Despite a collapse in oil prices of 50 percent since summer’s end, Saudi Arabia, whose vast production capacity has enabled that country to modulate world oil prices by adjusting its output, “effectively resigned from that role,” Daniel Yergin wrote in this past Sunday’s New York Times Week in Review. “…OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would ‘stabilize itself eventually.’”
Reuters Energy analyst John Kemp has published a timeline of events that explain the latest crash in crude oil prices. As energy prices enter a new era, we’ll be focusing more and more on this sector, and how it relates to the automobile.
In the 1966 Spaghetti Western classic The Good, the Bad, and the Ugly, the three principal characters come together in what is considered the most iconic standoff in cinematic history. Three parties hostile to each other and the first one to shoot is the most likely loser.
As of 3:03 P.M., a barrel of West Texas Intermediate crude oil is sitting at $49.90 USD. For $42.48, you can get a fifth of Wiser’s Legacy Canadian Whisky – decent stuff, but nothing fancy. If you’ll excuse me, I’m off to buy myself a Hellcat.
TTAC Commentator Arthur Dailey writes:
Sajeev,
Thanks very much for posting my question. Your answer and the comments from others were most informative. How about another?
We now have only 2 licensed drivers in our home. We do however have 3 licensed cars in the driveway. Please do not ask about the project car in the garage. 2 of the cars are our ‘daily’ drives, the 3rd is used primarily on weekends. We live less than 3 minutes from a 400 series highway in Ontario. That means that the cars can be required to reach highway speed before they are ‘warmed up’.
My normal practice last winter was to get up, start all the cars, turn off all possible drains on the batteries. Then take the dog to the park across the street, stretch our legs and let him do his business. After about 10 minutes we return. I then turn on the heater/defrost on the 2 cars that we will be driving and scrape/brush them. When this is completed, I turn all 3 cars off and go back into the house to get myself ready for work. You may all remember what last winter was like and the upcoming winter is supposed to be similar.
Now I understand that idling is environmentally irresponsible. And possibly against by-laws in some areas. That however is a discussion for another forum. (Read More…)
TTAC reader (and Pontiac G8/Holden conversion owner) David Obelcz gives us his thoughts on the current situation in the world of crude oil – and how that will affect car enthusiasts.
Over the Thanksgiving holiday in the United States, Saudi Arabia blocked a proposed production cut by OPEC, sending oil prices plummeting around the world. As I write this the price of oil and gasoline futures are in collapse. West Texas Intermediate (WTI) futures are down over 10% to $66.15 a barrel on the near-month (January 2015) contract, Brent is at $70.15, and gasoline futures are down to $1.90.
Pete writes:
Hey Sajeev, I got one for you.
Several engines nowadays are set up to operate on half their cylinders under light-load conditions. Would the design considerations for piston rings vary from those normally used for such cylinders that are only used part-time? The question arises in the context of a 2009 V6 Accord that is currently in the Honda dealer’s shop to have the piston rings replaced at the manufacturer’s expense to cure a continual oil consumption and spark plug fouling problem.
Global oil prices are on the rise as the crisis in Iraq contributes to market instability. Large chunks of Iraq’s oil production infrastructure have fallen under militant control, leading to a sharp drop in output. Meanwhile, Canadian officials are upset with the Obama administration’s handling of the Keystone pipeline. They contend that the inaction on Keystone is keeping millions of barrels of Alberta crude from reaching more profitable markets.
Several hundred Chrysler minivans are stuck indefinitely on a piece of prime Detroit real estate, unable to be transported across America. The reason? The fossil fuel boom in Canada and the United States is hogging much of the available rail capacity needed to transport the vans.
Evan writes:
Sajeev,
I have a piston slap question for a friend at work. She drives an ’11 Mazda CX-7 2.3. For over a year she has had an issue with fuel in the oil. Enough that the oil level has been as much as 1″ above the full mark on the dipstick as a result (oil level was checked after service, and frequently between services). This is noticed within weeks of service/oil change. (Read More…)
Michael writes:
I am a longtime TTAC reader, but do not comment very often. However, I have a question that perhaps you and the B&B can help me with. I am the owner of a 2011 Kia Soul +, 14,XXX miles. Been a great vehicle so far. (Read More…)
TTAC is no stranger to the topic of Peak Oil, but the theory has fallen by the wayside with the recent explosion in unconventional oil and gas. A study by the British think tank Chatham House argues that the biggest issue facing oil and gas producers in the coming century isn’t Peak Oil, but Peak Demand (summary here).
A brief piece in the Wall Street Journal’s “Dealbook” discussed the potential of natural gas powered vehicles, largely as a way to stop falling prices for natural gas.
One hope for many natural gas producers reeling from collapsing prices is wider adoption of natural-gas-powered cars.
The biggest hurdle so far: lack of infrastructure to refuel them.
But Steven Mueller, CEO of Southwestern Energy, says if 10% of passenger cars were powered by natural gas, gasoline prices would fall by $1.60/gallon and gas producers would get 4 billion cubic feet/day in demand.
Jim writes:
Hi,
I hope you are well. I have several questions regarding my 2011 Forester (5 speed):
a) I drive 8 to 10K annually and change the 5w-20 every 6 months. Is this sufficient?
b) Subaru keeps sending me extended warranty offers. This tells me that I likely don’t need it. What do you think? My favorite moment when purchasing the Forester: The F & I rep mentioning “If people want to drive around without the extended warranty, it is not my problem.” (Read More…)
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