The emissions regs of '07 increased the price of trucks 30-50%. Last new truck I bought in '04 was $106,000. Same truck and spec today is $159,000. Fuel is double now.Driver wages are at a premium. DOT physical requirements in March '14 tightened up. I'm 44 in reasonably good shape, don't smoke ,eat well and can barely pass the BP requirement. Mills are running full out. It doesn't make sense to idle unless no raw product is available.So the theory of mills holding back production is bunk. The hoarder theory on supplies is a small part of the shortage equation. The bigger part is weather,logistics and kerf. We just came off the worst winter in a long time. Weather that literally stopped raw material production. We are also coming off the wettest spring/summer I have seen in a long time.Weather that has slowed raw material production. Kerf. Most are not going to get this but a massive amount of wood cants in 4x6 to 7x9 sizes has been diverted to the oil and RR industry , the oil industry the last 3-5 years , the RR industry the last 15. Cants that would have normally been sawn down to 1/2"-1" material. Kerf is where sawdust/raw material comes from. Less saw kerf = less sawdust. A 7x9 RR tie cant out of a 15" log takes about 30-50%% of the sawdust out of the equation vs sawing it down into lumber and pallet material. Massive amounts of log loads of firewood are also being diverted from log to pellets to the manufacture of these cants at greatly inflated prices in the last 6 months. Prices the pellet industry isn't willing too pay. Get used to higher prices for pellets. This is going to take 2-3 years of ideal weather and market conditions to maybe work itself out. All bets are off if oil drops considerably more than it has recently.
Very informative, Thanks for the explanations. I will clip this into the shortage thread as much of this relates to that topic!
I don't *think* we'll see much more dropping of oil (If I KNEW, I wouldn't be posting here).....there has, until recently, been a lot of investment in oil, and with the dropping prices, that investment money is bleeding out....causing disruptions in the stock market, which, as you know, pretty much immediately affects everything else. Im not even factoring in ISIS, more instability, etc...
Don't let the traders know that it's not going to drop much more.... Down another 5% in the last 2 weeks.. The Saudis are happy to see it drop. Less competition in the near term for them and their production price is a lot lower than the fracking operations. Some of the analysts are talking about more down side with support around $80.. http://www.nytimes.com/2014/10/14/b...opec-members-fight-for-market-share.html?_r=0
Still coming down. Rolled over to the January contract this weekend. Down another $0.35 (14%) in the last month and a half.. Warmer weather the next couple of days in the northeast.. Energy trade is getting interesting. I'm under a 1/4 tank and waiting to pull the trigger.. Will also be interested in a used pellet stove next year!!
Funny how the pellet trend sheet seems to have the opposite curve? If I had oil I guess I'd pounce too!!
Hopefully the decline in distillates has an impact on the cost of pellet shipping. As mentioned before, as oil continues to decline, some people will begin thing twice about the "hassle" of using pellets...
Those just burning pellets to save $ or those struggling to heat their house with pellets because they don't clean the stove will go back to oil and there will probably a lot of stoves on CL too. If oil stays low or continues to decline I would have to think at some point it would have to impact the price of pellets. If not the switch back to oil could gain a lot of momentum.
There are multiple stressors on the oil market. The switch over to NG in this area must have some impact. More folks burning biomass is another. Newer cars use less, and it is said that there is a decline in the number of cars per family. I just hope we don't loss sight of of becoming energy independent from the people who don't like us.
$2.559 / gallon is the lowest price I see in my delivery area $1.893 and it equals what I paid for pellets. If it gets lower maybe I'll give up a bit of space to another tank, but I won't give up my hobby.
Saudi's are flooding the market w/ crude to get the price down.....they're hoping it will make the American oil companies stop producing, since they aren't making the $$ they were with oil at $90+
I heard it was to effect the oil sands operations. More expensive to extra the oil from the sands, So dumping prices would divert sales back to the Saudi's.
They have a problem in that regard some of the old formerly depleted oil fields can now be back in operation and profitable in the $30 range.
If oil keeps going down, rest assured there will be new "highway" taxes dumped on to offset the savings. This will stabilize prices and divert revenue for "other" uses and keep the interest in green projects which wound not shoulder the same tax burdens.
Hey for my next trick I might put a grid tied solar system on my house and light it up with high intensity lights to feed into the power grid if I can get paid more for my electricity than the company can charge me. Stranger things have occurred elsewhere. Maybe I could find a way to offset any tax liability on the income. One never knows.
