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Given that oil is at an all time low... any chance GW will be passing on the material cost saving to their customers?

I mean they have always used the cost of raw materials as an excuse to roll out price increases, any chance of it coming back the other way GW? No? Didn't think so. Shame though, it will potentially mean you will be able to hide falling sales behind the savings of the raw materials.

Citadel GreenCast™, a non-petroleum-based plastic material to save the environment!





You know it could happen!

All time low? Hardly. It is much more affordable at the moment though, I can even go for a drive for fun again.

It's nice to drive for leisure without paying through the nose.

Still waiting to see if Congress going to increase the gas tax...

That would be criminally slowed, even for the U.S. Congress, this low isn't going to last forever.

One of my major hobby expenditures is the gas to drive to my FLGS, so this is good news!

 KalashnikovMarine wrote:
That would be criminally slowed, even for the U.S. Congress, this low isn't going to last forever.

Very true. In my years, I have seen this cycle at least 5 times. This Time around, Saudi Arabia is trying to drive the American and other competition out of business by flooding the market with cheap oil. Once the smaller copetitors are laid to the side, watch the prices shoot up within a year or less. My money is on prices coming back up around September or October.

We need to kick OPEC in the balls with Nuclear power.

 KalashnikovMarine wrote:
We need to kick OPEC in the balls with Nuclear power.

As someone who works with nuclear power as part of my job, all the yes.

I just want to know how much support I can get to protest wind and solar power plants. We can carry around signs like "criminal inefficiency" and "Solar power wastes real-estate." Heck, it's a more valid point than most of the things people protest nuclear power over...

I'm not normally a fan of this webcomic, but I appreciate this one.

 Wolfstan wrote:
Given that oil is at an all time low... any chance GW will be passing on the material cost saving to their customers?

I mean they have always used the cost of raw materials as an excuse to roll out price increases, any chance of it coming back the other way GW? No? Didn't think so. Shame though, it will potentially mean you will be able to hide falling sales behind the savings of the raw materials.

GW's reply

The part of the price of a model accounted for by the materials cost is pretty damn low. You're paying for the employees, manufacturing equipment, shipping, marketing, brand and shelf space far more than you're paying for the plastic. I'd be surprised if it represented even pennies on the dollar.

 KalashnikovMarine wrote:
We need to kick OPEC in the balls with Nuclear power.

Don't need to. OPEC members tend to kick each other in the balls. Member countries like Venezuela are being murdered by this latest Saudi ploy.

Keystone Pipe Line. Lets DO IT!!!

 Jihadin wrote:
Keystone Pipe Line. Lets DO IT!!!

That'll be an interesting fight.

Low oil prices mean it's certain that prices will rise in the future. So the drop in oil prices means they need to raise their prices to protect against future fluctuations.

 Wolfstan wrote:
Given that oil is at an all time low... any chance GW will be passing on the material cost saving to their customers?

I mean they have always used the cost of raw materials as an excuse to roll out price increases, any chance of it coming back the other way GW? No? Didn't think so. Shame though, it will potentially mean you will be able to hide falling sales behind the savings of the raw materials.

GW is a UK manufacturer and in the UK the price drop in oil has not been passed onto customers but absorbed as raw profit.

I wonder what idiot going to try to slide that Bill in to increase the gas tax and pretend the gas prices are not going to rise again.

In theory the drop in oil should lead to a drop in commodity prices for products derived from oil, such as plastic. Of course you have to assume the producer of the plastic is passing along the cost savings they are achieving as the result of the drop in oil. Furthermore often manufactures (like GW) have hedged on a certain price and agreed with their supplier on a contract for a fixed term and may not be able to take advantage of the lower price immediately or even in the long term depending on the length of the contract. The incentive for entering into these contracts is to be able to fix the price of supplies to remove the uncertainty in costs and to protect against potential price spikes. The downside is manufactures may not be in a position to take advantage of price drops when they occur.

In other words GW maybe still paying for plastic under a contract written months before the price of oil collapsed. That said, they have no incentive to pass along any cost savings as 1) they have made clear their pricing is based on what they think the market will pay for their niche product and 2) the price of oil may recover as rapidly as it has collapsed, but regardless will recover to some degree.

BTW kudos to dementedwombat for sharing the fuel energy density cartoon and pointing out the inefficiency of some of the more popular "green" energy solutions. The problem is the cost per density is quite different for each of the energy sources cited owing to mining, engineering, construction, regulatory, and disposal costs for Nuclear power vs. the other sources which continues to depress demand for new nuclear plants.

 Orlanth wrote:

 Wolfstan wrote:
Given that oil is at an all time low... any chance GW will be passing on the material cost saving to their customers?

I mean they have always used the cost of raw materials as an excuse to roll out price increases, any chance of it coming back the other way GW? No? Didn't think so. Shame though, it will potentially mean you will be able to hide falling sales behind the savings of the raw materials.

GW is a UK manufacturer and in the UK the price drop in oil has not been passed onto customers but absorbed as raw profit.

It has come down a fair bit. It was £1.30 a litre, I'm getting it at £1.05 at the moment (that's $6.02 per gallon for our US friends we do get charged over 60% tax on fuel though)

 dementedwombat wrote:

 KalashnikovMarine wrote:
We need to kick OPEC in the balls with Nuclear power.

As someone who works with nuclear power as part of my job, all the yes.

I just want to know how much support I can get to protest wind and solar power plants. We can carry around signs like "criminal inefficiency" and "Solar power wastes real-estate." Heck, it's a more valid point than most of the things people protest nuclear power over...

I'm not normally a fan of this webcomic, but I appreciate this one.

How do you feel about LFTRs/Thorium?

There will be holes in whoever comes up with the idea as usual for such finely crafted products.

 n0t_u wrote:
There will be holes in whoever comes up with the idea as usual for such finely crafted products.

Like finecast? - literally

Oil prices being low is going to only be a temporary thing.
OPEC is messing with the market because US oil is coming in huge droves via fracking. Only thing is that fracking is not sustainable at $50 a barrel. It's too expensive to drill via fracking at $50 a barrel. We need to see if US oil evolves or takes a dump.

It's time for a shutdown at the fracking sites, it seems. Or, stockpile, and when OPEC puts their prices up, put them back on the market.
Is there any way to call OPEC's bluff? Surely there are reservoirs around the world we can fill up, waiting for the prices to revert.

Or, is it a way for the reliance on oil to slap renewables one more time?

 Jihadin wrote:
Keystone Pipe Line. Lets DO IT!!!

Keystone XL will not lower domestic gas prices - in fact, it may increase them.

 Ouze wrote:

 Jihadin wrote:
Keystone Pipe Line. Lets DO IT!!!

Keystone XL will not lower domestic gas prices - in fact, it may increase them.

Gas or gasoline?

 dementedwombat wrote:

 KalashnikovMarine wrote:
We need to kick OPEC in the balls with Nuclear power.

As someone who works with nuclear power as part of my job, all the yes.

I just want to know how much support I can get to protest wind and solar power plants. We can carry around signs like "criminal inefficiency" and "Solar power wastes real-estate." Heck, it's a more valid point than most of the things people protest nuclear power over...

I'm not normally a fan of this webcomic, but I appreciate this one.

Although I agree in principle, how do they compare efficiency-wise? ie, how many of those 76M MJ are actually transferred onto the electricity net? (I realise it will still be heaps more than from the nearest contender, I'm just curious.)

Honesty (and yes, I know you were joking.) also compels me to say that solar power doesn't have to waste real-estate. I have solar panels on my roof, and that certainly isn't wasted real estate. If anything it improved the value of my house. And neither is a few square miles of otherwise worthless desert "wasted real estate". There are legitimate criticisms to solar power (and wind turbines), but that isn't one of them.

Johnnytorrance wrote:
Oil prices being low is going to only be a temporary thing.
OPEC is messing with the market because US oil is coming in huge droves via fracking. Only thing is that fracking is not sustainable at $50 a barrel. It's too expensive to drill via fracking at $50 a barrel. We need to see if US oil evolves or takes a dump.

Oil at below $50 a barrel is not sustainable for anyone, even the sweet, easy to refine crude that typifies what Saudi Arabia produces. This is pure and simple a play by Saudi Arabia to protect and possibly regain market share as well as put pressure on countries like Iran, whose sanction battered economy relies very heavily on the cash generated from its oil exports. Saudi Arabia is in a position to do this as they have enough cash on hand to weather losses in the short term.

There is also some conjecture that Saudi Arabia is also attempting to reign in the OPEC members that habitual exceed output quotas as well as putting pressure on Russia to "consult" more with Saudi Arabia and OPEC on output.

As for the US producers, some of them can weather the low prices for some time because they have long term contracts that locks the oil they are producing in at a fixed price. It will be the small to midsize producers with limited well portfolios that maybe squeezed or will have to shut down their wells (and layoff workers, stop buying spare parts, etc.) The Majors are responding by cutting CAPEX, moth balling projects and some wells along with layoffs which in the short term shores up their profit margin.

Some commodity buyers/sellers have resorted to "tanking" their oil by converting oil tankers to floating storage units that will sit and not deliver the oil in their holds until the price of oil increases.

In all this a could be thought of as a big game of chicken with Saudi Arabia (and by extension OPEC) on one side and non-OPEC producers (Russia, US independents, North Sea producers) on the other.

The danger is that while in the short term cheap oil means more cash in the pocket of the average consumer, it will in the long term become a drag on the economy as all the business activity (and taxes they generate) related to the oil industry starts to contract, first in the oil producing regions (North Dakota, Texas), then outward from there. Basically you can't have a major engine of the world economy working at a loss without eventually negatively impacting the rest of the economy.

Another unintended side effect is that cheap oil makes green energy look even more inefficient and expensive than it already is, lower further the demand for it and increasing the amount of subsidies (i.e. tax money) required to support or sustain it.

A remarkably enlightened post.