Fuel prices around the world.

[MoKelly]

Exxon Mobil share price has almost doubled since November.
View attachment 688631
An aunt left me some shares a few decades ago. I’ve never touched them. Value of them has increased $35,000 since November. Over that time period I’ve probably had to spend an extra $45 at the pump. Dang gas prices!
View attachment 688635

Yes - buying oil stocks is a pretty good hedge against higher fuel costs if that is a significant cost of doing business.

MoKelly

 

[CobyRupert]

Delete...

 

[HawkinsHollow]

then I guess radical price increases is cool with you and not me.

You are going to have to lodge that complaint with OPEC, the Russians, Coronavirus and Mother Nature. And I guess with the major oil producers from the look at that stock price graph. I don't think you are going to get very far though.

 

[Hay Dude]

I have some big grain farmers around me and what really hurt them was the commodity grain prices TANKING. Sales to other countries was disrupted so the markets sucked.

Gasoline Prices Adjusted for Inflation | US Inflation Calculator

Again, why should anyone feel better that rising fuel costs aren’t perfectly in line with average inflation? It might work for an occasional small or hobby equipment user, but not for heavy fuel users like farmers or truckers.
Sudden fuel spikes CANNOT be easily compensated for by business owners. Steady increases can, but not a 35% jump in 2-3 months. None of us can pass all of those sudden increases in expenses on to customers.

 

[ruffdog]

Hay Dude...many prices fluctuate depending on supply and demand. Like my post comparing grain prices suggested, if there is a change (like fewer drivers driving during a pandemic), fuel prices will change. You complain of a 35% change in fuel prices but where have you been the past year with steel and lumber prices going up 100%+? Yes, inflation or price swings regardless what products it affects, is shocking to people if they choose to be. Also, take the time to read and understand the site I linked to as it shows how steady fuel prices are (downward) when inflation is figured in. Here is a good article for you to read.

What Is the Relationship Between Oil Prices and Inflation?

 

[MossRoad]

Diesel fuel prices are now returning to the same price they were pre-pandemic. Looking at diesel prices over the past 10 years, it peaked in 2008 at over $4.50 a gallon, by 2009 had dropped to just over $2.00 a gallon, slowly rose through 2011 to around $3.80 a gallon, started dropping in 2014 through 2016 down to just over $2.00 a gallon again. In 2016 it started rising again trough 2019 to about $3.25 a gallon where it hovered all of 2019 at right around $3.00. 2020 it dropped to around $2.50, where it remained most of the year, and is now heading back up, not quite reaching pre-pandemic levels yet. Futures are predicting it to stay around $2.70 for the next year or two. The pre-pandemic level was right around $3.00. (source was Department Of Energy).

Hopefully that stability in prices will happen as they are predicting.

 

[MoKelly]

Futures are predicting it to stay around $2.70 for the next year or two. The pre-pandemic level was right around $3.00. (source was Department Of Energy).

Hopefully that stability in prices will happen as they are predicting.

You can use futures to lock in the price (if the futures price is acceptable or if volatility is unwanted) for as far out as futures trade.

MoKelly

 

[Hay Dude]

Hay Dude...many prices fluctuate depending on supply and demand. Like my post comparing grain prices suggested, if there is a change (like fewer drivers driving during a pandemic), fuel prices will change. You complain of a 35% change in fuel prices but where have you been the past year with steel and lumber prices going up 100%+? Yes, inflation or price swings regardless what products it affects, is shocking to people if they choose to be. Also, take the time to read and understand the site I linked to as it shows how steady fuel prices are (downward) when inflation is figured in. Here is a good article for you to read.

What Is the Relationship Between Oil Prices and Inflation?

Affected by steel and lumber price spikes, too? Affected? Dang near buried me. I have 2 construction projects that have been ground to a halt because of lumber prices! Its not just fuel for farming that I have to deal with.

 

[Hay Dude]

Diesel fuel prices are now returning to the same price they were pre-pandemic. Looking at diesel prices over the past 10 years, it peaked in 2008 at over $4.50 a gallon, by 2009 had dropped to just over $2.00 a gallon, slowly rose through 2011 to around $3.80 a gallon, started dropping in 2014 through 2016 down to just over $2.00 a gallon again. In 2016 it started rising again trough 2019 to about $3.25 a gallon where it hovered all of 2019 at right around $3.00. 2020 it dropped to around $2.50, where it remained most of the year, and is now heading back up, not quite reaching pre-pandemic levels yet. Futures are predicting it to stay around $2.70 for the next year or two. The pre-pandemic level was right around $3.00. (source was Department Of Energy).

Hopefully that stability in prices will happen as they are predicting.

I can see all that on charts & graphs. Its the sudden spikes that kill ya.

Take for example hay sales. We negotiate a selling price to a buyer for lets say 300 tons of hay in July for the following year. So once that price is locked, that’s IT. If fuel prices go up 35% on that 300 tons to be produced after the price is negotiated, I get stuck with all the extra fuel prices. This is like a bid for a contract on construction. Every spike in lumber, concrete, steel, dry wall gets absorbed by GC. You can try to negotiate escalation or sur charges in contracts, but you have to remember, there’s always a guy who won’t ask for them. He may get the bid instead of you.
So bottom line is, I cant do bids on work and build in 30% more cost on fuel, lumber, steel, etc or I would never get a contract.
My input costs would be too high.

Slow price increases are not nearly as bad.

 

[mred2]

Dude, I understand your issue. Not sure that I have any advise to help. A good friend in Arkansas quit farming 2 or 3 years ago due to just not make any money for his work. Now has land not being farmed at all. Got tired of working for break even. Still has some cows and hay fields. But no money in cows and hay is only for his use.
There are people down here in Alabama selling grass for $20 a roll, weeds, no fertilizer. I would not use it for mulch in a ditch. But they try to sell it. I have been lucky in having my hay guy only a few miles away. With really good horse hay and sells to me at good price. Cash only. He only does it because he has chicken houses and free fertilizer. Break downs and fuel is his biggest problems. If he didn't have his son to help on the hay, I am not sure how long he would stay in it. My age and ready to slow down.
Most people in this part of the country don't realize what good hay costs in other parts of the country. It is funny to me that people buy weeds that are in a bale, thinking that they can feed their animals cheap. And others go to TSC and pay 3 times that for one or two bales at a time. I have to order my hay each spring to be sure that I have it in the fall. I don't even ask the price, I trust my guy. Most small farms buy it when then need it and they buy a lot of junk. A person I know that feeds only 1 horse, does not stock any hay. And buys a few bales at a time during the year. When they run out they have asked me. I always plan what I need and add 20 rolls. I don't run out.

I sorry to say, but I think prices will go up higher.

 

[bcp]

From:

GOP SAYS SUPERMAJORITY DECLARES WAR ON WORKING CLASS

March 4, 2021 3:20 a.m. Oregon House Republicans have criticized legislation that would outlaw the use of diesel fuel in Oregon. A release from the Oregon House Republican Caucus said that HB3305, authored by Portland Lawmaker Karin Power, would prohibit gas stations from offering diesel fuel

kqennewsradio.com

"A release from the Oregon House Republican Caucus said that HB3305, authored by Portland Lawmaker Karin Power, would prohibit gas stations from offering diesel fuel in some counties starting in 2024, and statewide by 2028"

HB3305 2021 Regular Session - Oregon Legislative Information System

olis.oregonlegislature.gov

 

[MossRoad]

I can see all that on charts & graphs. Its the sudden spikes that kill ya.

Take for example hay sales. We negotiate a selling price to a buyer for lets say 300 tons of hay in July for the following year. So once that price is locked, that’s IT. If fuel prices go up 35% on that 300 tons to be produced after the price is negotiated, I get stuck with all the extra fuel prices. This is like a bid for a contract on construction. Every spike in lumber, concrete, steel, dry wall gets absorbed by GC. You can try to negotiate escalation or sur charges in contracts, but you have to remember, there’s always a guy who won’t ask for them. He may get the bid instead of you.
So bottom line is, I cant do bids on work and build in 30% more cost on fuel, lumber, steel, etc or I would never get a contract.
My input costs would be too high.

Slow price increases are not nearly as bad.

You negotiate a year ahead of time, not knowing what the fuel prices are gonna be, with no clause for adjustment if fuel goes up or down? Ouch. I'd be chewing tums all day. Couldn't take it.

 

[Muhammad]

Reminder that if you're posting links or quoting politicians, any political debate will be removed. So you can discuss fuel prices but leave the politics out of it.

 

[5030]

You negotiate a year ahead of time, not knowing what the fuel prices are gonna be, with no clause for adjustment if fuel goes up or down? Ouch. I'd be chewing tums all day. Couldn't take it.

In my case I store it in my 1000 gallon bulk tank. Just filled it last month in anticipation of what I felt was gonna be a marked increase in fuel prices and I wasn't wrong either. Do the same with propane. I own 4, 500 gallon bottles and they are all full as well.

Paid $1.35 for gas and $1.98 for off road diesel. Figure I'd better get it while I can because the price is climbing everyday. I realize not everyone can afford to do that or have the storage capability, but I do and I can afford it.

 

[5030]

From:

GOP SAYS SUPERMAJORITY DECLARES WAR ON WORKING CLASS

March 4, 2021 3:20 a.m. Oregon House Republicans have criticized legislation that would outlaw the use of diesel fuel in Oregon. A release from the Oregon House Republican Caucus said that HB3305, authored by Portland Lawmaker Karin Power, would prohibit gas stations from offering diesel fuel

kqennewsradio.com

"A release from the Oregon House Republican Caucus said that HB3305, authored by Portland Lawmaker Karin Power, would prohibit gas stations from offering diesel fuel in some counties starting in 2024, and statewide by 2028"

HB3305 2021 Regular Session - Oregon Legislative Information System

olis.oregonlegislature.gov

Glad I don't live out there. Don't want to either.

 

[Hay Dude]

You negotiate a year ahead of time, not knowing what the fuel prices are gonna be, with no clause for adjustment if fuel goes up or down? Ouch. I'd be chewing tums all day. Couldn't take it.

Yep. That’s the “dream“ I live every day. In fairness, sometimes input costs decrease, but its not a spiked decrease.
They dont want to hear your fuel “adjustment” crap, either. They have just as much diesel fuel to burn processing hay, so they get hurt, too.
You might be able to squeeze a little more out of feed-hay buyers since it’s more of a time/point of sale.
I cut a lot of conservation easement property with the 15’ mowers we have. I WAS able to see what was happening and increase annual contract prices a few percent. So on the mowing end, I’m a little better off.
To you guys who like to post charts & graphs about inflation......check out the charts & graphs on hay prices. Its a real eye opener.

 

[Hay Dude]

In my case I store it in my 1000 gallon bulk tank. Just filled it last month in anticipation of what I felt was gonna be a marked increase in fuel prices and I wasn't wrong either. Do the same with propane. I own 4, 500 gallon bottles and they are all full as well.

Paid $1.35 for gas and $1.98 for off road diesel. Figure I'd better get it while I can because the price is climbing everyday. I realize not everyone can afford to do that or have the storage capability, but I do and I can afford it.

I do this, too. However, I think the non-farm folks need to realize, that in itself is financially stressful. Buying a lot of fuel ahead of time causes one to have to spend a large sum of money they wouldn’t otherwise have to for the purpose of avoiding upcoming fuel spikes.

I mean seriously folks, it takes diesel fuel to grow your food and ship it to your Acme where you buy it. Very sad state of affairs when a decent percentage of Americans think their food comes from the supermarket.

 

[mred2]

There was a post I read a few weeks ago. I am not sure where, may have been on here. Some thing like, "Shame on you people that kill animals for meat. Why don't you just go to the store and buy it where they make it. That way no animals get hurt."
Not sure about the words, but you get the idea. There are people (adults) in this world that have no idea where things come from and how they are "made".

 

[MossRoad]

I do this, too. However, I think the non-farm folks need to realize, that in itself is financially stressful. Buying a lot of fuel ahead of time causes one to have to spend a large sum of money they wouldn’t otherwise have to for the purpose of avoiding upcoming fuel spikes.

I mean seriously folks, it takes diesel fuel to grow your food and ship it to your Acme where you buy it. Very sad state of affairs when a decent percentage of Americans think their food comes from the supermarket.

Even if the fuel prices stay the same, you're going to have to spend that money eventually. You just have to make the same purchase now instead of later. And if fuel prices fall between now and then, you've locked in a loss. If you don't have the future funds now, and purchasing a commodity that regularly fluctuates wildly in price, I can see how that would be stressful. I'm not cut out for that kind of stress.

Planning ahead is universal. People like myself have the same hopes, dreams, concerns and worries as farmers(I'm technically a farmer, as I have a USDA farm number. I farm trees. The crop will be harvested after I'm dead). Farmers and other small business owners deal with numbers on a larger scale, however, all the principals are the same. You plan and budget and save and hope that every year as you age you get a bit further ahead with a growing bank of savings so that you can better buffer unknown costs in the future. If you're doing something for 10, 20, 30 years and are never getting ahead in that line of work, well, it's time for a reevaluation. Even if you are getting ahead, but the stress of it is affecting your physical and mental health, it's time for a reevaluation. That's the main reason I work for other people. The stresses of running a business would not be good for my health. I learned this at an early age watching my best friend's father go bankrupt and lose his business, watching another friends father in that same line of work almost do the same, and watching my parents struggle with losing jobs and raising 5 children. Three grown adult men and their spouses stressed to the limits. No thanks. Not for me.

Good luck to you. I hope the fuel prices stabilize for you. I'd guess weather is another stress factor for you. I know I cringe when we have a drought, as my pines and roadsides dry out and I worry about someone driving down the highway with a cigarette or lightning. But I'm not counting on my trees for my future, as it's a side line for enjoyment.

 

[5030]

I never stress over bulk fuel purchases, I watch the market, both fuel and political before I order in bulk. I keep my fuel funds separate anyway so 4 0r 5 grand don't hurt and I'll use it anyway. Fill it up, dump in a bottle of biocide and call it good.

What I do find somewhat stressful is buying tractor tires. To reshoe my Kubota's it's around 6 grand for radials x 2.