atomic_fungus (atomic_fungus) wrote,

#4868: Energy and grim economic news

Crude oil is already trading lower than it has in a very long time. $43 a barrel--because of inventory build, mainly; OPEC is keeping the taps wide open to put the Dakota shale boys out of business, and Iran is now able to sell its oil again, too--so even at a time when American refineries are running flat out, it's cheap as tap water, just about.

And as the linked article attests, American refineries don't run flat-out year-round without maintenance. They can't--no machine can, and a refinery is merely a complex machine--and the consumption of crude will taper off as the summer demand does. People put away the boats, the motorcycles, the sports cars. The oil companies expect it, and schedule accordingly.

The problem is, there's no excess capacity; if one refinery goes down unexpectedly, the rest have to make up for it, and then gas costs more.

Union Pacific is cutting hundreds of jobs because coal shipments are down 26%, because Global Warming And Clean Air.

And automakers are ramping up production into decreasing demand. The auto industry is a sizable chunk of the US economy; there's no two ways about that. But the demand for new cars is soft because they cost too damned much money--an econobox will set you back twenty grand--and in a depression sensible people will hold on to something that's paid for rather than trade it in on the new whizzbang.

New cars are expensive. It's not just inflation; if it were you wouldn't be seeing a prevalence of 60-, 72-, and 84-month loans--five, six, and seven years, respectively.

If car prices were merely inflated, the ability of people to pay the monthly payments would have kept pace, and 60-month loans would still be the upper limit. But because car prices have outstripped the ability of the average person to pay them, now we see these longer-duration loans.
$500 x 60 = $30,000
$500 x 72 = $36,000
$500 x 84 = $42,000
...and one must remember that the final figure includes interest, not just principal, so that 60-month loan will buy perhaps $18,000-$20,000 worth of car, depending on interest rate...and as I said you can barely get into an econobox for that.

If there is anywhere that deflation is needed it is in the automotive industry.

* * *

Turns out that geologist who slammed the EPA knows a little something about the subject of groundwater containment, having worked as a geologist in the field at various mines around the world for some forty-seven years.

Apparently the EPA just went in there with heavy equipment and started digging, without evaluating what kind of conditions were present, and the consequences--which were easily predictable by an expert, even in the absence of knowing exactly what the conditions were--surprised them.

Gee, I didn't know Walter Peck had moved from New York to Colorado.

* * *

I have much to do today.

I got home from my early-morning errands and just collapsed after the blog post was done; I slept nearly three hours and woke up wanting more. But I was hungry, and my unfinished projects gnaw at me, so I got up.

The list of errands must be completed, and I think I'm also going to go to Autozone and order that brake caliper, since they've got the best price of any of the parts stores. The pins won't move, and the hardware kit I need to make them move again is half the price of a new caliper, so screw it.

I need to get after the Jeep's other side, too; at least I need to examine it and see what sort of condition it's in. That'll have to be Sunday; my Saturday is spoken for.

Man, it seems like Monday was yesterday. *sigh*

  • Post a new comment


    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.