8 ms·

The World Is Still Producing More Oil Than It Needs

178 points by n0pe_p0pe 6y ago

onetimemanytime 6y ago
Is this why they pay to get rid of produced oil (negative prices)? I guess is better to lose a bit hoping things turn around than closing well /suffering long term damage.
- icu 6y ago
  It was the oil exchange traded funds (ETFs) who trade the oil contract that suddenly found themselves trapped between owning oil contracts and not being able to offload them in time for delivery. Commodity prices are based on the delivery of the physical goods for a given month. If you don't get rid of the contract by the date stipulated in the contract, you are contractually obligated to take delivery. If you're a financial institution setup to buy contracts from producers and sell contracts to refineries, you probably don't have any infrastructure to take delivery and safely store crude (which is highly toxic stuff). This is partly why prices went negative. Too many contracts were held by institutions who could not deal with delivery. IMHO I believe there are other reasons behind negative oil prices: * Co-ordinated central bank action since 2008 that has led to 'ZIRP'--zero interest rate policy. * ZIRP leads to the misallocation of capital (US shale may not have happened if interest rates were higher) * The Petrodollar System (oil is denominated in USD) * The Eurodollar System (non-US banks make USD denominated loans to non-US firms) * Geo-politics of the US reserve currency status which is being challenged by Russia (Russia doesn't like the foreign policy constraints that come with the USD being the world's reserve currency) * Geo-politics of the Saudis not liking US oil production (the Saudi influence on US geopolitics has waned since the US has become the largest oil producer) * The 'milkshake dollar theory' (the USD will gain relative to other currencies and that will cause systemic domestic and global economic problems). The obvious thing is to blame it all on the COVID-19 demand shock, but I think it's really a multivariate problem. The global economic outlook and geopolitics were shaky prior to the pandemic.
  - redis_mlc 6y ago
    > the Saudi influence on US geopolitics has waned since the US has become the largest oil producer Saudi influence has also waned since they gave $2 billion to the Clinton Foundation ... and Hilary lost. Oops! https://www.vox.com/2016/8/25/12615340/hillary-clinton-foundation https://www.vox.com/2016/8/25/12615340/hillary-clinton-found...
    - alexilliamson 6y ago
      That article you posted says the Saudis gave 25 million to the Clinton Foundation. Oops!
- goodcanadian 6y ago
  It is a question of whether it will cost more to store the oil than it does to "sell" it at a loss. That said, I doubt many producers truly sold for negative prices. The negative prices were a commodities market effect where traders were required to pay to offload their futures contracts in order to not take delivery of the oil. In other words, I suspect the commodities traders bore the brunt of the negative pricing.
  - bob33212 6y ago
    Wouldn't a refinery or storage facility in a country with lax regulations just burn their existing stockpile and take some off this oil at a negative price
    - gen3 6y ago
      I guess the issue with this is that it’s a physical item being delivered to the US, not any country. I’m not sure what the laws are when it comes to burning stuff off in the US.
  - perl4ever 6y ago
    "traders were required to pay to offload their futures contracts in order to not take delivery of the oil" That doesn't seem accurate, since the expiring futures rebounded to a positive value the next (and final) day, right? It seems more like people were panicking and thought they had to unload at any price, but it was simply an error. Although I'm not knowledgeable about it.
    - toast0 6y ago
      If you were a speculative trader, and absolutely didn't want to have any oil delivered to you, it makes sense to sell at close the day before the futures become binding. You could wait until the last day, but you'd have a big problem if the market was closed that day becomes of unexpected circumstances.
DyslexicAtheist 6y ago
I used to work offshore in commercial diving / ROVs. The reasons are not so much technical problems, but there is demand/supply for people who can do that sort of job, as I wrote here[1]. people need many years of experience (recorded in a log-book), before they can do the next certification. Unlike SW engineering where you're promoted to Senior depending on company and sometimes for no apparent reason in oil+gas a lot of people are in their 40ies and 50ies. Our super-intendant on one job was 78. I was the youngest guy out there with 23 yro while the next closest was 12 years older than me (ans also only on one job. one all other gigs all were much older still). Every 2 or so years you need to do a survival training. There are medical fitness tests etc ... You can't just quickly train a few on-shore engineers and then send them out there. On the other hand there should be plenty of people "sitting on the beach" without work right now and from my experience it sounds like big oil companies rather not spend the money on this when they think there might be a chance of this blowing over in 3 months. [1] https://news.ycombinator.com/item?id=22619406 https://news.ycombinator.com/item?id=22619406
- raihansaputra 6y ago
  Can you share the format of the log book? Interested in doing that for my career. Having a documentation of problems I faced, even not in detail, would help a lot in the coming years I think.
  - DyslexicAtheist 6y ago
    sure, it's fairly simple. You can see some screenshots of the pages with a google image search "commercial diver logbook" or "saturation diver logbook". Has fields for name of ship/vessel, name of project, name of client, type of gear, date, and then time spent in bell or lock-out, and what you were working on, then you would calculate the total time spent in saturation at the end of the decompression (e.g. number of days/weeks etc). there would be signature field for yourself and supervisor/super-intendant: https://www.subsupply.eu/store/image/cache/catalog/logbooks/07_Commercial_divers-logbook-record-of-dive-600x600-w62--2-27-44-0.jpg https://www.subsupply.eu/store/image/cache/catalog/logbooks/... https://www.google.com/search?q=commercial+divers+log+book&hl=en&tbm=isch#imgrc=jXgN0VDsawC6RM https://www.google.com/search?q=commercial+divers+log+book&h... https://www.google.com/search?q=saturation+divers+log+book&tbm=isch&hl=en https://www.google.com/search?q=saturation+divers+log+book&t... ROV log books are similar with the difference that you're logging the time of the vehicle and your experience as the pilot not the diver (so no saturation, decompression etc): https://www.google.com/search?q=off+shore+rov+logbook&tbm=isch&hl=en https://www.google.com/search?q=off+shore+rov+logbook&tbm=is...
anticensor 6y ago
It is hard to close, but is there no way to ramp down either?
- wolfram74 6y ago
  The sources I've been encountering make it sound like ramping down is an option up to a point, and then fluid dynamics kick in and the next flow rate below ~60% is 0%. I'm giving them some credence because they're very obsessive about the oil industry, but a bit of skepticism because they feel a little apocalypse heavy.
  - anticensor 6y ago
    That is, like rocket engines :) Those are not usually designed to be throttled below 50-ish% either.
jillesvangurp 6y ago
The elephant in the room is that the current crisis has revealed how dependent some producers are on high prices for oil. Basically the current crisis is a double crisis of first Russia deciding to stop voluntarily limiting their oil production to keep the prices artificially high so the US producers don't go bankrupt. And then the demand collapsed due to the lockdown. So over supply and demand collapse happened nearly at the same time. What this means for producers in the US, that are increasingly relying on more expensive sources of oil is that Russia can collapse the prices to below their break even point any time they want. Same for the Saudi's. That used to be the nuclear option when Opec controlled the prices. This is also where the word oligarchy comes from. Once oligarchies stop fixing prices they are suddenly competing for cost per barrel. And the simple truth is that when it comes to fracking, the cost is too high. What that means in turn is that oil related investments suddenly got a lot more risky than they already were. All the easy sources have long been invested in and the remaining sources are increasingly difficult to exploit. Institutional investors have already been divesting away from oil for a few years. Price fluctuations like we've seen in the past decade ranging from negative to above 100$ per barrel means it's a highly risky investment as you simply can't know if you get back your money. So, shutting down right now may get a permanent nature for a lot of companies as they'll have a hard time getting investors to back bringing their plants online. The longer this lasts, the worse it gets. I expect a lot of recent investments to be written off completely. Also things like the Keystone pipeline are probably dead in the water as it is debatable whether the thing will ever be profitable. IMHO that's actually good news and will force people to look at alternative technologies and accelerate the agenda on e.g. switching to electrical vehicles, battery technology, alternative energy etc.
- clouddrover 6y ago
  > This is also where the word oligarchy comes from. The word has been in use for 500 years. According to the Oxford dictionary it derives from the Greek oligarkhia, from oligoi "few" and arkhein "to rule": https://www.lexico.com/definition/oligarchy https://www.lexico.com/definition/oligarchy
- dec0dedab0de 6y ago
  This is also where the word oligarchy comes from Im pretty sure the word oligarchy existed before humans relied on petroleum.
deblacquiere 6y ago
I work in surface production facilities (rather than reservoir) but I think this article misses the point by a long margin. For the vast majority of oil reservoirs, shutting in is good for production. The reason is fairly intuitive - you drill into the oil-bearing part of the reservoir which is in the middle (beneath the gas but above the water). When you suck on the oil, you pull water and gas through with it ("coning") but when you stop, it all settles down again. When you restart production you get more oil (valuable) and less gas (far less value, possibly worthless) and less water (worthless). Lifting costs vary a great deal but for my high-cost-of-living part of the world, we still don't spend more than about $20 a barrel to produce the oil. Most of the world would be far less. I think for the vast majority of the oil industry, we still make a small profit on low oil prices. The economics of oil production is really that you spend a shitload up front (CAPEX) and then your continuing costs (OPEX) are an order of magnitude smaller. And as our CEO said recently, when prices are low everybody expects to rise back to what we're used to again soon, because we're naturally optimistic. But that's not a law written in stone, it might be true that oil prices drop again in future, so we're better off selling it today. Also what they mentioned about waxy pipelines doesn't affect most facilities. Usually we would do a shock biocide dose for preservation, which is not a particularly high cost. And if you've got a waxy crude, you're probably going to get your wax issue within 12-24 hours anyway as soon as you cool to ambient, so a long shut-in and a short shut-in would be dealt with similarly.
- Roritharr 6y ago
  Thank you for the great comment. It is astonishing to me how professional people from the oil industry generally were in my previous interactions. Such a nice change of pace compared to many others.
  - lobotryas 6y ago
    Why would they be unprofessional? Because media demonizes the industry as destroying the Earth and raping the environment? Petroleum engineering/science is very hard; people don’t make it through that by the seat of their pants.
logotype 6y ago
contractual obligations.
jshaqaw 6y ago
My understanding is that at least some oil fields have a decay rate once drilled whether producing or not.
BurningFrog 6y ago
Oil income is supporting many horrible regimes. I have some hope a prolonged oil glut might make some of them fall. A world where Russia or Iran or Venezuela was run by decent government would be a great improvement! I wish the same for Saudi, but I think that regime is safe.
- lobotryas 6y ago
  I like your sentiment, but it conveniently forgets the significant amount of bloodshed and instability that usually occurs when one such regime collapses. Just look at Libya. The West got rid of Gadaffi and the country went from stability under a dictator to fractured chaos where tourism industry is dead and slave markets have opened.
  - bobthepanda 6y ago
    This is the problem with pie in the sky US neoconservatism or neoliberalism. Not every has a secular civil society ready to jump in and create lasting national institutions. Then they get all hot and bothered when what replaces a dictatorship is either control by a party they don't like, mass corruption, total anarchy, or some combination of the three. See: Iraq, Afghanistan, Egypt, Syria, Libya, South Sudan The particularly dumb thing about Libya is that the US administration at the time was quite keen on emphasizing that they did not want to get involved initially, since the US was tired of war and the US has no major presence there. Britain and France, who loved waxing on about Iraq being an immoral war, were the primary supporters of intervention.
  - BurningFrog 6y ago
    I'm absolutely not advocating US invasions. These petrostate governments get their power from controlling the oil wealth. If that becomes worthless, they have no power basis and serve no purpose anymore. Sure, what comes after, nobody knows. But in general, I think non-oil economies, that have to thrive of regular people working, produce much healthier governance.
- Synaesthesia 6y ago
  I think a big reason why Saudi Arabia and US are keeping oil prices low is because it’s a useful attack on Russia, Iran and Venezuela. I don’t see why Venezuela say is worse than Colombia which is a far worse human rights offender.
cachestash 6y ago
Walked past a petrol (gas) station earlier in the UK. Its still priced at £1.07 a litre.
- ilamont 6y ago
  Just filled up outside of Boston, Massachusetts. $1.89/gallon "regular" ($0.50/liter) and $2.37 "premium" ($0.63/liter). I have a friend with a Costco card paying $1.63, which I haven't seen since the 1990s.
- rootusrootus 6y ago
  Prices vary for a lot of reasons, and in the UK tax is a significant part of the retail price. Right now perhaps it’s more than half of the pump price. Some parts of the US are under a dollar a gallon. Couple weeks ago it was as low as 89 cents a gallon in some places in Oklahoma. Looks like it’s up to 95-99 cents at Costco now. But in Oregon, it’s just about $1 more a gallon. And not much of that is taxes. We have a different refinery system for the western US, we never get the really good prices here.
miclill 6y ago
Why do we call it "producing"? Most of the oil is harvested not produced, right?
lowdose 6y ago
People are extracting more oil from the planet than people are currently consuming.

178 points by n0pe_p0pe 6y ago

Is this why they pay to get rid of produced oil (negative prices)? I guess is better to lose a bit hoping things turn around than closing well /suffering long term damage.

icu 6y ago
It was the oil exchange traded funds (ETFs) who trade the oil contract that suddenly found themselves trapped between owning oil contracts and not being able to offload them in time for delivery. Commodity prices are based on the delivery of the physical goods for a given month. If you don't get rid of the contract by the date stipulated in the contract, you are contractually obligated to take delivery. If you're a financial institution setup to buy contracts from producers and sell contracts to refineries, you probably don't have any infrastructure to take delivery and safely store crude (which is highly toxic stuff). This is partly why prices went negative. Too many contracts were held by institutions who could not deal with delivery. IMHO I believe there are other reasons behind negative oil prices: * Co-ordinated central bank action since 2008 that has led to 'ZIRP'--zero interest rate policy. * ZIRP leads to the misallocation of capital (US shale may not have happened if interest rates were higher) * The Petrodollar System (oil is denominated in USD) * The Eurodollar System (non-US banks make USD denominated loans to non-US firms) * Geo-politics of the US reserve currency status which is being challenged by Russia (Russia doesn't like the foreign policy constraints that come with the USD being the world's reserve currency) * Geo-politics of the Saudis not liking US oil production (the Saudi influence on US geopolitics has waned since the US has become the largest oil producer) * The 'milkshake dollar theory' (the USD will gain relative to other currencies and that will cause systemic domestic and global economic problems). The obvious thing is to blame it all on the COVID-19 demand shock, but I think it's really a multivariate problem. The global economic outlook and geopolitics were shaky prior to the pandemic.
- redis_mlc 6y ago
  > the Saudi influence on US geopolitics has waned since the US has become the largest oil producer Saudi influence has also waned since they gave $2 billion to the Clinton Foundation ... and Hilary lost. Oops! https://www.vox.com/2016/8/25/12615340/hillary-clinton-foundation https://www.vox.com/2016/8/25/12615340/hillary-clinton-found...
  - alexilliamson 6y ago
    That article you posted says the Saudis gave 25 million to the Clinton Foundation. Oops!
goodcanadian 6y ago
It is a question of whether it will cost more to store the oil than it does to "sell" it at a loss. That said, I doubt many producers truly sold for negative prices. The negative prices were a commodities market effect where traders were required to pay to offload their futures contracts in order to not take delivery of the oil. In other words, I suspect the commodities traders bore the brunt of the negative pricing.
- bob33212 6y ago
  Wouldn't a refinery or storage facility in a country with lax regulations just burn their existing stockpile and take some off this oil at a negative price
  - gen3 6y ago
    I guess the issue with this is that it’s a physical item being delivered to the US, not any country. I’m not sure what the laws are when it comes to burning stuff off in the US.
- perl4ever 6y ago
  "traders were required to pay to offload their futures contracts in order to not take delivery of the oil" That doesn't seem accurate, since the expiring futures rebounded to a positive value the next (and final) day, right? It seems more like people were panicking and thought they had to unload at any price, but it was simply an error. Although I'm not knowledgeable about it.
  - toast0 6y ago
    If you were a speculative trader, and absolutely didn't want to have any oil delivered to you, it makes sense to sell at close the day before the futures become binding. You could wait until the last day, but you'd have a big problem if the market was closed that day becomes of unexpected circumstances.

DyslexicAtheist 6y ago

I used to work offshore in commercial diving / ROVs. The reasons are not so much technical problems, but there is demand/supply for people who can do that sort of job, as I wrote here[1]. people need many years of experience (recorded in a log-book), before they can do the next certification. Unlike SW engineering where you're promoted to Senior depending on company and sometimes for no apparent reason in oil+gas a lot of people are in their 40ies and 50ies. Our super-intendant on one job was 78. I was the youngest guy out there with 23 yro while the next closest was 12 years older than me (ans also only on one job. one all other gigs all were much older still). Every 2 or so years you need to do a survival training. There are medical fitness tests etc ... You can't just quickly train a few on-shore engineers and then send them out there. On the other hand there should be plenty of people "sitting on the beach" without work right now and from my experience it sounds like big oil companies rather not spend the money on this when they think there might be a chance of this blowing over in 3 months. [1] https://news.ycombinator.com/item?id=22619406 https://news.ycombinator.com/item?id=22619406

raihansaputra 6y ago
Can you share the format of the log book? Interested in doing that for my career. Having a documentation of problems I faced, even not in detail, would help a lot in the coming years I think.
- DyslexicAtheist 6y ago
  sure, it's fairly simple. You can see some screenshots of the pages with a google image search "commercial diver logbook" or "saturation diver logbook". Has fields for name of ship/vessel, name of project, name of client, type of gear, date, and then time spent in bell or lock-out, and what you were working on, then you would calculate the total time spent in saturation at the end of the decompression (e.g. number of days/weeks etc). there would be signature field for yourself and supervisor/super-intendant: https://www.subsupply.eu/store/image/cache/catalog/logbooks/07_Commercial_divers-logbook-record-of-dive-600x600-w62--2-27-44-0.jpg https://www.subsupply.eu/store/image/cache/catalog/logbooks/... https://www.google.com/search?q=commercial+divers+log+book&hl=en&tbm=isch#imgrc=jXgN0VDsawC6RM https://www.google.com/search?q=commercial+divers+log+book&h... https://www.google.com/search?q=saturation+divers+log+book&tbm=isch&hl=en https://www.google.com/search?q=saturation+divers+log+book&t... ROV log books are similar with the difference that you're logging the time of the vehicle and your experience as the pilot not the diver (so no saturation, decompression etc): https://www.google.com/search?q=off+shore+rov+logbook&tbm=isch&hl=en https://www.google.com/search?q=off+shore+rov+logbook&tbm=is...

anticensor 6y ago

It is hard to close, but is there no way to ramp down either?

wolfram74 6y ago
The sources I've been encountering make it sound like ramping down is an option up to a point, and then fluid dynamics kick in and the next flow rate below ~60% is 0%. I'm giving them some credence because they're very obsessive about the oil industry, but a bit of skepticism because they feel a little apocalypse heavy.
- anticensor 6y ago
  That is, like rocket engines :) Those are not usually designed to be throttled below 50-ish% either.

jillesvangurp 6y ago

The elephant in the room is that the current crisis has revealed how dependent some producers are on high prices for oil. Basically the current crisis is a double crisis of first Russia deciding to stop voluntarily limiting their oil production to keep the prices artificially high so the US producers don't go bankrupt. And then the demand collapsed due to the lockdown. So over supply and demand collapse happened nearly at the same time. What this means for producers in the US, that are increasingly relying on more expensive sources of oil is that Russia can collapse the prices to below their break even point any time they want. Same for the Saudi's. That used to be the nuclear option when Opec controlled the prices. This is also where the word oligarchy comes from. Once oligarchies stop fixing prices they are suddenly competing for cost per barrel. And the simple truth is that when it comes to fracking, the cost is too high. What that means in turn is that oil related investments suddenly got a lot more risky than they already were. All the easy sources have long been invested in and the remaining sources are increasingly difficult to exploit. Institutional investors have already been divesting away from oil for a few years. Price fluctuations like we've seen in the past decade ranging from negative to above 100$ per barrel means it's a highly risky investment as you simply can't know if you get back your money. So, shutting down right now may get a permanent nature for a lot of companies as they'll have a hard time getting investors to back bringing their plants online. The longer this lasts, the worse it gets. I expect a lot of recent investments to be written off completely. Also things like the Keystone pipeline are probably dead in the water as it is debatable whether the thing will ever be profitable. IMHO that's actually good news and will force people to look at alternative technologies and accelerate the agenda on e.g. switching to electrical vehicles, battery technology, alternative energy etc.

clouddrover 6y ago
> This is also where the word oligarchy comes from. The word has been in use for 500 years. According to the Oxford dictionary it derives from the Greek oligarkhia, from oligoi "few" and arkhein "to rule": https://www.lexico.com/definition/oligarchy https://www.lexico.com/definition/oligarchy
dec0dedab0de 6y ago
This is also where the word oligarchy comes from Im pretty sure the word oligarchy existed before humans relied on petroleum.

deblacquiere 6y ago

I work in surface production facilities (rather than reservoir) but I think this article misses the point by a long margin. For the vast majority of oil reservoirs, shutting in is good for production. The reason is fairly intuitive - you drill into the oil-bearing part of the reservoir which is in the middle (beneath the gas but above the water). When you suck on the oil, you pull water and gas through with it ("coning") but when you stop, it all settles down again. When you restart production you get more oil (valuable) and less gas (far less value, possibly worthless) and less water (worthless). Lifting costs vary a great deal but for my high-cost-of-living part of the world, we still don't spend more than about $20 a barrel to produce the oil. Most of the world would be far less. I think for the vast majority of the oil industry, we still make a small profit on low oil prices. The economics of oil production is really that you spend a shitload up front (CAPEX) and then your continuing costs (OPEX) are an order of magnitude smaller. And as our CEO said recently, when prices are low everybody expects to rise back to what we're used to again soon, because we're naturally optimistic. But that's not a law written in stone, it might be true that oil prices drop again in future, so we're better off selling it today. Also what they mentioned about waxy pipelines doesn't affect most facilities. Usually we would do a shock biocide dose for preservation, which is not a particularly high cost. And if you've got a waxy crude, you're probably going to get your wax issue within 12-24 hours anyway as soon as you cool to ambient, so a long shut-in and a short shut-in would be dealt with similarly.

Roritharr 6y ago
Thank you for the great comment. It is astonishing to me how professional people from the oil industry generally were in my previous interactions. Such a nice change of pace compared to many others.
- lobotryas 6y ago
  Why would they be unprofessional? Because media demonizes the industry as destroying the Earth and raping the environment? Petroleum engineering/science is very hard; people don’t make it through that by the seat of their pants.

logotype 6y ago

contractual obligations.

jshaqaw 6y ago

My understanding is that at least some oil fields have a decay rate once drilled whether producing or not.

BurningFrog 6y ago

Oil income is supporting many horrible regimes. I have some hope a prolonged oil glut might make some of them fall. A world where Russia or Iran or Venezuela was run by decent government would be a great improvement! I wish the same for Saudi, but I think that regime is safe.

lobotryas 6y ago
I like your sentiment, but it conveniently forgets the significant amount of bloodshed and instability that usually occurs when one such regime collapses. Just look at Libya. The West got rid of Gadaffi and the country went from stability under a dictator to fractured chaos where tourism industry is dead and slave markets have opened.
- bobthepanda 6y ago
  This is the problem with pie in the sky US neoconservatism or neoliberalism. Not every has a secular civil society ready to jump in and create lasting national institutions. Then they get all hot and bothered when what replaces a dictatorship is either control by a party they don't like, mass corruption, total anarchy, or some combination of the three. See: Iraq, Afghanistan, Egypt, Syria, Libya, South Sudan The particularly dumb thing about Libya is that the US administration at the time was quite keen on emphasizing that they did not want to get involved initially, since the US was tired of war and the US has no major presence there. Britain and France, who loved waxing on about Iraq being an immoral war, were the primary supporters of intervention.
- BurningFrog 6y ago
  I'm absolutely not advocating US invasions. These petrostate governments get their power from controlling the oil wealth. If that becomes worthless, they have no power basis and serve no purpose anymore. Sure, what comes after, nobody knows. But in general, I think non-oil economies, that have to thrive of regular people working, produce much healthier governance.
Synaesthesia 6y ago
I think a big reason why Saudi Arabia and US are keeping oil prices low is because it’s a useful attack on Russia, Iran and Venezuela. I don’t see why Venezuela say is worse than Colombia which is a far worse human rights offender.

cachestash 6y ago

Walked past a petrol (gas) station earlier in the UK. Its still priced at £1.07 a litre.

ilamont 6y ago
Just filled up outside of Boston, Massachusetts. $1.89/gallon "regular" ($0.50/liter) and $2.37 "premium" ($0.63/liter). I have a friend with a Costco card paying $1.63, which I haven't seen since the 1990s.
rootusrootus 6y ago
Prices vary for a lot of reasons, and in the UK tax is a significant part of the retail price. Right now perhaps it’s more than half of the pump price. Some parts of the US are under a dollar a gallon. Couple weeks ago it was as low as 89 cents a gallon in some places in Oklahoma. Looks like it’s up to 95-99 cents at Costco now. But in Oregon, it’s just about $1 more a gallon. And not much of that is taxes. We have a different refinery system for the western US, we never get the really good prices here.

miclill 6y ago

Why do we call it "producing"? Most of the oil is harvested not produced, right?

lowdose 6y ago

People are extracting more oil from the planet than people are currently consuming.