Gas prices are... um well, wait a minute

[Sooner or later]

https://m-economictimes-com.cdn.ampproject.org/v/s/m.economictimes.com/industry/energy/oil-gas/as-crude-fades-big-oil-must-borrow-to-pay-investors/amp_articleshow/114686048.cms?amp_gsa=1&amp_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From%20%251%24s&aoh=17301724559377&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Fm.economictimes.com%2Findus try%2Fenergy%2Foil-gas%2Fas-crude-fades-big-oil-must-borrow-to-pay-investors%2Farticleshow%2F114686048.cms

Weaker crude prices and refining margins are likely forcing four of the five supermajor oil companies to borrow money to fund $15 billion in share buybacks for the most recent quarter, raising doubts over the payouts’ long-term sustainability.

Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc are expected to post a 12% dip in earnings from last quarter to a combined $24.4 billion when they report results this week, according to the average of analysts’ estimates compiled by Bloomberg. That will leave them all — except Shell — unable to cover their dividends and buybacks with free cash flow, which is expected to be 30% lower than a year ago

Refining, which often helps keep earnings steady when oil prices drop, is also under pressure. Exxon, TotalEnergies, BP and Shell have all warned of falling margins at their fuel-making divisions globally in the third quarter, as demand for fossil fuels wanes and supply grows.

More at link

[Sooner or later]

I don't know of the authors of this article. More at link.

https://oilprice.com/Energy/Energy-General/Is-Drilling-Just-Digging-Investors-Deeper.html

Is Drilling Just Digging Investors Deeper?
Oil companies have historically underperformed, with reinvestment often eroding shareholder value rather than enhancing it.

Given weak demand and ample supply, further oil production may only lower prices, questioning the wisdom of recent acquisitions and aggressive drilling strategies.

The oil and gas industry’s investment record is so bad as to beggar the imagination. Over the ten years ended October 24, 2024;

Investors in S&P Global oil and gas stocks collected an annual dividend of 4.15% but the stock price declined 1.10% a year, so they earned a 3.05% a year total return.

In contrast, investors in the S&P 500 (a proxy for the market as a whole) collected a 2.06% dividend a year and and stock price rose 11.45% annually, for a total return of 13.51%.

Those dull electric utilities in the index collected a 3.67% annual dividend and their stocks rose 6.23% a year, for a total return of 9.90% per year.

The clean energy stocks in the index, badly beaten down recently, produced a 2.13% annual dividend for shareholders plus a 2.65% annual price increase, for a 4.78% per year total return.

Finally, index stocks in our favorite resource play, water, paid a 2.42% dividend each year and stock price rose 7.90% annually, for a 10.32% total return.

[stevej37]

We have a few stations at $2.66 and others at $2.81
Must be headed up.

[cabmandone]

sombichez got gas around here at 2.99 to 3.19.

[stevej37]

^^^ Hah!
About time we have the best price up here.

[wdfifteen]

Prices are all over the map here. Drove into Dayton Tuesday. I saw gas prices from $2.65 ( at an independent Shell station) to $3.19 (Speedway) within about 5 blocks of each other.

[VINMAN]

Up .10 around here.

.

[Shaun @ Tru6]

Originally Posted by wdfifteen

Prices are all over the map here. Drove into Dayton Tuesday. I saw gas prices from $2.65 ( at an independent Shell station) to $3.19 (Speedway) within about 5 blocks of each other.

this mirrors my experience here, for 93 it's between $3.69 w/ 10% ethanol to $4.19 for real gas.

I've been paying $3.87 for 93 at Cumberland Farms for real gas.

[Sooner or later]

Originally Posted by Sooner or later

10/28
Regular as low as $2.49.
Premium $2.98
Diesel $2.84

Gas prices continue to drop. Crude down 3% today. WTI at 68.14 a barrel. China growth in the crapper.

Regular under $2.40
Premium under $2.85
Diesel under $2.80

[stevej37]

$2.64/reg $3.64/prem
I like it.

[Sooner or later]

China economy along with high EV conversion. OPEC needs volume. Nut cutting time is coming. Repeat of 2015/2016 when Saudia Arabia flooded the market to force US shale into bankruptcy? Ultimately, they failed and a efficiency driven US shale reigned supreme. Crude prices are already on the verge or where it might not be profitable for some to drill new wells.

https://oilprice.com/Energy/Energy-General/IEA-Warns-of-Oil-Market-Surplus-Amid-Weak-Demand-in-2025.html

Chinese oil demand contracted for a sixth straight month in September. In the third quarter of 2024, average demand in the world’s top crude oil importer was 270,000 bpd below the average for the same period last year, per the IEA’s estimates.

While demand is sluggish, global oil supply is rising “at a healthy clip,” the agency said. The United States will continue to lead non-OPEC+ supply growth of 1.5 million bpd in both 2024 and 2025, along with higher output from Canada, Guyana, and Argentina

“Our current balances suggest that even if the OPEC+ cuts remain in place, global supply exceeds demand by more than 1 mb/d next year,” the IEA said. More at link...


WTI is at 69 a barrel this morning. The following is from March of this year. Dallas Fed O&G Survey. This is always an excellent source of info. They do a quarterly survey. Much more at link.

https://www.dallasfed.org/research/surveys/des/2024/2401#tab-questions
In the top two areas in which your firm is active: What WTI oil price does your firm need to profitably drill a new well?
For the entire sample, firms need $64 per barrel on average to profitably drill, higher than the $62-per-barrel price when this question was asked last year. Across regions, average breakeven prices to profitably drill range from $59 to $70 per barrel. Breakeven prices in the Permian Basin average $65 per barrel, $4 higher than last year. Almost all firms in the survey can profitably drill a new well at current prices. (The WTI spot price was $83 per barrel during the survey period.)

Large firms (with crude oil production of 10,000 barrels per day or more as of the fourth quarter of 2023) require a $58-per-barrel price to profitably drill, based on the average of company responses. That compared with $67 for small firms (fewer than 10,000 barrels per day).

[Sooner or later]

https://oilprice.com/Latest-Energy-News/World-News/National-Gasoline-Prices-Fall-Below-3-Per-Gallon.html

The U.S. national average price of gasoline has fallen below $3 per gallon for the first time in more than three and a half years. According to GasBuddy data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country, the average national gasoline price was $2.97 per gallon on Monday, a level they last touched in 2021. De Haan has noted that some 35 U.S. states now enjoy average gas prices below $3 per gallon, an increase of seven states from a month ago.

[stevej37]

With prem. at $3.64 here, I don't mind filling up when I know I can travel 40 miles for less than $4
Hopefully it will stay around that price.

[JackDidley]

Sams has not changed prices for a couple weeks. $2.53 ND $3.23. I can go 40 miles for about $5.

[cockerpunk]

pretty solid here, right around $3.00, same as its been for a few months.

since we import most oil here in the upper Midwest tariffs are gonna hit hard.

[VINMAN]

Back up $ .15 the past week...

.

[cabmandone]

2.99 on the West side of Lima. 3.25 in Delphos. When will big oil end the persecution of the average Delphos resident? Why must they always have our prices higher than other surrounding areas? Why do they hate me?

[stevej37]

2.93/reg 3.93/prem here.

Still a dollar spread.

[KFC911]

I paid 2.74 for 87 a few days ago... alas... I now have a top-shelf drinker ... looks like Ima gonna pay about .85 more here too.

'cause they can...

[Sooner or later]

Around

$2.40 reg
$3.10 premium