guess one could say that, we have energy at rock bottom lows, and it is one of the main things in our economy, and

if it is this low....how else do we spur the economy ?  oil rock bottom, interest rates, almost zero........just what else can you

do to stimulate ?????

 

or is the oil industry just like farmers.......we are too good for our own good.......we are producting more and more oil......yet

that is the worse thing for the industry.

 

same for the grains......we produce more and more and our income contintures to decline.

 

can we become too smart for our own good ?

 

can we become too efficient ?

 

 

what's your thoughts, or insight into this ???

 

 

 

 

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9 Replies
giolucas
Veteran Advisor

Re: Oil market.....a discussion

I think we now live in a TIME where this new generation is  fine with not owning a house and not owning a car.  They are fine with renting and using uber to get around.  Mentalities have changed and our world has also changed.  

 

Things are different to say the least.

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clayton58
Veteran Advisor

Re: Oil market.....a discussion

I was going to start a new thread for this, but it is related and hopefully won't hijack yours, but here goes.  I heard today that oil was down on the heels of a gov report showing larger than expected or something like that, gas and diesel stocks.  Well i got to thinking about how tfarmers regard the gov reports  of grain production, stocks, etc. and I wonder if the gov energy reports would fall under suspicion as well?  If one was into conspiracy theories, it would not seem too much of a stretch to think the gov. if taking on what had been two of the brightest spots in the economy.  

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Hobbyfarmer
Honored Advisor

Re: Oil market.....a discussion

If you think people are driving less you need to get out of the dessert of NW Kansas.

 

You should have been with me yesterday on my little road trip nw of Minneapolis, Mn and back. About 650 miles round trip.

 

Absolutely no shortage of vehicles on the road. Saw several miles long parking lots, luckily for us it was always on the other side of the interstate yesterday.

 

Only saw one field unharvested and it was a field of beans right at the Wright /Franklin county line on I 35.

 

About 70 miles of the interstate between Des Moines and Minneapolis needs a 3rd lane added to it. This is fly over country.

BTW we didn't see even one pink mustache on any car. 

 

Saw steam rising from many E plants, and grain semis on the move on the side roads. The grain piles by the elevators we could see from our route were all covered.

 

Saw one guy spraying liquid poop on a field right on the south side of the  Ames Iowa waste treatment facility. 

Saw another guy spreading what was probably chicken litter north of Ames a ways. On the  opposite corner of the field from where he was spreading was a group of about 10 pheasants picking through it. Everything north of Ames Iowa was a winter wonderland of snow cover.

 

Near as I could tell yesterday the posted 70mph speed limit signs are just a suggestion. 

 

The 6 to 9inch snow they got from Ames Iowa north created a lot of economic activity last week. At least if you owned a tow truck service that is. All but one or two of the tracks in to the snow were in the center median, you know it is a God given RIGHT to be able to pull in to the passing lane on snow or ice and drive too fast and above your abilities. Lots of stupid tax was paid last week. 

 

Based on what I saw yesterday, the next winter weather event and  they'll do it all over again . History sure has a way of repeating it's self.

 

More traffic in just a few miles at one time yesterday than you will find on 300 miles of hwy 36 in northern Kansas.all day. Maybe it'd been better if I'd had some ice cream and sprinkles mid afternoon? 

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Hobbyfarmer
Honored Advisor

Re: Oil market.....a discussion

One other interesting thing we saw yesterday afternoon as we were southbound was the seven or eight new Deere s680

 Combines northbound on I 35  

 

Wonder how far north or west they were going. Someone's planning on on a bountiful, profitable crop.

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lsc76cat
Senior Advisor

Re: Oil market.....a discussion

In MN the first 10 mph over the speed limit are "free".

It is considered a secondary offense so not enforced much.

You can cruise along at 8 or 9 mph over the limit and be just fine.

 

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booked
Veteran Contributor

Re: Oil market.....a discussion

elcheapo

 

Did you catch this yesterday      http://www.agriculture.com/videos/v/112513698/the-engine-is-broken.htm

 

Personally I am a believer in conspiracies theory. We are told that every tank is full of crude and or refined products. Some government report will confirm that. But in my opinion if tomorrow we were to wake up to news reports that Putin of Russia and or Assad of Syria were some how GONE out of power. I believe that the puppet masters that pull the strings of the worlds politicians and the currency and commodity markets would send the price of oil up........................... This oil thing is a ruse to put Putin out of power.........It is just history repeating, happened at least once before in my memory and that was during Reagen's presidency and it helped break up the USSR.

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Doug N
Veteran Contributor

Re: Oil market.....a discussion

To Hobbyfarmers thought, I live in an area where there are 20,000-40,000 acre farms that trade those machines every year.  These are farms that own more than they rent by a good margin, land that was mainly bought 1970-1990.  These commodity prices have less impact on them, much less.

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elcheapo
Senior Advisor

Re: Oil market.....a discussion

thank you book, no i didnt look at that video.  i typically dont look at video's since they take a while to load, etc.

yes, it was interesting, mr. shelladay did cover a couple of things.

I think we are all in agreement, the engine is broken, and needs to be fixed.......but much like in rural america

you being in a vehilce everyone gathers around and try to figure out, what is wrong.....and how to fix it.

 

i really havent read much on how to correct things......the people that "could" keep saying there is no problem.

 

i'm really running out of ideas on how to get things going........oil is cheap, natural gas is cheap, commodities are cheap,

most raw materials are cheap, raw iron is cheap.........all the "ingredients" are cheap......money is cheap......so what

else can you do ??????????????

 

someone, somewhere is making money with the low cost inputs.

 

so, what do you do........a raise in oil, will cut into margins........its' a catch 22

 

i'm told jobs are up........but i have a "feeling" that more and more people are loosing their

jobs........our local food bank is really hurting and more and more people are needing to turn to them

for help.

 

raise commodities, again, cuts some margins.........but would sure help the ag and rural economy

 

with record low commodity prices...and i havent seen stuff go down at the store....who's making that big margin ???

 

we keep saying oil is draging things down.......but do we dare WANT oil to go up ?

 

i'm afraid this "engine" has blown up....and will cost alot to fix, and some parts may no longer be available.

 

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sw363535
Honored Advisor

Re: Oil market.....a discussion

Clayton58,

 

That was a good thought.... Compared to our reports and info,,, and the independence of those involved , we have it pretty impartial compared to the energy field....

 

We live with the promise of overproduction all the time, can you imagine what would happen if there is evidence to show that the petroleum industry has only tapped 15% of the reserves available in russia and the middle east and has new technology that allows oil and gas production on the ocean floor at a reasonable cost.... 70% of the earths surface...untapped.. and there for the future.

 

The whole industry operates under the need for limited supply.  Not to mention that we have a highly advanced culture based on the future extinction of that industry..

How many lives and dollars would be spent trying to suppress or deny that evidence...

 

One thing about disinformation,,, once it is spread and beleived,, it is very hard to unring the bell.

 

In the area of energy and governing, I think we have grown comfortable with "conspiracy" .... whether brought on by economic necessity or the manipulation of computer modeling --------- or many other things used to prove an opinion...

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