Remember the unbelievable predictions that crude oil would go to US$10 / barrel (cheaper than water) and gasoline would go for US$1 / gallon? Well, forget them because it’s already happening even though officially the crude WTI and Brent are trading above US$20 / barrel. However, the fact that both crude oil prices have gone under US$30 go to show the worst is not over yet.

 

If you think US$20 / barrel of crude oil is a fantasy to consumers and a nightmare to oil producers, think again. In Canada, the producers would be more than happy to sell it for US$10 / barrel. Last Tuesday, Canadian oil sands producers were selling their bitumen for US$8.35 / barrel. Bitumen is selling at cheaper rate because it has to be diluted with more-expensive lighter petroleum.

Just like normal crude oil which has since tumbled to US$20+ from more than US$100 a barrel roughly 18-months ago, oil sands bitumen suffers the same fate – plunging to US$8.35 from US$80 a barrel less than 2-year ago. And if you wish to buy ultra low quality (high-sulphur) crude, you could literally get it for “free”.

 

As a consumer, you’re not interested on crude oil, of course. What consumers want now is cheap gasoline or petrol. Well, guess what, you don’t have to wait for WTI or Brent to go to US$20 a barrel to enjoy gasoline at below a buck / gallon. Over the weekend, some stations have already started the price war.

In Michigan, three Houghton Lake stations brought cheer to motorists when they slashed their prices to below US$1 / gallon. The Beacon and Bridge Market in Houghton Lake went bonkers when it slapped a crazy price tag – 47-cents a gallon – at its station, followed by Sunrise Marathon (station across the street) which cut it by additional 1-cent to 46-cent a gallon.

 

The mad price on Sunday attracted so many cars that police were called in to direct traffic. The 3-day weekend mad sales started when prices dropped from 95 cents, to 78 cents and eventually to 46 cents before the “price war” ended. However, by Monday the prices returned to “normal”. Both Beacon and Bridge Market and Sunrise Marathon’s latest price was US$1.31 / gallon.

The last time gasoline sold at 46-cent a gallon was in 1973 when President Richard Nixon was the commander-in-chief at White House and the King of Rock and Roll – Elvis Presley – ruled the music world and sold over 1-million copies of his “Elvis” album. It was also the year the legendary Bruce Lee reaches his peak but dies at age 32.

 

It’s unknown if those stations involved in the price war would do it again this coming weekend. The Michigan price war could be a one-time publicity stunt to attract customers. The present average gasoline price in U.S. is US$1.884 / gallon. The lowest price is US$1.26 / gallon in Oklahoma with an average price of US$1.550 / gallon.

Still, if you’re not too far away from the three Michigan stations – Citgo, Beacon and Bridge Market and Sunrise Marathon – this coming week-end, you may want to try your luck. At US$0.46 / gallon, that’s roughly US$0.12 a litre (£0.084 a litre; RM0.527 a litre), which is quite insane.

 

Other Articles That May Interest You …

• Cheaper Than Water – This British Bank Thinks Oil Would Go To $10 / Barrel
• Forget About Gas At $2 – It’s Going Toward $1 / Gallon
• China (Secretly) “Devalues” Yuan – Global Recession Is Calling
• Meet United States – The World’s Latest Oil Exporter – After 40 Years
• Here’s Why Oil Above $100 Will Never Happen Again, Ever, Forever!!
• Forget About US$30 Oil Price – It Could Hit US$20 Per Barrel Next Year
• The Glory Days Are Over – OPEC Warlord Saudi Has Started Borrowing
• This Country Is So Badly Hit By Oil Prices That Having Sex Is Impossible

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January 19th, 2016 by financetwitter

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