Jump to content
seeesharky

The sliding $US and the price of Oil

Recommended Posts

Hi all

I depend on selling my trip video's on a live-aboard for a living and have done so for the past 8 yrs, but I have noticed since the last 6 months and the $US weakening that the yanks are more reluctant to buy. They are a big part of what I earn, in fact they are the butter on my bread. Also thier numbers are dropping off in a big way.

Is anyone else out there experiancing this rapid decline?

Also I am begining to worry about rising fuel prices, in 10 years will dive operators be able to afford far and remote trips to the most isolated of reefs with the big walls and big fish?

Are we working in an industry that the count down has started to the end of this beautiful filming lifestyle we lead?

Will anyone be able to afford to get there in the future and have some cash left over to buy a trip video or photos?

Would love to hear what anyone has to say on this. Are you feeling the pinch too?

Regards

Seeesharky

Share this post


Link to post
Share on other sites
Hi all

I depend on selling my trip video's on a live-aboard for a living and have done so for the past 8 yrs, but I have noticed since the last 6 months and the $US weakening that the yanks are more reluctant to buy. They are a big part of what I earn, in fact they are the butter on my bread. Also thier numbers are dropping off in a big way.

Is anyone else out there experiancing this rapid decline?

Also I am begining to worry about rising fuel prices, in 10 years will dive operators be able to afford far and remote trips to the most isolated of reefs with the big walls and big fish?

Are we working in an industry that the count down has started to the end of this beautiful filming lifestyle we lead?

Will anyone be able to afford to get there in the future and have some cash left over to buy a trip video or photos?

Would love to hear what anyone has to say on this. Are you feeling the pinch too?

Regards

Seeesharky

Hi Seeesharky,

Yes folks are extremely reluctant to buy anything right now. Do not depend on Americans for your income, at least for the near to medium future. The dropping dollar, the price of gas etc are a total double whammy for Americans wishing to travel abroad. Add to that the fact that there is a real recession going on for most Americans right now. The Dow just dropped another 400 and oil went up another $10 today. Anyone who depends on American tourists is going to see a steep drop for a while. How and when it will come back....I wish I knew.

Share this post


Link to post
Share on other sites

Yeah, I'll second that.

 

The economy in the US is facing the biggest headwinds anyone has seen in a very long time - probably going all the way back to the great depression. It won't be as bad as the '30s, but it is bad and getting worse before it gets better as I see it. This could stretch out well into 2009 before it turns around.

 

Optimists say growth returns in the last part of this year, but I just don't see it.

Share this post


Link to post
Share on other sites

You Guys have got a way to go with Gas prices. We pay £1.15 per litre in the UK. I think there are 3.7 litres per US Gallon i.e £4.25 converted to US$ = $8.05 !! A high percentage of this is government tax. No wonder we have smaller cars with smaller engines :D

 

Roger

Share this post


Link to post
Share on other sites

I actually think it works out to be a bit more than that Roger ..

 

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

 

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

 

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

 

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

Share this post


Link to post
Share on other sites
I actually think it works out to be a bit more than that Roger ..

 

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

 

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

 

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

 

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

 

Here in Australia this morning, if you need to buy diesel at the Rabbit Flat Roadhouse in the Northern Territory you'll pay $3.00 a liter.....that's US $10.50 a gallon!!

 

I think the bigger worry is airlines cutting flights and parking planes. Qantas just announced cutting routes to the US and Japan to Cairns that amounts to around 1,500 people a day- and that spells potential disaster for dive operators already dealing with fuel costs, and a slowing world economy.

 

The same thing is happening elsewhere and it will become tougher to get "there from here" in the future- adding to the cost of holiday travel. Hold on to your shorts- we're in for a long ride.

 

In the past when a slow- down happened in the US things around the world slowed down too- that's not the case now with China and India keeping up the demand for fuel and other resources.

 

We may be looking back on these days in the next 5 years as "the good old days."

Share this post


Link to post
Share on other sites

It's going to get worse for some time,

Diesel here is $2 per liter in Exmouth and there is less people coming here than previous years.

 

The greedy mining companies have also jacked up the price of everything creating a false economy over here in West Australia but it's going to all fall apart one day and this part of AUS will be buggered.

 

The fuel thing is going to change in the next ten years as Hydrogen from simple FREE water will be used to power more and more things and so the oil, gas and coal mob are going to far apart. It will also sort out the middle east problems as we will not need their oil.

 

For years the oil companies and governments have tried to buy or kill trying to keep the hydrogen topic from growing but now there is just far too many people to keep quite about it and news spreads very fast like on the internet.

 

So either we will fill up our tanks with water and have the hydrogen taken out of the water just before it hits the engine or we will have a Solar Cell Hydrogen Station at home that is used to fill on-board hydrogen storage tanks in the car which is used to drive either a normal engine or it's converted on board to electricity to drive a electric engine. :D

Share this post


Link to post
Share on other sites

I agree it is the airline fuel surcharges that will stifle the long haul guys. The extras are also being put onto XS baggage etc. making it very expensive for the tourist divers like myself to carry their kit. The cost now of getting to your part of the world Wagsy, from the UK, is pretty prohibitive. I imagine the US divers will still make it to the Caribbean, but there are quite a few "hidden" costs there now.

 

Thank goodness, from the UK, we still have the Red Sea just 5 hours away, although even that is getting more expensive with fuel surcharges and lower baggage allowances.

 

I am surprised that Dive Centres aren't offering storage space for dive kit. It will soon be cheaper to buy more than one set of kit and keep it at your favourite resort and just travel with your camera and a T shirt ( maybe some swimmers too :D )

 

I also agree with the diesel comments, last night on the news it was reported that the average UK driver (12,000 miles per year) would only now save £100 (US$200) per year with a diesel engine, the extra cost has almost outweighed the extra diesel mileage.

 

Roger

Share this post


Link to post
Share on other sites

I think its going to turn into MAD MAX 2.. where we all drive wrecked cars and fight in gangs for fuel.. Driving across the war scorched wastelands

 

I want to be Humungus Lord of the wastelands !!!! and wear my leather zip mask.. :D

 

WE GO IN, WE KILL...NOTHING LIVES !!!

 

Simon Buxton And Mikey Veitch can be those two arse bandits on the motorbike... ;)

 

Dive safe

 

Dean (£1.31 for diesel)B

Share this post


Link to post
Share on other sites
I actually think it works out to be a bit more than that Roger ..

 

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

 

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

 

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

 

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

 

The price of Diesel increased in the US too. It is now more than regular gas when it used to be cheaper. I was told this was due to removing sulfur from it to reduce pollution. Was this done elsewhere?

 

What you say about re-opening oil fields may be true. I understand this is happening in LA. There is also a lot of exploration going on in the Arctic Ocean, just about the entire coast next to Alaska, when it used to be concentrated near Prudhoe Bay, a relatively small area.

 

BTW gas is now about $5/gal where I live in boondocks of Alaska (which is much more than in Anchorage). The road miles here are limited so I have less than 50K miles on my PU which will be 15 years old this month. However, I think it may be more typical for those in the US to drive this much in just a year!

 

Tom

Share this post


Link to post
Share on other sites

Dean you make me laugh.

I already ride though waste lands in search of fuel.

post-4240-1212886265_thumb.jpg

 

 

With the cost of Excess luggage FED Exing your stuff to the dive location might not be a bad idea now.

It takes more to refine Petrol than Diesel....Diesel costs more because the OIL companies sell it like that.

Share this post


Link to post
Share on other sites
I think its going to turn into MAD MAX 2.. where we all drive wrecked cars and fight in gangs for fuel.. Driving across the war scorched wastelands

 

I want to be Humungus Lord of the wastelands !!!! and wear my leather zip mask.. ;)

 

WE GO IN, WE KILL...NOTHING LIVES !!!

 

Simon Buxton And Mikey Veitch can be those two arse bandits on the motorbike... :)

 

Dive safe

 

Dean (£1.31 for diesel)B

 

:D

:P:P

Share this post


Link to post
Share on other sites

Gas prices and the economy have definitely reduced the number of US tourists down here. We still have visitors but I see a drop.

 

On a side note all the condo developments here are being funded by Alberta based oil groups whereas in previous years it was principally US investors in these sort of projects.

 

I am sitting on the fence at the moment as to how this will all pan out, I think it will stabilize when the US economy sorts itself out and we have become used to the price of gas. I remember in the UK during the 70's gas hit 1 pound a gallon, it was the end of the world but we all became used to it after a while.

 

Martin

Share this post


Link to post
Share on other sites

In my area, Washington state, USA , gas is about $4.35 per gallon, and is towards the high range for our area. Diesel is about $4.85 per gallon. Higher due to environmental mandates for lower sulphur content. The diesel cars get a little better mileage, but the fuel costs more, I think it is a net wash.

Whats really been the shocker here, is the rapid price increase. Price for gas has doubled in little more than a year.

Share this post


Link to post
Share on other sites

Seeesharky, just start charging in Euros... then that will really scare off the remaining gringos :D

Edited by pakman

Share this post


Link to post
Share on other sites
You Guys have got a way to go with Gas prices. We pay £1.15 per litre in the UK. I think there are 3.7 litres per US Gallon i.e £4.25 converted to US$ = $8.05 !! A high percentage of this is government tax.
On the other hand decent (not great or total) medical coverage for a family of 3 costs $700 to $ 1,200 per month in the US. I don't know specifically how your tax revenues are distributed but I imagine you have significant social/economic programs at your disposal as a result. Significant in the sense that they do not exist here,

 

I enjoy the eat-what-you-kill nature of the US society, but the inequities for many here are very hard to dismiss. High fuel and food prices and no medical for the family. That's a tough nut for many here, not only financially but intellectually and emotionally. I'd imagine some of them would willingly be exposed to VAT or use taxes on discretionary spending if it would bring medical and pharmacutical coverage to their families.

 

I am pretty liberal, though not of the bleeding heart variety ,and I don't personally want to suckle from the government teat. But man do European countries do a better job than we do in providing social advantages for the distressed, or for that matter everyone else too.

Share this post


Link to post
Share on other sites
In my area, Washington state, USA , gas is about $4.35 per gallon, and is towards the high range for our area. Diesel is about $4.85 per gallon. Higher due to environmental mandates for lower sulphur content.
I've been involved in the oil business for much of my career, mostly hot mix or emulsion sides, but oil nonetheless. Here is what I know to be true about gas and diesel prices, today: Diesel, even ULSD, is significantly less expensive to produce, for reasons that range from the crude origins to the distribution platforms. One example is that some of the byproducts created from the refining of gasoline from oil (normally expensive to dispose of) are used in the production of diesel. Now one could make the claim that this reduces gasoline costs, but clearly it is an advantage net, resulting from diesel production.

 

On the current US market big oil recieves gross profits of about 6 bucks per barrel of gasoline vs 32 bucks per barrel of diesel.

 

The reasons diesel is expensive at the pump is because it is immensely profitable and used by only a sliver of the US population. They can reap windfall-like returns without angering any more than a small percentage of the population. By almost any cost analysis or production calculus, the cost disparity at the consumer level should be favorable to diesel.

 

Energy output from diesel eclipses gasoline and it is cheaper to produce. If we are going to stick with fossil fuels until the earth can give no more, we ought to be doing it via the diesel lines.

Share this post


Link to post
Share on other sites
I don't know specifically how your tax revenues are distributed but I imagine you have significant social/economic programs at your disposal as a result.

Your point is well made Rob, the only problem is when you watch those numbers rolling around on the pump readout you don't always think "that's a bit more towards my coronary bypass" :D

 

However I do agree that although the UK tax is high the health & social welfare is on the whole pretty good, and even more important, it is inclusive.

 

But.... as the prices rise faster than income we all have to cut back on those luxuries which includes new shiney kit and those holiday DVDs ;)

 

Roger

Share this post


Link to post
Share on other sites

The primary driver for the high oil price right now is the low US $$. Since oil is priced in US $$ international investors are buying it up in droves.

 

Since the US $ is low, Americans probably won't want to travel to countries w/ high currencies - i.e. countries w/ currency based on the Euro or Pound.

 

I just got back from the Philippines, and prices were OK there.

 

Cheers

James

Share this post


Link to post
Share on other sites
This is an interesting read and argument on the current oil market...

http://money.cnn.com/2008/06/06/news/econo...sion=2008060610

My problem this article is that his argument is predicated on the supposition that demand is driving the price of oil higher and that as demand weakens and supply strengthens, prices will fall.

 

Everything I have heard recently is that many producing countries are actually banking oil because they have no customers to sell it all to. Iran, Russia, Venezuela are examples, and in the US we export just below 2 million barrels of product (gasoline, diesel and jet fuel) per day, that is refined from the oil we import. That is also why the Saudi's told Bush to go pound sand when he asked them to ramp up production. They understood it would not have any effect on price because there is already more than enough oil on the market to satisfy all the demand.

 

James is right, in my book. The price of oil is currently driven by a financial rather than economic dynamic.

Share this post


Link to post
Share on other sites

Americans may be tighting up a little, but the ones that travel and dive will still be out there. Maybe not as many trips a year but they will still be there. The USA has a long way to go until we reach the levels of most of the world on fuel prices. What does hurt is how poor the $ is on the world market. There are still good places to go where we still get something for our $.

Share this post


Link to post
Share on other sites

Rising airline costs, fewer flights, and the (strong) likelihood of at least one U.S. airline bankrupcy by the end of the year are all taking a toll, in addition to the doom and gloom spread by fuel prices, rising unemployment (still not that bad comparatively) and the housing 'crisis'. Some of the retraction is fearmongering by the media, some of it is undoubtedly real...and whether it's economics or psychology, people I know in general are tending to reduce their spending.

 

The only possible good thing I see coming out of rising fuel costs is that transport costs for manufactured goods are effected. In the long run, that could lead to production jobs moving back domestically...why outsource to save labor costs if you lose the savings shipping the product home. But it would take $6-10/gallon gasoline before that happens. More likely the impetus will be raised to do more about tapping domestic resources as giles said.

 

(Living in the DFW, TX area, our home is on top of the 'Barnett Shale' formation...although we only have a measly 0.18 acre lot, a neighborhood association is negotiating our entire neighborhood as a 600-lot 'block' for leasing mineral rights. Last I heard, the bids were around $20k/acre and 20% computed royalties. So I guess that's another small windfall we might see, around $3600 up front and the chance for a measly $200 or so a year check from a nearby (relatively speaking, not anywhere in sight or vision) gas well that was going to be there anyway. If energy prices weren't so high they'd be ignoring the natural gas formations....heck they used to just burn off the NG as it was just 'waste' when they were really after oil!)

 

I know I'm seriously considering taking just 'local' dive trips in driving distance to the FGNMS in 2009, although I've been invited to go very far afield (for a Yank) to the Red Sea...we'll just have to see.

Share this post


Link to post
Share on other sites

Pick up a book called "Blood and Oil"...... interesting read..... explains WHY we're in this stinking mess that we find ourselves in today....

 

Pick up another called The Last Oil Shock..... even more interesting.... Explains exactly WHAT this stinking mess is that we're finding ourselves in today - namely: "for every barrel of oil that we now discover, we use 3!" :P;)

 

The author, David Strahan - a very well respected investigative journalist seems to sum things up rather well...... We're right, royally, F****D!!!!! (they're my words, not his, he's the author, he summarises things a little more eloquently.....) :P

 

He has very scary facts backed up with figures, charts, graphs, quotes from industry bigwigs and such like that the most simple layman could understand clearly.....

 

Hydrogen - not a chance..... takes too much power to "create". Electrolysis is used to "create" hydrogen. Where would that electric come from? Chicken / Egg? :P

 

Bio-Fuels - only chance with that is to starve the majority of the planet. Unfortunately. :ninja:

 

Solar power is still not yet feasible either in it's present form... I'm talking to supply to the masses here - cities with populations of 10 million etc.... :)

 

of course, used cooking oil CAN supply a hamlet..... a solar power plant the size of a small town MAY supply enough electric to supply a small village.... and hydrogen can run a handful of cars.....

 

but all these things are hardly going to save mankind! Not unless we go through some serious forced socioeconomic, geographical, changes.... (something on the lines of MadMax?)

 

Governments have spent too long sweeping the smelly stuff under the carpet and sticking their heads in the sand...

 

Time's up - Oil is on the verge of running out!!!! Research and Development funds need to be released in unprecedented scales.....

 

That CNN link from Shep is total propaganda-driven crap. (nothing personal Shep, just the link that you provided).......

 

Typical "eat, drink, sleep OIL!" US-based greed "don't worry, there's plenty left"......." The prat of an author / editor who wrote it, Shawn Tully, could do well looking at every other law of economics out there..... when supply drops as demand increases THEN PRICES GO UP!!!!! In fact, he's actually a SERIOUS prat (or more likely was "sponsored" into writing such dross!) as he's comparing housing markets (with no fixed number of commodities - we can always build more!) to the oil market (which is limited, full stop......)

 

Oil prices will not drop now... not significantly..... if it drops 5% for a few weeks before jumping up a further 15% then that's not a drop in price, it's market fixing and is one of the cheapest ways of "reassuring the consumer"...

 

Oh my - you should all check out the "debate" that Shawn Tully has sparked off:

 

http://talkback.blogs.fortune.cnn.com/2008...ices-will-tank/

 

An interesting mix of the outright stupid, the outright stupidly optimistic, the outright panicky scared and the odd sane one chucked in for good measure.... in fact a good mix from society nowadays!

 

Simply put..... We are on the verge of reaping exactly what we've been allowing our governments to sow for the last century..... DOOM!

 

I'm with Dean (Mel Gibson) B on this one - MadMax is just around the metaphorical geological corner....

 

I'm off to make myself an aluminium boomerang with cool-arse-razor-blade-sharp edges!

 

You should all do well to log onto:

 

http://www.lastoilshock.com

 

spend some time looking through it.... it's freaky.... global oil production is close to DECLINE!!!

 

bloody hell my soapbox is getting really well used this month :lol:

 

Has anyone read "GridLock" by Ben Elton? He's got a fantastic conspiracy theory in there.... (and no, I'm not some conspiracy nut.... I just find these "theories" an interesting read.....)

 

now where's my angle-grinder gone? ;)

Edited by WaterWorks

Share this post


Link to post
Share on other sites

Interesting Post.

Diesel here is now $2.10 per liter and we have oil rigs like 30 km off the cost from us here, they ship it all over seas... :) The oil industry, speculators etc have gone to far now and shot themselves in the foot.

 

I think Hydrogen is going to come out and kill the greedy oil companies in the next decade. There is just way too many people playing around with it that governments and oil companies can not silence anymore plus the way it gets spread around the internet now days.

 

Do a search on Hydrides....there is some pretty cool work going on there to store hydrogen with. As for getting it out of the water, well there are many cheap ways to achieve it. From that you run it through a fuel cell and out you get is water, heat and electrons to power a electric motor. Put a fuel cell beside your house and you get free electricity and hot water.

 

You cannot run a engine on pure hydrogen as it will rust the engine but you can make engines to run on it, but lets face it the old piston going up and down it pretty inefficient and long in the tooth now. Did you know that when the internal combustion engine was fist made, guess what they ran it on............Hydrogen :ninja:

 

OIL is history and so are the big greedy oil companies.

Share this post


Link to post
Share on other sites

Sponsors

Advertisements



×
×
  • Create New...