The sliding $US and the price of Oil

Hi all

I depend on selling my trip video's on a live-aboard for a living and have done so for the past 8 yrs, but I have noticed since the last 6 months and the $US weakening that the yanks are more reluctant to buy. They are a big part of what I earn, in fact they are the butter on my bread. Also thier numbers are dropping off in a big way.

Is anyone else out there experiancing this rapid decline?

Also I am begining to worry about rising fuel prices, in 10 years will dive operators be able to afford far and remote trips to the most isolated of reefs with the big walls and big fish?

Are we working in an industry that the count down has started to the end of this beautiful filming lifestyle we lead?

Will anyone be able to afford to get there in the future and have some cash left over to buy a trip video or photos?

Would love to hear what anyone has to say on this. Are you feeling the pinch too?

Regards

Seeesharky

Hi all

I depend on selling my trip video's on a live-aboard for a living and have done so for the past 8 yrs, but I have noticed since the last 6 months and the $US weakening that the yanks are more reluctant to buy. They are a big part of what I earn, in fact they are the butter on my bread. Also thier numbers are dropping off in a big way.

Is anyone else out there experiancing this rapid decline?

Also I am begining to worry about rising fuel prices, in 10 years will dive operators be able to afford far and remote trips to the most isolated of reefs with the big walls and big fish?

Are we working in an industry that the count down has started to the end of this beautiful filming lifestyle we lead?

Will anyone be able to afford to get there in the future and have some cash left over to buy a trip video or photos?

Would love to hear what anyone has to say on this. Are you feeling the pinch too?

Regards

Seeesharky

Hi Seeesharky,

Yes folks are extremely reluctant to buy anything right now. Do not depend on Americans for your income, at least for the near to medium future. The dropping dollar, the price of gas etc are a total double whammy for Americans wishing to travel abroad. Add to that the fact that there is a real recession going on for most Americans right now. The Dow just dropped another 400 and oil went up another $10 today. Anyone who depends on American tourists is going to see a steep drop for a while. How and when it will come back....I wish I knew.

Yeah, I'll second that.

The economy in the US is facing the biggest headwinds anyone has seen in a very long time - probably going all the way back to the great depression. It won't be as bad as the '30s, but it is bad and getting worse before it gets better as I see it. This could stretch out well into 2009 before it turns around.

Optimists say growth returns in the last part of this year, but I just don't see it.

You Guys have got a way to go with Gas prices. We pay £1.15 per litre in the UK. I think there are 3.7 litres per US Gallon i.e £4.25 converted to US$ = $8.05 !! A high percentage of this is government tax. No wonder we have smaller cars with smaller engines

Roger

I actually think it works out to be a bit more than that Roger ..

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

I actually think it works out to be a bit more than that Roger ..

 

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

 

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

 

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

 

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

Here in Australia this morning, if you need to buy diesel at the Rabbit Flat Roadhouse in the Northern Territory you'll pay $3.00 a liter.....that's US $10.50 a gallon!!

I think the bigger worry is airlines cutting flights and parking planes. Qantas just announced cutting routes to the US and Japan to Cairns that amounts to around 1,500 people a day- and that spells potential disaster for dive operators already dealing with fuel costs, and a slowing world economy.

The same thing is happening elsewhere and it will become tougher to get "there from here" in the future- adding to the cost of holiday travel. Hold on to your shorts- we're in for a long ride.

In the past when a slow- down happened in the US things around the world slowed down too- that's not the case now with China and India keeping up the demand for fuel and other resources.

We may be looking back on these days in the next 5 years as "the good old days."

It's going to get worse for some time,

Diesel here is $2 per liter in Exmouth and there is less people coming here than previous years.

The greedy mining companies have also jacked up the price of everything creating a false economy over here in West Australia but it's going to all fall apart one day and this part of AUS will be buggered.

The fuel thing is going to change in the next ten years as Hydrogen from simple FREE water will be used to power more and more things and so the oil, gas and coal mob are going to far apart. It will also sort out the middle east problems as we will not need their oil.

For years the oil companies and governments have tried to buy or kill trying to keep the hydrogen topic from growing but now there is just far too many people to keep quite about it and news spreads very fast like on the internet.

So either we will fill up our tanks with water and have the hydrogen taken out of the water just before it hits the engine or we will have a Solar Cell Hydrogen Station at home that is used to fill on-board hydrogen storage tanks in the car which is used to drive either a normal engine or it's converted on board to electricity to drive a electric engine.

I agree it is the airline fuel surcharges that will stifle the long haul guys. The extras are also being put onto XS baggage etc. making it very expensive for the tourist divers like myself to carry their kit. The cost now of getting to your part of the world Wagsy, from the UK, is pretty prohibitive. I imagine the US divers will still make it to the Caribbean, but there are quite a few "hidden" costs there now.

Thank goodness, from the UK, we still have the Red Sea just 5 hours away, although even that is getting more expensive with fuel surcharges and lower baggage allowances.

I am surprised that Dive Centres aren't offering storage space for dive kit. It will soon be cheaper to buy more than one set of kit and keep it at your favourite resort and just travel with your camera and a T shirt ( maybe some swimmers too )

I also agree with the diesel comments, last night on the news it was reported that the average UK driver (12,000 miles per year) would only now save £100 (US$200) per year with a diesel engine, the extra cost has almost outweighed the extra diesel mileage.

Roger

I think its going to turn into MAD MAX 2.. where we all drive wrecked cars and fight in gangs for fuel.. Driving across the war scorched wastelands

I want to be Humungus Lord of the wastelands !!!! and wear my leather zip mask..

WE GO IN, WE KILL...NOTHING LIVES !!!

Simon Buxton And Mikey Veitch can be those two arse bandits on the motorbike...

Dive safe

Dean (£1.31 for diesel)B

I actually think it works out to be a bit more than that Roger ..

 

1 litre = 0.26 US Gallons

so thats £4.35 Which today is $8.48

 

But why oh why is Diesel a by product of gasoline more expensive ?

not that i like diesel in any way shape or form .. its just confusing.

 

We also have to remember that the US has a whole bunch of oil underneath their land that for the most part is nor allowed to be drilled for mostly due to conservation, like a Snowy Owl lives near by.

But I bet .. when prices get to a certain point someone in the USA will say screw it .. lets drill .. and then make a WAD load of money from selling oil they had all along.

 

As for tourism, I am not concerned, there are still plenty of americans with money to spend regardless of the economy, and plenty of other people around the world too .. it's just a case of getting them to where you are !

The price of Diesel increased in the US too. It is now more than regular gas when it used to be cheaper. I was told this was due to removing sulfur from it to reduce pollution. Was this done elsewhere?

What you say about re-opening oil fields may be true. I understand this is happening in LA. There is also a lot of exploration going on in the Arctic Ocean, just about the entire coast next to Alaska, when it used to be concentrated near Prudhoe Bay, a relatively small area.

BTW gas is now about $5/gal where I live in boondocks of Alaska (which is much more than in Anchorage). The road miles here are limited so I have less than 50K miles on my PU which will be 15 years old this month. However, I think it may be more typical for those in the US to drive this much in just a year!

Tom

Dean you make me laugh.

I already ride though waste lands in search of fuel.

With the cost of Excess luggage FED Exing your stuff to the dive location might not be a bad idea now.

It takes more to refine Petrol than Diesel....Diesel costs more because the OIL companies sell it like that.

I think its going to turn into MAD MAX 2.. where we all drive wrecked cars and fight in gangs for fuel.. Driving across the war scorched wastelands

 

I want to be Humungus Lord of the wastelands !!!! and wear my leather zip mask..

 

WE GO IN, WE KILL...NOTHING LIVES !!!

 

Simon Buxton And Mikey Veitch can be those two arse bandits on the motorbike...

 

Dive safe

 

Dean (£1.31 for diesel)B

Gas prices and the economy have definitely reduced the number of US tourists down here. We still have visitors but I see a drop.

On a side note all the condo developments here are being funded by Alberta based oil groups whereas in previous years it was principally US investors in these sort of projects.

I am sitting on the fence at the moment as to how this will all pan out, I think it will stabilize when the US economy sorts itself out and we have become used to the price of gas. I remember in the UK during the 70's gas hit 1 pound a gallon, it was the end of the world but we all became used to it after a while.

Martin

In my area, Washington state, USA , gas is about $4.35 per gallon, and is towards the high range for our area. Diesel is about $4.85 per gallon. Higher due to environmental mandates for lower sulphur content. The diesel cars get a little better mileage, but the fuel costs more, I think it is a net wash.

Whats really been the shocker here, is the rapid price increase. Price for gas has doubled in little more than a year.

Seeesharky, just start charging in Euros... then that will really scare off the remaining gringos

You Guys have got a way to go with Gas prices. We pay £1.15 per litre in the UK. I think there are 3.7 litres per US Gallon i.e £4.25 converted to US$ = $8.05 !! A high percentage of this is government tax.

I enjoy the eat-what-you-kill nature of the US society, but the inequities for many here are very hard to dismiss. High fuel and food prices and no medical for the family. That's a tough nut for many here, not only financially but intellectually and emotionally. I'd imagine some of them would willingly be exposed to VAT or use taxes on discretionary spending if it would bring medical and pharmacutical coverage to their families.

I am pretty liberal, though not of the bleeding heart variety ,and I don't personally want to suckle from the government teat. But man do European countries do a better job than we do in providing social advantages for the distressed, or for that matter everyone else too.

In my area, Washington state, USA , gas is about $4.35 per gallon, and is towards the high range for our area. Diesel is about $4.85 per gallon. Higher due to environmental mandates for lower sulphur content.

On the current US market big oil recieves gross profits of about 6 bucks per barrel of gasoline vs 32 bucks per barrel of diesel.

The reasons diesel is expensive at the pump is because it is immensely profitable and used by only a sliver of the US population. They can reap windfall-like returns without angering any more than a small percentage of the population. By almost any cost analysis or production calculus, the cost disparity at the consumer level should be favorable to diesel.

Energy output from diesel eclipses gasoline and it is cheaper to produce. If we are going to stick with fossil fuels until the earth can give no more, we ought to be doing it via the diesel lines.

I don't know specifically how your tax revenues are distributed but I imagine you have significant social/economic programs at your disposal as a result.

Your point is well made Rob, the only problem is when you watch those numbers rolling around on the pump readout you don't always think "that's a bit more towards my coronary bypass"

However I do agree that although the UK tax is high the health & social welfare is on the whole pretty good, and even more important, it is inclusive.

But.... as the prices rise faster than income we all have to cut back on those luxuries which includes new shiney kit and those holiday DVDs

Roger

The primary driver for the high oil price right now is the low US $$. Since oil is priced in US $$ international investors are buying it up in droves.

Since the US $ is low, Americans probably won't want to travel to countries w/ high currencies - i.e. countries w/ currency based on the Euro or Pound.

I just got back from the Philippines, and prices were OK there.

Cheers

James

This is an interesting read and argument on the current oil market...

http://money.cnn.com/2008/06/06/news/econo...sion=2008060610