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And the law of supply and demand suggests that can only mean one thing: higher prices are on the way for crude, and for the diesel fuel, gasoline and heating oil that are produced from oil.
Major oil-producing countries led by Saudi Arabia and Russia have decided to slash the amount of oil they deliver to the global economy.
“Higher oil prices will inevitably add to the inflation headache that global central banks are fighting, and higher oil prices will factor into the calculus of further increasing interest rates to cool down the economy,” he wrote in a note.
That would exacerbate an energy crisis in Europe largely tied to Russian cutbacks of natural gas supplies used for heating, electricity and in factories and would send gasoline prices up worldwide. As that fuels inflation, people have less money to spend on other things like food and rent.
originally posted by: DavidsHope
My son is an owner operator. He just ordered a brand new Semi. The cost is unbelievable. Still, I called him just three days ago to see how the order was going. Will take 5 weeks, Hes driven for 25 years.
That said, I asked him about fuel cost and availability and his opinion of the future.
He said that he has no illusion that fuel will be expensive, but that cost is passed on to the consumer....always.
Second, he said that fuel is available almost everywhere and probably will be.
Third he said he would never go into such debt if he thought the future of trucking was in jeopardy.
and Fourthly: He said that the fuel will be available for truckers, and trains as well until no fuel is left. Your cars may run dry but the diesel will be there until no fuel is there at all, and when that happens. We all go down.
What he is saying is like fuel rations. My son hauls food grade products.
He will move his truck until no trucks can run. so the whole thing is supply and demand. If diesel becomes scarce, trucks and trains go first and cars and non food grade trucks go last.... For diesel and gas. Forget those beer trucks hauling if diesel is scarce. Medical, law enforcement, and emergency services will also go first.
So I agree and disagree with first hand knowledge.
Further I agree 100% with you about....
People who are prepared will stand the storm much better. If you have not yet stocked up. Do it right now. Because come January forward we got trouble. Get an old monopoly game. Some cards, dice, Yahtzee games. Sleeping bags that go down to 15 degrees or better.
A storm really is coming We just don't know how bad the storm will be.
originally posted by: andy06shake
a reply to: musicismagic
originally posted by: CriticalStinker
a reply to: musicismagic
So I want to start by saying your thread isn’t without some points that need to be considered. I drive a diesel and can say the prices are rough. So I’m always aware of them and know what it means for logistics.
But your numbered points just kind of bounced around and often were unrelated while not providing the logic behind them much less sources.
We just went through a perfect storm… OPEC+ had a trade war right at the beginning of COVID, and we saw oil futures go negative, meaning you could get paid as long as you took physical possession of oil. American producers lose money when oil drops below $30 a barrel which it did for quite some time. They slowed and stopped some production, and deferred future plans including refining.
We had 2 large refineries go offline, one in Philly due to an explosion and another in Louisiana because of Ida. The oil companies are making record quarterly and yearly profits since prices have climbed up, but some of that is to satisfy losses from the years prior. So they’re in no rush to address the current refining disparity.
It’s going to be hard to pressure US companies to bring back refining capacity when they can’t expect to make a return unless they run a 40 year operation. And we could all say that’s purely political with right vs left, and that certainly plays a part big or small… but I’d venture to guess they’re more concerned with global trends in renewables since oil prices are global, and geopolitical events that could spell world war.
At the end of the day almost all oil companies are publicly traded and are by law mandated to make decisions in the fiduciary responsibility to share holders. It’s a feature and a bug. Sometimes it protects our stock market but hurts main st. They’re acting out of self preservation.
But as far as shipping is concerned, they’ll focus on goods people will still pay increased prices for. So people will pay 20% more for necessities and trim back on luxuries. The trucks will still keep rolling, and seeing as there’s a driver shortage already, I don’t anticipate their industry is in risk of dissolving.
It’s certainly bleak though, and again, your thread isn’t without points even if they have to be sifted through.
Whoever orchestrated the downfall of modern civilization
The US now has just 25 days of diesel supply — the lowest since 2008. Here's why that's more alarming than a dwindling 'oil piggy bank'
originally posted by: CriticalStinker
a reply to: musicismagic
Island life for you is certainly different as you all have always relied on imports.
On the flip side though, there is one saving grace, and that is the distances for transport aren’t as long. A lot of Japan’s population is dense, and I’m sure the linehaul drives are very efficient given the culture there. I imagine there is a pretty good diversity of ports as well.
That’s not to make the matters seem insignificant as they are pressing for you all as they are for us. I’d be interested to know the average miles or kilometers for most goods in the US vs Japan, but I’d hope it would be a fraction for the latter.