Thursday, February 12, 2015

WTF's Happenin' to the ERL - Part TOO

About a month an a half ago I penned a screed about the plunging price of oil at the pump.  Since then, gasoline - which at that point was just dipping below a dollar-a-litre, took a further dive in January to a low of, in our little community,  0.81 cents per litre. It seemed for a day, or so, that a 'reign of happiness' had fallen upon us. Then the price, almost imperceptably at first, started to millimeter itself back up. A road trip that cost the better part of $200 in gas last summer, was a bargain at $120 just at the end of January.  And then ... and then   ... and then .....

And then the price of a barrel of oil on the world market, blipped, almost overnight and for no good reason at all, 'back up' to the $40 US mark.  That necessitated an overnight .13 cents per litre 'adjustment' at the pump. A week later, and this time without another hike in world price, the pumps started charging 7 cents more.

So now in mid-February the gas price is set to crest $1 per liter  - probably because the Canadian dollar is worth 81 cents  in the ' land o' the free, home of the brave' and gas prices, to maintain the "traditional bulk price differential", have to be almost 2 times higher for litres, than Billy Bob and the swami-haters pay in gallons (US).

A remarkable thing that I, a user of 'premium grade' gasoline, have noticed, is that the price of diesel fuel seems strangely unaffected  by all the Saudi shenanigans - and, given that - in the oil-cracking business - the 'cheap stuff' comes off first with less effort, so should the price of home heating oil and aviation fuel remain as drivers of the profit margin, while the oil industry 'takes its bath' in reduced gasoline revenues.

I'm still trying to figure out which aspect of dementia might have driven the Saudis - who market the most easily-produced oil on earth -  to go 'mano a mano' with the producers of the dirty, expensive stuff that drives the world price higher,  in order as we've been told,  to  'put them out of business'??

It just beggars the imagination that the heads of OPEC would choose this route to punish Putin (who hasn't done anything, lately, to them - even supporting Assad or the Ayetolleh)  let alone mess up a $100+ a barrel 'good thing' they've had going for a long while.  I don't care if their economies are predicated on $45 a barrel. It used to be we in the west squawked whenever OPEC tried to get 'their due' out of  'our' oil investments, but now we're grousing because the 'cheapness' is affecting our cash flow?   We just can't catch a break?

                               Buy Alberta - it ain't noways as scary
                              or as cheap and it won't need as much subsidy

At a similar rate of increase should the world price of oil ever again get near the $100 dollar a barrel mark - and why shouldn't it?  There's even less now than there was last summer - the price at the pump should get to an even $2.00 .... right where the oil producers panned it would be  .... on its way to  $5.

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