u.s. oil consumption

[Miroslav]

Re: u.s. oil consumption

^^^ China is already using more and more oil every year, irrespective of what we do. And you can be damn sure they won't slow down. And neither will we - not in the foreseeable future. It sounds a bit ironic, but in reality we can't afford not to consume the oil.

[day_for_night]

Re: u.s. oil consumption

That is true, but hardly surprising. Think about what goes into making/transporting that spring water. Oil is used to create the plastic for the bottle, and to truck the water to your store shelf. When you think about our daily lives and all the little things we do, and then think about how much energy must be consumed for us to have these things.... it's really amazing.

what in god's name are you talking about?? it costs more to make and transport spring water than it does oil??! thats news to me. my company is in the process of drilling a new exploration well (with some partners) here. Its gonna cost us $64 million dollars for *one* well, in about 1000 ft of water, that may or may not have enough recoverable reserves to make it a viable find. if all of the top 5 spring water companies spent that much to find water in the last decade, i'd be shocked.

oil costs significantly more per barrel than spring water. the only reason oil companies make more than companies that sell water is...the world uses alot more barrels per day of oil than spring water.

[beanzncheez]

Re: u.s. oil consumption

Your company? Us?

[Miroslav]

Re: u.s. oil consumption

what in god's name are you talking about?? it costs more to make and transport spring water than it does oil??! thats news to me. my company is in the process of drilling a new exploration well (with some partners) here. Its gonna cost us $64 million dollars for *one* well, in about 1000 ft of water, that may or may not have enough recoverable reserves to make it a viable find. if all of the top 5 spring water companies spent that much to find water in the last decade, i'd be shocked.

oil costs significantly more per barrel than spring water. the only reason oil companies make more than companies that sell water is...the world uses alot more barrels per day of oil than spring water.

I think you confused him when you said "a barrel of oil costs less than a barrel of water". That statement taken alone is a bit vague: does it cost less for the consumer to purchase, or less for the manufacturer to produce? I expect you were making the former point, which from a typical consumer standpoint is stylistically accurate. I agree that the latter is most certainly not true.

Buy 1 20-oz bottle of water from a vending machine: $1.00 (if not $1.25, but we'll be conservative).
$1.00/20oz = $0.05 / oz

Buy 1 gallon of gas at, say, $3.75 today. That's 128 oz.
$3.75/128oz = $0.03 / oz. (rounded)

Holding water prices fixed, break-even between the two is somewhere around $6.40 per gallon of gas.

The big difference, of course, is that bottled water is a vanity purchase, whereas gas is essentially a necessity.

[beanzncheez]

Re: u.s. oil consumption

Why are you comparing the cost of bottled water to gasonline when we are talking about oil? I understand that oil is used to produce gasoline but that isn't an accurate comparison. The true point of the story is, kill all Chinese and we'll be just fine. Who's with me?

[Miroslav]

Re: u.s. oil consumption

^^ good point. fuck if I know and yes getting rid of the Chinese would probably help

[day_for_night]

Re: u.s. oil consumption

gasoline is not oil. gasoline costs includes refining, transportation costs, downstream markup, taxes, etc.

here is an example of per barrel costs of some commonly purchased consumer items. this is a bit stale (about a year old), from when oil was at $60 a barrel.

Costs per barrel
oil = $60
gasoline = $105
Cocacola = $134
Milk = $191
Evian Water = $410
Starbucks cafe latte = $890
Paint = $940
Beer = $960
Olive Oil = $1481
Red Wine = $3650
Johnny Walker Red Label = $4480
Johnny Walker Black Label = $6480
Johnny Walker Blue Label = $35200
Chanel #5 = $2,000,000


If that doesn't put it into perspective, especially when you consider the upfront costs that oil companies incur to find new reserves (2D & 3D seismic, drilling, labour, rig rental, etc etc etc), of how truely cheap a barrel of oil is I don't know what will.

Even with oil at $120 a barrel, its still cheaper than a barrel of cocacola!

[Miroslav]

Re: u.s. oil consumption

^^^ I assume your comparison data is based on proportional manipulation of consumer prices as opposed to actual fully-loaded COGS or something like that....

[toasty]

Re: u.s. oil consumption

gasoline is not oil. gasoline costs includes refining, transportation costs, downstream markup, taxes, etc.

here is an example of per barrel costs of some commonly purchased consumer items. this is a bit stale (about a year old), from when oil was at $60 a barrel.

Costs per barrel
oil = $60
gasoline = $105
Cocacola = $134
Milk = $191
Evian Water = $410
Starbucks cafe latte = $890
Paint = $940
Beer = $960
Olive Oil = $1481
Red Wine = $3650
Johnny Walker Red Label = $4480
Johnny Walker Black Label = $6480
Johnny Walker Blue Label = $35200
Chanel #5 = $2,000,000


If that doesn't put it into perspective, especially when you consider the upfront costs that oil companies incur to find new reserves (2D & 3D seismic, drilling, labour, rig rental, etc etc etc), of how truely cheap a barrel of oil is I don't know what will.

Even with oil at $120 a barrel, its still cheaper than a barrel of cocacola!

Uh, I'm not quibbling with the figures here, but if what you're suggesting is true, why is it that we never hear about olive oil or paint barons pulling in billions of dollars in profit a month? I have a feeling this isn't really a fair way to assess the FMV of oil.

[toasty]

Re: u.s. oil consumption

^^ftr, "FMV" probably isn't the right measure to use there, but I'm not an economist, so I'm just going to trust that you all know what I mean here...

[day_for_night]

Re: u.s. oil consumption

Uh, I'm not quibbling with the figures here, but if what you're suggesting is true, why is it that we never hear about olive oil or paint barons pulling in billions of dollars in profit a month? I have a feeling this isn't really a fair way to assess the FMV of oil.

because the world uses 88 million barrels of oil a day, and nowhere near that much olive oil. what would you suggest is a fair way to value oil if not wholesale market price?

[day_for_night]

Re: u.s. oil consumption

^^^ I assume your comparison data is based on proportional manipulation of consumer prices as opposed to actual fully-loaded COGS or something like that....

its what it would cost you to buy it on the open market, not COGS.

[Miroslav]

Re: u.s. oil consumption

Uh, I'm not quibbling with the figures here, but if what you're suggesting is true, why is it that we never hear about olive oil or paint barons pulling in billions of dollars in profit a month? I have a feeling this isn't really a fair way to assess the FMV of oil.

Well, it has some "apples and oranges" issues. I think it is comparing the market price of a manufacturing input/intermediate good with market prices of final consumer goods. It is not a consistent way to measure it from a typical end consumer's point of view.

Furthermore, I think there is a more fundamental qualitative mismatch in just comparing oil and spring water in terms of financials: the first is essentially a basic necessity, while the second is a luxury/vanity purchase. They are just different animals in most peoples' eyes for obvious reasons.. Most consumers - and particularly the lower part of the income distribution - are going to get a lot more riled up about rapid inflation of an unavoidable necessity than of Chanel No.5, fancy red wine, or a Starbucks latte.

[toasty]

Re: u.s. oil consumption

because the world uses 88 million barrels of oil a day, and nowhere near that much olive oil. what would you suggest is a fair way to value oil if not wholesale market price?

Look, as I said, I'm no economist -- but I do know that we shouldn't start high-fiving people as we pay ever-increasing prices for gas at the pump on account of Johnny Walker Blue costing $35200 a barrel. "Thank goodness my car doesn't run on Johnny Walker Blue" is not a sentence I've ever used before and the reason is simple -- it's an absurd and overly simplistic way of analyzing the issue. For one thing, oil is a raw commodity traded in commodities markets, whereas Johnny Walker Blue is a delicious scotch whiskey that you have to ask the liquor store clerk to get out of a locked glass case.

Oil companies have costs associated with the production of their product at the front end, back end, and everywhere in between. This is a feature they share with probably every industry on the planet -- I'm not going to give them a pass because they have operational costs.

[day_for_night]

Re: u.s. oil consumption

Well, it has some "apples and oranges" issues. I think it is comparing the market price of a manufacturing input/intermediate good with market prices of final consumer goods. It is not a consistent way to measure it from a typical end consumer's point of view.

Furthermore, I think there is a more fundamental qualitative mismatch in just comparing oil and spring water in terms of financials: the first is essentially a basic necessity, while the second is a luxury/vanity purchase. They are just different animals in most peoples' eyes for obvious reasons.. Most consumers - and particularly the lower part of the income distribution - are going to get a lot more riled up about rapid inflation of an unavoidable necessity than of Chanel No.5, fancy red wine, or a Starbucks latte.

of course one is a necessity and one isn't, my point wasn't to imply they are treated equally in the eyes of the consumer...it was just to highlight that, given all that goes into finding and transporting a barrel of oil, it is still remarkably cheap relative to things we would assume to be less expensive than oil. this is by no means an exhaustive comparison, just something to think about when we see the price of oil doubling in a year.