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Green Building Bible, Fourth Edition
Green Building Bible, fourth edition (both books)
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Products: Oil prices have halved.

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  1.  
    • CommentAuthorTriassic
    • CommentTimeFeb 12th 2015
     
    So if oil prices have halved, why haven't oil based building products like insulation not come down in price?
    •  
      CommentAuthorSteamyTea
    • CommentTimeFeb 12th 2015
     
    Takes a while for the new prices to filter through. It may also be the small amount of oil base in the product. A lot of PU is now uses plant based polyols.
    •  
      CommentAuthorfostertom
    • CommentTimeFeb 12th 2015
     
    That's only the spot price - most of the market/buyers have discounted far ahead, hoping to get stable price, not affected by blips like this (it is just a blip isn't it?)
    •  
      CommentAuthorSteamyTea
    • CommentTimeFeb 12th 2015
     
    If they bought 12 months ago for delivery today, they would be paying a higher price.

    Yes it is a blip caused by the general slowdown in world trade.

    This weeks comic has a bit about Rare Earth Metals. We may have to go back to having buttons on phones rather than touch screens. How dreadful will that be. Something you can actually type on.
    • CommentAuthorGarethC
    • CommentTimeFeb 12th 2015
     
    Might be able to take $110 as an upper limit for several years though. The vast amount of investment in unconventional sources that was profitable at that price suggests that anything higher would result in a lot of unconventional oil coming on the market and driving prices down again. Also, there's a lot of sunk investment that will keep pumping as long as its variable costs are covered, so I doubt supply will reduce all that rapidly in response to recent lower prices. My money would be on medium term prices in the $60-90 range.
  6.  
    Low oil prices was a deal negotiated with the Saudis before the US goes into Syria.
    •  
      CommentAuthorSteamyTea
    • CommentTimeFeb 12th 2015 edited
     
    That is my reckoning too. The OPEC countries have already stated that they will pump at $20/Barrel to keep market share.
    That is under a penny per kWh.

    The old Blue Peter boy is doing a thing about oil at the moment:
    http://www.bbc.co.uk/iplayer/episode/p02gzf9k/planet-oil-episode-1
    • CommentAuthorGarethC
    • CommentTimeFeb 12th 2015
     
    I don't disagree that current $50 oil is effectively predation by Saudi Arabia (perhaps with additional geopolitical motives), but I don't think that affects my proposal that $110 is an upper limit (allowing for global inflation) for prices. Unconventional oil sources had only just begun to be exploited at that price. Much more would come on stream if prices returned to those levels for a sustained period. Supply would eventually rise a lot.
    •  
      CommentAuthorSteamyTea
    • CommentTimeFeb 12th 2015
     
    My Father was an oil man. My Mother was retelling the story from the 1960's when oil dropped to $10/barrel and the world was going to end.
    In some ways pumping out the cheap stuff quickly is a good thing and it makes alternatives attractive. Sasol did alright out of high prices and a world embargo. We may be heading back that way.
    • CommentAuthorTriassic
    • CommentTimeFeb 13th 2015
     
    So how long before we start to see a reduction in prices, petrol came down very quickly?
  11.  
    My heating oil price has almost halved from the maximum. Someone said it's cheaper than mains gas per kW/h.
    • CommentAuthorsnyggapa
    • CommentTimeFeb 13th 2015
     
    I guess a lot of the question is how much of a percentage of the final product value is the oil component. For heating oil that is a fairly tight and direct relationship - the costs I would guess are

    Oil
    Refining costs
    transport costs
    profit

    so if oil has halved and heating oil has nearly halved you can see that the majority of the cost was the raw material.

    For other items like insulation, I am guessing that the oil component may not be a big piece of the chain - maybe refining/production costs are high , as are transport (big n bulky)

    It may also be true that the oil being used today was bought at $110 months or years ago - there's a lot of variables here.

    -Steve
    • CommentAuthorringi
    • CommentTimeFeb 13th 2015 edited
     
    Posted By: PeterStarckMy heating oil price has almost halved from the maximum. Someone said it's cheaper than mains gas per kW/h.


    But for how long...

    Also gas boilers are cheaper then oil boilers and easier to control.

    But there are lots of large boilers in hospitals etc that can run on both, so they switch over depending on price at the given time. They are also paid not to use gas at times of high demand.

    So if the oil price remains low for long, the gas price will come down.

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