The past six months have seen nothing less than a tectonic shift in the price of oil and fuels. Angela and I have marveled as the price of gasoline in Lancaster has dropped from $3.75 a gallon to $2.80. That’s a 29% drop, per gallon. In our travels we have seen regular as low as $2.65. And it keeps dropping, seemingly every day.
Above: This GasBuddy chart shows the dramatic drop in gas prices
As some one who’s interested in the economy and stock market, I have been reading voraciously about the causes of this precipitous decline. As a truck camper, I want to know how far this decline will go, and for how long. Truth told, nobody really knows, but the expert consensus seems to be pretty far, and for quite a long time, if not forever.
But how can this be? If you’re like me, it’s hard to trust a change you don’t understand.
The macro reasons are two fold; a dramatic increase in domestic oil production, and a softening of the economies in Europe and China. I know, boring economic stuff, but hang on. This is very important to almost anyone who goes truck camping.
The United States has dramatically increased its oil and gas supply through shale oil production. Angela and I explored Colorado in October and were dumfounded at the quantity of oil platforms that have been erected. The number of oil related trucks and support equipment on Colorado’s roads is equally unbelievable, and something you have to see to fully appreciate.
We saw the same prevalence of oil and gas platforms and related traffic in Farmington, New Mexico last year. When we share these experiences with friends and family back east, they clearly don’t grasp the magnitude of what’s happening in parts of the United States. If we hadn’t seen it with our own eyes, I’m not sure we would be able to believe it either. But make no mistake folks, the United States has become a major producer of oil and gas. It’s here, and now.
While the United States shale oil fields have boomed, Europe and China, both significant consumers of oil, have experienced a softening in their economies. In turn, this softening has diminished their demand for oil. Less economic activity means less cars and trucks driving around commuting to jobs, providing services, and restocking store shelves.
Believe it or not, lower oil and fuel prices is not all good news. Yes, it puts more money in the pockets of consumers, acting as an across-the-board tax cut. But, lower oil prices also cripples business and economies that rely on oil. And I’m not just talking about Saudi Arabia, Iraq, Iran, Kuwait, and Venezuela.
Alaska’s economy could be in trouble. Canada will feel a serious pinch with their oil sands. And some Lower 48 producers – the companies drilling in Colorado, New Mexico, and Texas for example – will also be challenged. For these states and businesses, it’s about to get very interesting.
In the face of these falling oil prices, oil producing countries and businesses have, for the most part, maintained their oil production levels, further depressing the price of oil. Many suspect that this is a high-stakes international and corporate game of chicken designed to force higher cost producers – like the shale oil producers in the United States – out of business. Like I said, it’s about to get very interesting.
But enough about the economy. This isn’t Oil & Gas Magazine. Let’s talk about what’s important; truck camping!
For many of us, fuel is the number one cost of truck camping. With an already 30% decrease in the price of fuel in 2014, that’s one heck of a discount.
Does that discount put Alaska on your 2015 schedule? Does that discount put a new truck on the purchase list? Does that discount tip the scale on you buying your next truck camper? Or does that discount it not make a hill of beans difference to your truck camping plans?
This week’s Question of the week is, “Has the recent dramatic drop in fuel prices influenced your truck camping plans for 2015?”