Gasoline Prices set to Plunge, but won’t last

A number of news outlets are reporting that gasoline prices are dropping. OPEC declined to cut production volume in the wake of lower crude oil prices. The conventional wisdom is that gas prices should fall as a result of over-supply and modest demands.
Happy Holidays, From OPEC: Will Gas Drop to $2?
What’s So Bad About Low Gas Prices?

From a prepping point of view, we have to consider that low gasoline prices won’t last forever, and probably won’t last very long. Enjoy low prices while they are here. But there’s no practical way to stock-up on gasoline. It’s too dangerous to keep a significant volume anywhere but in your vehicle’s tank. Why won’t low prices last? It takes several factors combining to lower prices: OPEC volume, a calm crude oil market, limited economic growth, relative stability in most Middle East nations, etc. But if only one factor gets out of whack, the house of cards can fall.

For example, if ISIL (Islamic State) topples Iraq’s government, the oil market might react badly. If any government in an oil-producing nation falls, the same effect may prevail. If Iran gets nuclear weapons, they will break out of sanctions, and the oil markets might panic (or at least get jittery). There are psychological influences to oil and other commodities markets; it’s not all fundamentals.

China or India or another region of the world could, at some point, experience economic growth. In any industrialized nation, growth implies a greater use of fuel to transport goods. Also, in nations where many persons do not own a car, economic improvements mean more cars are bought and used. Demand for crude oil rises and so do prices.

Other than economic and political factors — the complexity of which is beyond my comprehension — there’s the whole “prepper’s disasters scenario”. Any kind of near-TEOTWAWKI scenario can throw a monkey wrench into the gasoline supply chain. Remember how Superstorm Sandy wreaked havoc with gasoline availability. No electrical power means that gas stations don’t work. The ones that do have power become overwhelmed with customers, and run out of gas. The modern supply chain is vulnerable to all kinds of disruptions.

What can we do to prepare for high gas prices or low availability? Not much. Switching to an electric car (not just a hybrid) is expensive, and it makes you vulnerable to power outages. You would just be exchanging one vulnerability for another. Maybe you should buy a nice bicycle to get around town. But I’m too old for that crap. If you can work closer to home or work from home — or at least have a backup plan for travel to work, that would help. But there’s no perfect solution. Some prepping scenarios mean you just have to make the best of the situation. You can’t prep-away every problem.

– Thoreau

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