Oil $$$
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GoneDiving
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Here in Australia, we are now paying AUD 1.60/litre or near USD 3 per gal. That's about a 10% increase on recent prices.
Most of our price is made up of state and federal taxes so a trip to PNG would probably pay for itself with a tax free 8500l fill pre departure.
Most of our price is made up of state and federal taxes so a trip to PNG would probably pay for itself with a tax free 8500l fill pre departure.
I'm really trying not to be political, but it's clear that government can control the supply and demand and thus the prices. Our supply is less than the demand so prices are high.... and will most likely continue to go up for the next few years. And they can tax it more when you buy, and tax the suppliers more, and they're talking about another tax when you use it!
The demand for oil will increase in the US over the next 10 to 20 years, regardless of what strides are made with alternative forms of energy.
For boaters, I'd argue that it will still be affordable, if one's income can keep up with inflation and they are willing to spend a bit more.
I remember well when I said, if gas hits 50c a gallon, I'd quit driving... well, that didn't happen (quitting to drive).
While we all would love to see an electric powered boat that would do the same as our diesel powered boats to, but that's not in the near future, as are cars.
If money is a real issue for fuel, just quit eating for a bit to pay for your diesel.
Just topped off today for $977 at $3.15 a gallon. Seems like a major lifes expenditure, but no regrets. That's the price, and I'll bet we'll see that price increase dramatically in the next year or so.
I'm also "into" oil with some mineral rights so I watch it quite a bit. I actually have scouts that go out to the hills to see whose drilling what and how fast... fun stuff.
The demand for oil will increase in the US over the next 10 to 20 years, regardless of what strides are made with alternative forms of energy.
For boaters, I'd argue that it will still be affordable, if one's income can keep up with inflation and they are willing to spend a bit more.
I remember well when I said, if gas hits 50c a gallon, I'd quit driving... well, that didn't happen (quitting to drive).
While we all would love to see an electric powered boat that would do the same as our diesel powered boats to, but that's not in the near future, as are cars.
If money is a real issue for fuel, just quit eating for a bit to pay for your diesel.
Just topped off today for $977 at $3.15 a gallon. Seems like a major lifes expenditure, but no regrets. That's the price, and I'll bet we'll see that price increase dramatically in the next year or so.
I'm also "into" oil with some mineral rights so I watch it quite a bit. I actually have scouts that go out to the hills to see whose drilling what and how fast... fun stuff.
I'm just responding to the above comment:
It is worth noting that the US per capita oil consumption has been declining
overall since the late seventies. US population growth has seen a similar curve,
with net growth near zero in the last and current year.
More accurately, the demand for oil will continue to flatten out in the coming years.
This also may have the effect of flattening the price we pay to fuel our powerboats.
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foggysail
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How can politics be avoided when it comes to discussing oil prices? Politics will certainly be affected because price impacts everybody's life.
catalinajack
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So, how could or does the government control the supply and demand, perhaps supply in some small, insignificant way but certainly not demand. 8t is not at all clear to me.
Sailor of Fortune
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So why was Oil half the price a year ago? Was demand half of what it is now?
I don't know what it was like for you but here for several months last year
there was little highway traffic and few passenger aircraft flying.
Large demand change = large price change. No government pricing required.
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mike66
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If a commodity is taxed, if permits to gather that commodity are limited, if funds to finance gathering that commodity are limited, there is little incentive to invest in producing more. Easier for a company to produce less and profit from the increased prices.
Less competition = higher prices. The available supply will go to the highest bidder.
Less competition = higher prices. The available supply will go to the highest bidder.
rslifkin
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Yup, prices were dropping a bit already in 2020 due to over-production with various producers trying to price each other out of the market. And then COVID tanked demand, so prices fell off a cliff.
Prices have since come back up. With current fuel prices, I'd say we're really not all that far off the normal we'd seen for a few years before 2020. Last year was the first time I can ever remember paying under $3 for a gallon of 93 octane for a car.
Prices have since come back up. With current fuel prices, I'd say we're really not all that far off the normal we'd seen for a few years before 2020. Last year was the first time I can ever remember paying under $3 for a gallon of 93 octane for a car.
FWT
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Actually, this is SUPPOSED to be a discussion on how rising prices will affect boating. Not why prices are rising. See the first post.
GoneDiving
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AUD 1.60/l * 3.785 l/US gal * 0.75 USD/AUD
= USD 4.54/gal.
Looks like I ran out of fingers. ?
sbman
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Increased prices for petroleum products will increase the cost of not only fuel for running a boat, but also the components that go into producing, repairing and modifying a boat. Many chemicals and products related to construction and repair of boats comes from petroleum and their price is directly affected by the price of oil.
One thing I've never seen any thought, concern or solution for is what will boats be made out of if the entire world no longer uses petroleum products?
FWT
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Indeed
Inflation has pushed prices on everything including oil-based materials, but not limited to that. Demand for new boats has been rising, with costs up. Prices have to climb on new boats while that is happening. Which should keep used boat prices up SO LONG AS there is strong demand.
If boat prices hit some choke point causing new boat demand to level off or fall, inflation will still keep new boat prices high. But used boat prices, maybe not so much.
All assuming the inflation trajectory continues. I would not bet on any economic forecast. Too many variables. They are usually wrong. Buy the boat you want if you find it to be worth it to you. Or not, if its not. My $0.02.
catalinajack
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You did not answer my question. But to answer your question, yes, demand was substantially less one year ago. By the way, if you knew anything about macroeconomics, the wo are not necessarily inversely proportional. To simplify it for you, prices do not double just because demand doubles. And, I will wait for your answer.
catalinajack
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If, if, if, all that is speculation and none of it has happened so it is not an explanation for today's higher prices.
I will make a non-political on-topic post based on the question by the OP.
Diesel prices in the US.
Jan 2002-$1.15
July 2008-$4.70
February 2009-$2.20
February 2013-$4.11
February 2016-$2.00
May 2019-$3.16
October 2020-$2.39
September 2021-$3.38
You'll never find evidence in those years of it impacting boating. In 2008 we hit a recession and that caused people not to buy boats, but they didn't buy in 2009 either even though fuel prices dropped and they started again in 2010 and on and didn't stop and start based on fuel prices. We act like $3 is shocking but it's not even a new high.
I was good friends with a marina owner who went through the 1974 inflation and boating industry disaster. I was only 4 so didn't know what was going on, other than waiting in a gas line once with my parents. There was panic that fuel prices were hitting $1.00. His marina was gas, not diesel. In his opinion fuel prices had zero impact on boating. In fact, they increased his profits as he was marking up wholesale by a percentage. His volume was constant. Now new boat sales nearly stopped. New RV sales did too. Why then? Customers couldn't get financing, but worse even, dealers couldn't get financing. The crucial part though is that he sold fuel only to boats and his gallons sold rose in spite of prices.
If you thought fuel prices dictated boating activity, then you would have seen a huge drop from 2009-2013 when boating actually increased and you would have seen the same from 2016-2019 and it didn't happen. Now, there is likely some point it would impact the industry and that may be $6 or $8 or $10 but history has proven $4 does not. There are too many other factors impacting boating. Boat sales are impacted by the general economy and by the ability to finance. Boating by existing boaters is influenced by so many factors from economy to not being able to boat during the pandemic to boating being their only pandemic activity.
We're going to see a drop in boat sales sometime. We always panic over drops but they always follow huge sales years that were really the anomaly. Why would we think pandemic sales would continue forever?
Sometimes we try to pin changes on one factor and they just generally are caused by many complicating factors, not one. I do believe the sudden boaters who were working odd schedules and from home and hit the waters in 2020 will slow down. Suddenly, they'll have to go to the office, travel on business, go to kids activities and do all those things they did before.
I don't believe fuel prices in the next couple of years will impact boating activity. This is based on history. I do believe many other things will. Right now, my greatest fear is when hundreds of thousands of people again own homes that the market says are not worth what they owe. I hope that doesn't happen like it did 13 years ago. However, the increase in the selling prices of homes brings back a lot of memories of that time as does the low cost financing. If that happens, then you'll see boating impacted far more than by fuel prices.
Diesel prices in the US.
Jan 2002-$1.15
July 2008-$4.70
February 2009-$2.20
February 2013-$4.11
February 2016-$2.00
May 2019-$3.16
October 2020-$2.39
September 2021-$3.38
You'll never find evidence in those years of it impacting boating. In 2008 we hit a recession and that caused people not to buy boats, but they didn't buy in 2009 either even though fuel prices dropped and they started again in 2010 and on and didn't stop and start based on fuel prices. We act like $3 is shocking but it's not even a new high.
I was good friends with a marina owner who went through the 1974 inflation and boating industry disaster. I was only 4 so didn't know what was going on, other than waiting in a gas line once with my parents. There was panic that fuel prices were hitting $1.00. His marina was gas, not diesel. In his opinion fuel prices had zero impact on boating. In fact, they increased his profits as he was marking up wholesale by a percentage. His volume was constant. Now new boat sales nearly stopped. New RV sales did too. Why then? Customers couldn't get financing, but worse even, dealers couldn't get financing. The crucial part though is that he sold fuel only to boats and his gallons sold rose in spite of prices.
If you thought fuel prices dictated boating activity, then you would have seen a huge drop from 2009-2013 when boating actually increased and you would have seen the same from 2016-2019 and it didn't happen. Now, there is likely some point it would impact the industry and that may be $6 or $8 or $10 but history has proven $4 does not. There are too many other factors impacting boating. Boat sales are impacted by the general economy and by the ability to finance. Boating by existing boaters is influenced by so many factors from economy to not being able to boat during the pandemic to boating being their only pandemic activity.
We're going to see a drop in boat sales sometime. We always panic over drops but they always follow huge sales years that were really the anomaly. Why would we think pandemic sales would continue forever?
Sometimes we try to pin changes on one factor and they just generally are caused by many complicating factors, not one. I do believe the sudden boaters who were working odd schedules and from home and hit the waters in 2020 will slow down. Suddenly, they'll have to go to the office, travel on business, go to kids activities and do all those things they did before.
I don't believe fuel prices in the next couple of years will impact boating activity. This is based on history. I do believe many other things will. Right now, my greatest fear is when hundreds of thousands of people again own homes that the market says are not worth what they owe. I hope that doesn't happen like it did 13 years ago. However, the increase in the selling prices of homes brings back a lot of memories of that time as does the low cost financing. If that happens, then you'll see boating impacted far more than by fuel prices.
AquaDestiny
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I don't know about all of that. What I do know is....when I exit the St Lucie Inlet and head east till the water turns blue, and the sun shines all around me...and I smell the salt air on a fresh breeze...I don't notice the smell of exhaust whether I'm burning diesel or gas and I can't hear any politics or conspiracies. It is then that I know that all is right, and life is good.
FWT
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B&B: good post.
Since we are strolling down memory lane let me take a crack at that too.
I was sailing on the Chesapeake in the 1980's. Used boat prices (all I could afford in my 20's, and barely afford that) were significantly lower than new, but rising slowly. I traded up a few times, selling the old for what I paid a few years before. Good marinas were full, but you could get on a list and get in with reasonable ease. Bad marinas had slips, and you could "make do" there until you landed where you wanted to be.
I am trying to remember dates but I'd guess mid to late 90's or into early 2000's boating on the Chesapeake went dark. I was out of boating at that point. The arrival of kids together with a career that got more intense that evaporated notions of discretionary time. When I was boating the Bay would be chock full of boats when you crossed the Chesapeake Bay Bridge, but then things turned and it was empty. Both sail and power.
I remember being in a Board meeting when one Director told the story of a relative who had a big motor yacht / trawler in NJ, and his big annual event was to take it south and circumnavigate the Delmarva. He told the story of the fuel cost by way of explaining why boating saw a downturn. We all gasped at the cost.
Then of course there was a boom to follow. Condos and every other similar thing as a key demographic bulge hit the age when they were ready to spend on such things.
Golf was big 25 years or so ago and golf courses were being built everywhere and sold for fancy prices. Then it died.
In my personal observation part of it all IS in fact fuel price. Part is demographics. Part is the simple rise and fall of the popularity of different pastimes. Its not one thing. Its many things. One of which is fuel, but only one. When the cycle turns, and it will, folks will like to point to "that one thing" that "caused" the turn. That's convenient but often wrong.
My two cents.
Since we are strolling down memory lane let me take a crack at that too.
I was sailing on the Chesapeake in the 1980's. Used boat prices (all I could afford in my 20's, and barely afford that) were significantly lower than new, but rising slowly. I traded up a few times, selling the old for what I paid a few years before. Good marinas were full, but you could get on a list and get in with reasonable ease. Bad marinas had slips, and you could "make do" there until you landed where you wanted to be.
I am trying to remember dates but I'd guess mid to late 90's or into early 2000's boating on the Chesapeake went dark. I was out of boating at that point. The arrival of kids together with a career that got more intense that evaporated notions of discretionary time. When I was boating the Bay would be chock full of boats when you crossed the Chesapeake Bay Bridge, but then things turned and it was empty. Both sail and power.
I remember being in a Board meeting when one Director told the story of a relative who had a big motor yacht / trawler in NJ, and his big annual event was to take it south and circumnavigate the Delmarva. He told the story of the fuel cost by way of explaining why boating saw a downturn. We all gasped at the cost.
Then of course there was a boom to follow. Condos and every other similar thing as a key demographic bulge hit the age when they were ready to spend on such things.
Golf was big 25 years or so ago and golf courses were being built everywhere and sold for fancy prices. Then it died.
In my personal observation part of it all IS in fact fuel price. Part is demographics. Part is the simple rise and fall of the popularity of different pastimes. Its not one thing. Its many things. One of which is fuel, but only one. When the cycle turns, and it will, folks will like to point to "that one thing" that "caused" the turn. That's convenient but often wrong.
My two cents.
FWT
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I think active boaters do what boaters do and that is they boat. A lot of things influence getting in and out of boating. I hear your board room story and I hear the gasps about the cost of the fuel for the trip. It makes me laugh though imagining if they only knew what a small part of the yachts total cost that was. I've wondered many times over the years about those who own and never use their boats and doesn't the slip cost get to them and it does to some, but others just want their boat in hopes of using it. The biggest influence on the amount of boating most do is their available time. Most boaters talk fuel and whine about it when it goes up in price, but few stop boating because of it. It would have to be that person who could afford boating at $2 per gallon, but not at $3 and just not many boaters fit that. If they need to cut back they'll make a shorter trip. Most though will just complain and keep going.
Part of boating is the spending of money you don't have to. We do it for the love of the activity. We do it because we're not totally sane I think sometimes. Explain to a non boater why you'd spend $100k or 500k on a boat that then costs you $500 per month to park and uses 100 gallons of gas to go 100 miles when you could hop in a car, get there in 2 hours instead of 14, and use 3 gallons of gas. I've never been able to explain the beauty of boating to a non boater. I compare it to a sports fan who pays outrageous amounts to go see a game live they could stay home and see on television. It's the experience of being there.
Slowmo
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The US is one of the largest producers of oil in the world so US production (and consumption) does affects global oil prices. Oil prices dropped globally due starting around 2014 as US production increased rapidly. Fracking ended a long (40yr) decline in US production and from 2011-2015 oil production returned to levels not seen since 1970. From 2016-2020 US oil production increased a further to about 25% above any previous production level. The US moved from the #3 global producer to the #1 producer with Russia as #2 and Saudi as #3. Oil production globally dropped due to Covid due to decreased demand.
While we remain a major producer, the future shape of our production curve is unknown. Actions by the Biden administration appear to focus on asking for increased overseas production (Saudi, Russia) while simultaneously moving contrary to increased North American production: halting new leases for oil production and blocking the Keystone pipeline.
You can argue that this shouldn't have such an immediate effect but there is an 'expectation' effect. If the market anticipates reductions in US oil production then it will drive oil futures higher, which is exactly what is happening.
Oh, as a side comment, anyone who thinks the big oil companies control oil prices are ill informed. In my experience they're not even particularly good at predicting the price. The majors were taken off guard by the big decline in prices that fracking brought. Some of the majors really struggled as oil plummeted. But good times are back with the new administration.
FWT
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B&B:
A point in favor of your point of view that fuel cost doesn't drive boating popularity:
When the Bay went dark decades ago, it wasn't just powerboats. Sail too. And no conversion that I saw or heard about from power to sail in reaction.
For what its worth as I muse the issue, the two big drivers (more than fuel) are the fad / fashion as to what pastimes are popular, and demographics.
When the beach condo boom fired up just after 2000 my bank did a very large volume of condo construction. We were mystified as to the source of demand, but it was amazingly strong. Some friendly realtors helped us figure it out. When stocks rolled over and died in 2000 you had a lot of high income folks cashing out stock options at a demographic point in time when they were ready to spend it. The classic tale told always went something like, "the kids are grown and the last college tuition bill is paid, and now sweetheart its time for us to enjoy ourselves".
Demographic bulges are a well known thing. Their occurrence is predictable, but not in what a bulge chooses to do. Harley sales are heavy in middle age professional men, and when there is a bulge they do well but not when there is a shortfall in those numbers.
A point in favor of your point of view that fuel cost doesn't drive boating popularity:
When the Bay went dark decades ago, it wasn't just powerboats. Sail too. And no conversion that I saw or heard about from power to sail in reaction.
For what its worth as I muse the issue, the two big drivers (more than fuel) are the fad / fashion as to what pastimes are popular, and demographics.
When the beach condo boom fired up just after 2000 my bank did a very large volume of condo construction. We were mystified as to the source of demand, but it was amazingly strong. Some friendly realtors helped us figure it out. When stocks rolled over and died in 2000 you had a lot of high income folks cashing out stock options at a demographic point in time when they were ready to spend it. The classic tale told always went something like, "the kids are grown and the last college tuition bill is paid, and now sweetheart its time for us to enjoy ourselves".
Demographic bulges are a well known thing. Their occurrence is predictable, but not in what a bulge chooses to do. Harley sales are heavy in middle age professional men, and when there is a bulge they do well but not when there is a shortfall in those numbers.
History repeats itself... but people don't learn.
And fuel prices really don't dictate if folks boat or not. There's a huge number of folks that get out because they get tired of the payments.
rslifkin
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Anecdotally, I've always seen fuel prices having more impact on how much people use their boats (and in our case, the balance of slow vs fast travel), but not so much impact on how many people have boats.
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