Just a random musing. As EV’s become more popular, means less gas being used, means potentially lower prices since supply of gas should increase? Or do they just cut production and keep prices the same.
Wondering what will happen in the long term.
Probably not, as many other industries use gas, including electricity power plants.
Also, at least in Europe, once you include income tax over 70% of the gas price ends up in taxes and the rest is the actual gas and the profits for the fuel station.
Which makes sense considering how expensive car infrastructure is. EVs should also pay for the infrastructure at some point, it just wouldn’t be fair otherwise, so comparatively to electricity, yes, it’s probably going to stop being so much cheaper.
Diesel is more expensive than gas, although less refined. Why’s that?
The same will happen with gas as its demand dwindles.
Yes and no. Overall demand falling will lower prices initially, but at some point it will become much less profitable to make gas and the supply chain will condense and consolidate in turn increasing prices. Basically, supply should scale to demand.
It’s complicated to NO.
Peak gasoline consumption may have been in 2018. Gasoline demand will probably only continue to decrease from here on out.
That doesn’t mean that Gasoline supply will stay the same though. Refineries will be adjusted to make more of other products. In the short term, gas prices may drop because of over supply, but then supply will be cut.
As supply goes down we will eventually reach a point where gas becomes a niche product and it costs more again because it’s rare.
1846: The Year We Hit Peak Sperm Whale Oil
(TLDR: Yes, the price of oil will fall.)
yes
It will not decrease that much. Also doesn’t go up that much because the shale oil in the US will ramp up production.
If the price decrease, at some point it will, the Middle East is the place that cost the least to produce oil, so everyone goes out of business except them. Prices will be around 50 to 100 dollars for some time.
The bigger advantage would be politic, Middle East and other oil producers can influence US politics because US consumers buy gasoline, it’s one of the few commodities that people buy directly and are very sensitive to price volatility. If people switch to EV will care less about the price, the same way no one knows the price of the lithium today or yesterday.
Prices may go down or level off in the short term. However as demand drops, there won’t be enough volume to sustain the infrastructure overhead for oil mining and refining. They need a minimum volume to be profitable. As demand continues to drop, some of them will be forced to close down, which reduces supply, which raises prices. Eventually oil will be more of a niche product where specialty suppliers charge high prices.
Not in the short term. OPEC will restrict supply to keep prices up.
OPEC controls is all, they will cut production substantially…but rig workers will get laid off for sure, there will be unemployment associated with a 50% market penetrance.
But we’re a long way from that…Ike long.