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Avg gasoline prices are down 20% in 2 months. Is that noise? https://ycharts.com/indicators/us_gas_price https://ycharts.com/indicators/us_gas_price

hajile 4y ago
That's an artifact of dumping 30% of the strategic oil reserves into the market to drive down prices. Maybe the prices stay low, but with Europe warning of fuel shortages this winter, I can't see that happening.
- jcranmer 4y ago
  The prospective fuel shortages in Europe are mostly to do with natural gas, not oil and oil derivatives, no?
  - smaryjerry 4y ago
    This is correct. Many are conflating oil and natural gas. Both have increased significantly, but natural gas has increased the most.
  - failTide 4y ago
    If Europe ends up with a massive shortage of natural gas for heating, would that significantly increase the demand for heating oil?
    - jcranmer 4y ago
      I suspect most houses don't have the capability to switch between different modes of heating: if you have a gas furnace, you're not going to be burning heating oil in it instead. I believe the plan in case of shortage is to reduce the amount of natural gas flowing to power plants, and to make do with whatever alternatives for electricity are readily available (which is probably coal, although maybe nuclear decommissioning will be staved off).
    - oezi 4y ago
      No, because the types of fossil fuels do not substitute well. You can't use oil for heating in Gas burners, industrial processes etc.
    - nephanth 4y ago
      Not for heating oil, since most installations that use gas for heating do not gace the capacity to switch to oil. And those who have the capacity to switch their heating system would choose a heat pump over oil (better yield). But oil (&coal) may be bought to generate electricity (to replace gas, not for heating but for electricity production. Some European countries such as Germany are heavily reliant on gas for electricity production), and that may still drive petrol up
- arcticbull 4y ago
  I'm not 100% sure they did this but with the SPR you can actually smooth out the price curve for oil. Much of this period, the spot price of oil was high, but oil for delivery 6-12 months out was much less expensive. The SPR could sell into the spot market but buy oil for delivery 6-12 months out. This actually could mean a much more sustained drop.
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nradov 4y ago
We won't know if it's noise or not until several months in the future when we can see a clear trend line. So come back here in a year and we can tell you whether it was noise. Any answers you see today are just educated guesses.

hajile 4y ago

That's an artifact of dumping 30% of the strategic oil reserves into the market to drive down prices. Maybe the prices stay low, but with Europe warning of fuel shortages this winter, I can't see that happening.

jcranmer 4y ago
The prospective fuel shortages in Europe are mostly to do with natural gas, not oil and oil derivatives, no?
- smaryjerry 4y ago
  This is correct. Many are conflating oil and natural gas. Both have increased significantly, but natural gas has increased the most.
- failTide 4y ago
  If Europe ends up with a massive shortage of natural gas for heating, would that significantly increase the demand for heating oil?
  - jcranmer 4y ago
    I suspect most houses don't have the capability to switch between different modes of heating: if you have a gas furnace, you're not going to be burning heating oil in it instead. I believe the plan in case of shortage is to reduce the amount of natural gas flowing to power plants, and to make do with whatever alternatives for electricity are readily available (which is probably coal, although maybe nuclear decommissioning will be staved off).
  - oezi 4y ago
    No, because the types of fossil fuels do not substitute well. You can't use oil for heating in Gas burners, industrial processes etc.
  - nephanth 4y ago
    Not for heating oil, since most installations that use gas for heating do not gace the capacity to switch to oil. And those who have the capacity to switch their heating system would choose a heat pump over oil (better yield). But oil (&coal) may be bought to generate electricity (to replace gas, not for heating but for electricity production. Some European countries such as Germany are heavily reliant on gas for electricity production), and that may still drive petrol up
arcticbull 4y ago
I'm not 100% sure they did this but with the SPR you can actually smooth out the price curve for oil. Much of this period, the spot price of oil was high, but oil for delivery 6-12 months out was much less expensive. The SPR could sell into the spot market but buy oil for delivery 6-12 months out. This actually could mean a much more sustained drop.
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nradov 4y ago

We won't know if it's noise or not until several months in the future when we can see a clear trend line. So come back here in a year and we can tell you whether it was noise. Any answers you see today are just educated guesses.