GAS PRICES

The nation’s average price of gasoline has fallen for the third straight week, declining 0.6 cents compared to a week ago and stands at $3.03 per gallon, according to GasBuddy® data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country. The national average is down 8.9 cents from a month and is 36.7 cents per gallon lower than a year ago. The national average price of diesel has decreased 2.1 cents in the last week and stands at $3.608 per gallon.

TRUMP WAS RIGHT AGAIN.

AMERICA IS WINNING

I am glad.  
But I have been building a decent-sized long position in energy of all types.   I have been long Nat Gas for a few months now and it has been phenomenal.   
But I am also long oil futures and that sort of thing.  
Oil/gas is very complex and dynamic.  I know we have discussed this before on here.  But I would caution about exactly how much Trump gets credit for what has happened and what might happen.  There are certainly some things he can do, as he did before and has started doing now. 

But the seasonal shift and potential demand looks decent, especially if the economic outlook for travel looks good.  
The Northern Hemisphere of course sets the pace for this.  
But if it looks to be a weird year or things shift, I will just have to tighten up the stops.  But for sure the Nat Gas has helped to offset any misdirection I see in the oil/gas setup.

But as I always say, when things are bad the man in charge gets the blame; so, he should get the credit when they are good.  

@Raiders22

 Gas prices fell for the fourth straight week on Monday and are likely to continue sliding below $3 per gallon, according to experts.

(REPORTED BY NEWSWEEK.)

AMERICANS KEEP WINNING.

@cdog8043

 Yessir.  Looking very good. 

Shangrila almost 

I was paying less than this for a large percentage of Bidens gig and more than this under Trump before...so how can you give credit for pump prices when the events of his presidency have not even cycled through to the pump yet?

And not sure if you caught it but some of Trump's mega fan fracking pals were stating that oil under 80 makes fracking unprofitable as I and others have stated numerous times over the years here.

So do you want fake drill baby drill via fracking with oil over 80 or do you want cheaper gas via recession fears as that is the fastest way to hit oil prices and we see that in the drop in markets and oil recently.

enjoy your pennies on the dollar while trumpy destroys peoples 401k's.  The brain power of magas never cease to amaze

heres a maga conversation at the dinner table

guy maga:  honey our 401k retirement plan dropped big time today, so were gonna have to eat squirrels a few times more a week, but good news thou, i filled up the truck at the gas station and we save 1.90 on the fill up.

woman maga:  no problem honey and dont worry about the 401k, we both can just keep working into our 80's.  Only thing that matters is those gas prices, cause that means ,Gods second son is winning and bitch slapping all those liberals who bad mouth him.  They should all be sent to gitmo

What the frack are you talking about ?

eating squirrels ? That’s crazy . 

During Trump's first presidency average yearly gasoline prices peaked in 2018 at $2.74 a gallon. Within 6 months of Biden in office gasoline prices are as high as they are now.

@cd329

 Whining and complaining as usual.

You need some stock investing assistance.  I won't even charge you.

@cd329

 Hey, cd - forgot to mention - preaching fear and doom won't get you far in life.

As a matter of fact, it has the libs going in reverse.

@wallstreetcappers

 The weed industry in CA has been going through his influx of business/product when the flood gates opened. Prices eventually crash when there's too much product (or taxes), the fat gets trimmed, the butter churns and those that can churn eat b(u)etter. 

@BigGame90

 The problem with low cost producer narrative is there are high fixed costs to fracking and fracking is that imaginary drill baby drill nonsense Trump yammers on about. Most people have no clue what fracking is or how it is done or the costs to frack. Most people like 5 second mindless catch phrases which require no investigation or intelligence. I would bet 75% plus of the population think that drill baby drill means traditional O&G processes and do not know that fracking is completely different with a much higher fixed cost of production.

So the concept of low cost producer cannot apply when there are fixed costs which are not able to be reduced or minimized. 80 buck crude is required for this scheme and that means gas prices over 3.25 at the pump...so what is the choice?

@wallstreetcappers

 obviously the answer is more subsidies. Maybe all the bike lanes these major cities are adding (while taking away parking) will fix everything. We will become a bike nation! Then, nobody will need automobiles. Am I right. Oh, bring back horses! At least we only need to worry about food and picking up shit.

Think it's pretty clear that pricing (in practically everything) will not get back to pre-covid days. Those days were gone once we shut production and turned that sweet sweet printer on.

https://oilprice.com/Energy/Energy-General/Oil-Majors-Pursue-Projects-with-30-Breakeven.html

Improving drilling and cost efficiency have allowed oil companies to eke out a profit at much lower oil prices. According to J.P. Morgan, U.S. drilling and fracking costs have declined 36% since 2014, significantly decreasing breakeven points for many producers. For instance, JPM estimates that EOG Resources (NYSE:EOG) can earn as much from oil priced at $42/bbl today as it would have from $86/bbl oil in 2014.

Meanwhile, in Europe, Shell Plc. (NYSE:SHEL) and Equinor ASA (NYSE:EQNR) are pursuing projects with $25-30 per barrel break-even, while France’s TotalEnergies (NYSE:TTE) has set an even more ambitious target to get production costs under $25.

https://www.hartenergy.com/exclusives/us-shale-basins-boast-54bbl-average-breakeven-price-204563

The issue is not just costs and profitability, but how soon the investor payouts start and the likelihood of future restrictions.

The generally accepted break even price for oil projects is about $55.

The last I saw the on-land ME price break even was about $27.

Non-OPEC slightly less than $50.

Deep water around $42 and shallow about $5 lower than that.

NA shale is consistently around $50.  The variance in the different basins will have a wide range.  But are still under $60 at the high end.

Sands are the highest at close to $60.

Another issue is not just that the USA produces the most oil — it is the type of oil.

That is part of the reason that partnering with Canada works so well.  Even if they essentially blend the two to get the more Saudi type blend it is a good partnership.

The issue will continue to be that the USA lacks the refining capacity for the oil it produces.  It has been nearly 50 years since the USA built a moderate sized refinery.  So, the majority of them still are not designed, or refurbished for the light blend.  That is why the USA essentially exports the light blend and uses their refineries for other’s heavier blends.

But the oil industry is very dynamic and is very innovative.  So, even with lower prices the profits will be there and may even be at even lower prices with advancements.

The problem is still with the availablity and viability of leases.  Biden would brag about allowing more leases — but that was not the full story.

Then you have the abuse of the Antiquities Act by Obama and, even more so, by Biden.

Then you have the anticipation of restrictions with a later change in Congress or down the road another President.

It is a fine balance to say you want restrictions in certain areas but still need oil.

For example some of the areas isolated for ‘monuments’ are huge and non-populated.

Most folks would not understand how large ANWAR is and how desolate.

But the oil industry is fine at the current prices or even lower.  But the issue is all of the other things that they have to anticipate down the road in order to start a new project.

The economy is driven by this commodity far more than any other.

So, if Trump can help in this area, it will only help the overall economy and the folks in general.

Some of his things have already helped and eased up things.

But still folks want a good safe environment and no one living on the coast wants to look out their back door and see oil rigs.

So, it is a very complex issue and cannot be a free for all.

But for sure, you cannot handcuff them to the extent the environmentalists and far-Left folks want to.

@UNIMAN

Fracking..that is the topic of my reply not traditional exploration which has lower fixed costs. Drill baby drill extra capacity only makes sense over 80 a barrel, 80 a barrel means mid 3's to 4's for gas..so which do you pick?

@BigGame90

 So where did I mention subsidies? Can you point in a post I made that subsidies are the answer?

The issue is the clown in the chair sold a lie about drill baby drill when we were at all time high production already, its a scam. He also catered to the fracking group which was also a scam. For fracking to make sense prices have to be over 80 all in, so drill baby drill means we need 80 per or marginal frackers will not make money, 80 a barrel means mid 3s to 4s at the pumo.

You guys complain about gas prices but think there is some magic oil fields that are not fracking we have ready to go, it is low level intelligence to a high degree of humor.

In top two U.S. shale fields, oil and gas companies are profitable in the $30 per barrel to low $40s per barrel range, according to data firm Rystad Energy. This year’s higher prices could push the shale group’s cash from operations up by 32%, Rystad said.

You do realize this is fracking? 

What is the break even price for fracking?

Today, the West Texas Intermediate price at which a U.S. producer can drill a new well profitably—its break-even point—is roughly $49 a barrel, according to the Kansas City Federal Reserve, which is a good approximate proxy for fracking since most U.S. production happens using that method.

@UNIMAN

 The shale and fracking is tricky.  I wasn’t clear above about the BE price.  Some are very low and some areas are at the higher end due to accessibility and difficulties.  But $50 is a reasonable number.  
But the issue is that the lower number is basically for the ones that are in current operation. 
The issue is the exploration and new drilling.  Those initially cost more to break even.  So, at what price does oil need to be for these to be worth pursuing.  Most were profitable even when it was at $70 before.  But then the political and environmental climate changed as well.
But of course after they are up and running they drift back down to the average BE of around $50-55. 
The other concern with starting a new project is the uncertainty politically with restrictions and that sort of thing. 
So, the question of starting a new project has to consider all of these things and how quickly they would get it into profit.  That is a big issue with new projects for investors wanting payouts.  
Even oil companies want long term stability and certainty.

@UNIMAN

 WT is not the marginal fracking we are discussing, it is part of the current supply and is already counted in the total we take for granted in current production.

The fringe production comes from higher cost production areas and some that have large transport costs in addition to the exploration costs.

Why would a fracking exec go out and state that 80 is required into the face of the GOP and current POTUS if this werent the case? The marginal producer the one who adds to supply and has higher capital cost structures and less access to the equipment and infrastructure than the big players are what is on topic. Your quote is for easy access already in production and all costs covered fields from massive players like Shell.

If the majors want more production they will have to take more risk and find new opportunities, that carries costs and time that they obviously are not chomping at the bit to go after. 

Drill baby drill !  

U.S. Interior Secretary Doug Burgum on Thursday announced steps to open up more acreage for oil and gas leasing and lift restrictions on building an LNG pipeline and mining road in Alaska, carrying out President Donald Trump's executive order to remove barriers to energy development in the state

Burgum said the agency plans to reopen the 82% of Alaska's National Petroleum Reserve that is available for leasing for development and reopen the 1.56-million-acre Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing...

Drill baby drill !

drill baby drill, just another stupid catch phrase that magas eat up. We have already been drilling at record levels, but thats not a catchy drill baby drill phrase.

maga party is the most selfish party ever created, they could careless about anything that has to do with the planet and what they leave behind for future generations

It depends.  Because of the lifespan and peripatetic nature of those types of projects it can vary a lot. 
But generally the BE is lowest for a new well in the shale basins.  Obviously, existing ones are even lower.  The latest survey was around $62 for new ones and $38 for existing ones, in the Permian region.  Whereas, in the Eagle Ford region it was $23 for established wells and $48 for new ones. 
There are some where the BE might even be close to $100 at times or for a while due to logistics and various other costs.  They generally will come down though.  
But on average it is nowhere near $80.  It is far lower, as I said around $55 is a better guess.

I am not sure what guy was wanting $80.  Maybe that was on a special project where he would need it for that job.  

But in the last couple of decades the innovations and advancements have really brought the costs down quite a bit and the BE of course has been dropping because of this.