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Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia
Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be "aligned" with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia's will when the WSJ reported that "the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."
What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.
A glimpse of the answer was provided earlier in the article "The Oil Weapon: A New Way To Wage War", because at the end of the day it is always about oil, and leverage.
The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia...
... which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.
To wit:
Saudi Arabia to pressure Russia, Iran with price of oil
Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.
Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.
To pressure Iran to limit its nuclear program, and to change Russia's position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.
With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.
The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won't be able to affect Saudi Arabia's decision, Abanmy maintained.
The organization's decisions are only recommendations and are not binding for the member oil producing countries, he explained.
Today's Brent closing price: $90. Russia's oil price budget for the period 2015-2017? $100. Which means much more "forced Brent liquidation" is in the cards in the coming weeks as America's suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.
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Expect "Asymmetric Responses", bitchez.
Does this have anything to do with it? http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-b...
I have a hard time believing old Horseface Ketchup Monster had a hand in anything,
that didn't immediately turn into a steaming pile of Wookie Doo.
All the Russians have to do is sink one or two tankers with their stealth subs. Or declare Saudi Arabia a nation that supports terrorists and Strike their refineries in revenge for Beslan massacre. Oil at 300 per barrel and there is nothing the USA can do because they have created the precedent.
Saudi Arabia can only play this game for so long before their finances are affected. Meanwhile the USSA fracking stock prices are taking on the chin.
Russia will suffer in the short term, but they will endure. The alternative, of western control over their economy, with a repeat of the disastrous 1990's, is deeply engrained in modern Russian memory.
Long borscht and cheap vodka.
Wait wait wait wait wait a minute hold on holdjer horses....
Does this mean everything I came to believe about Fracking and the Bakken Bits being the energy independent future of perpetual free shit for America is wrong?
...sigh...
free market capitalism is the best path to prosperity
By the way, I can read lips.
Kerry is saying to that dude; "I mean you shoulda seen the size of my left teste before they lanced the boil. Sure glad I got that done before the circle jerk tonight. I can't wait. Didju get those little dancing boys, again? I brought you some more great Richard Simmons workout tapes you like, Kingsy!"
What the fuck do these people talk about?
Listen are you sure about this?
Didn't Kerry allow Saudi Arabia access to all NSA records for phone, Internet, other communications so that they could monitor USSA citizens to "HELP" the "HOMELAND"?
cheap oil means no need for those molten salt thorium facilities
This is what they did to the Soviet Union, isn't it?
Only the government in the Soviet Union was bankrupt from top to bottom. This time the West is far deeper in debt than Russia.
End the petrodollar and the West is a goner.
No "secret deal" will overide what will happen to the price of oil when the Israelis hit Iran.
And the Russians take out Tel Aviv, as they have already promised to in the event of an Israeli Terror attack on Iran.
Putin will never strike first, he is a Christian. The Jews know this (and Satanic Royal buddies Bush/Kerry et al).
People you need to see what is going down. Putin will not strike first no matter what. The dark forces will continue to work against this as they see it as a weakness. Wrong! He is simple following his own Christ, that simple. He will fight back when he feels he must and he will spare civilian lives as any Christian would.
The Jews have shown their hand a long time ago. They hold no element of surprise.
You are delusional if you think men who hold such positions base any decision on stone-age fantasies.
“at the end of the day it is always about oil, and leverage.”
OK, cool.. but don’t forget about the gold.
.. the very wealthy do not have a lot of crude in their vaults.
The cool thing about gold is if you spill it....it doesn't stick to you.
A little late on this article, but better late than never... The intent to cripple Russia with low crude prices was obvious when SA increased production months ago when world demand was down... The unholy alliance of the arabs and their oil, along with the US and it's military being used to maintain the petrodollar standard while waging economic war on Eurasia... Oceana vs Eurasia, just as Orwell foretold in 1984...
http://www.planbeconomics.com/2014/10/are-falling-oil-prices-a-weapon-to...
Doesn't really seem to be market pricing at work, does it. Not that I am surprised....
Basically the saudis are driving down the price of oil now because winter is upon us and europe needs cheaper energy to keep warm without the gas from russia. Saudi is definitely on the side with the West against putin and want to single out russia for as long as possible, financially and ppolitically. Luckily for russia, the chinese is willing to side with them over the West.
Peak Oil is a symptom of years of Brainwashed sheeple. You have part of the answer. Just not the whole story. The Saudis understand that the U.S. can produce enough oil @75 to supply the U.S. for years. So now their make believe empty fields have more than enough to supply everybody. Most do not get just how much Haliburton and others raped U.S. taxpayers suppying the military with all that oil to run around the middle east as cops of their land. It is not free oil that supplied the 5 mile per gallon military vehicles and aircraft carrieres including all that overpriced jet fuel to fly around too. It was Saudi Oil. That party is over for the better part.
Now they will push others out of production to maintain their own interest as the only major supplier of product. Basically, the Saudis and U.S. companies, (like Haliburton), of no bid contract suppliers to the military have raped America as much as possible for years and now must do what they do to validate Saudis as being the king of supply. Part of the Deal for sure. Petrobas will most likely not happen in our lifetimes and forget piping sand, (LOL), from Canada to U.S.A. because nobody will fund it now. The "Peak Oil Party" is over. Personally, I can't believe it took this long. That said, Greed is Good, (LOL Again) for the thieves who profited from this mockery. It has to be the biggest farce that nobody will tell. Even the smartest of the dumbasses bought the charade.
"The cool thing about gold is if you spill it....it doesn't stick to you."
Nah...but it will mash the shit out of your toe
Glad to see that there's some bright people around this place.
Conventional scripts are for the masses. The architects don't believe the same shit you're trained to believe: different programming. People will remain slaves because their minds make them so, exactly as stated in the Matrix.
Us: programmed to be slaves
them: know and run the reality of the world.
It is rather ironic how the film, The Matrix, metaphorically mirrors our societal reality... Is it art immitating reality, or vice versa?
"It is rather ironic how the film, The Matrix, metaphorically mirrors our societal reality... Is it art immitating reality, or vice versa?"
Art imitates life
I don't think you've read many political biographies.
What was that one book?
'The House of Bush; The House of Saud'?
'No One Here Gets Out Alive'?
'The Report From Iron Mountain'?
AUTOBIOGRAPHIES are so much better.
'Why A Duck?' by Groucho Marx is so much more introspective (for example).
People writing shit about other people is all good and well, I suppose, but something is lost in the translation of the human aspect. 'He lived, he died, he did some stuff' is the general theme of a biography. Biographical authors tend to try to try to interject the 'what he did versus what I would have done' theme into their writings; thus sullying the individual they are attempting to describe.
If I WAS HIM, I would have done thus-and such...
Political History classes are FULL of 'biographical' things. They lack any real substance, though. How did Abraham Lincoln feel when he was bedding Mary Todd? When Brezinski turned his parents in to the Nazis, did he feel any sense of remorse? When the Secret Service agent Andrew Card whispered into Bush the Younger's ear that day, did he feel panicked, or was he reassured that all was going to plan; in that Florida elementary school?
I KNOW (I don't 'THINK') that you haven't thought out your comments.
FIVE WEEKS. Yup...
How is that rape culture working out for you, dirti scandi..
Why are you including Bush in this blame when Bush is so friendly with Putin back when he was the President? Remember Putin use to visit Bush in Crawford, TX back in those days.
You are also ignoring Obola who's the main petpetrator of what's going on now. He started with Syria then with Russia knowing Syria is protected by Russia. It may seem like a conspiracy theory but they're doing this because it's so obvious that people wouldn't believe it.
Russia is just another farce to feed the sheeple. We want to get the Russian speaking Ukranians to join Europe when they voted to stay with Russia. The more important question is will they ever push back and want Alaska back as the U.S. stole that from them in the day. They are actually a very rich resourse nation. So those who believe in finite resourses take notice. Just ask Germany and Europe.
Things would sure be a lot simpler if Israel would just move.
...into the Sea?
into a dee-lux apartment (in the sky)
They could all move to the desert in west Texas and no one would know any better... Plus, they should feel right at home...
Or maybe a Nevada proving ground? They'd truly feel right at home
Tick Tock
Yuan Euro Direct Trading Begins on 30-09-2014
http://www.bloomberg.com/news/2014-09-29/yuan-euro-direct-trading-begins...
India’s readiness to join the SCO
http://www.telegraphindia.com/1140913/jsp/nation/story_18830846.jsp
Iran and Pakistan are looking for full SCO membership.
http://in.rbth.com/world/2014/09/15/india_and_pakistan_expected_to_becom...
http://en.ria.ru/world/20140910/192803369/Iranian-Diplomat-Tehran-Seeks-...
In June of this year the members of S.C.O. commenced discussion of a merger of the Shanghai Cooperation Organization with the Collective Security Treaty Organization = Military Alliance to match the BRICS trading bloc and a counter to NATO.
Iran joins the BRICS and with the German YUAN exchange in Frankfort the _BRICS_ acronym then becomes _BIg RISC_ for Petro$$$
Tick Tock WW3
Fudge,
cant't upvote you. Its somehow blocked.
right click tab tab enter or tab tab tab enter if you don't like his name.
I can't, either, so I upvoted YOU instead.
It's almost like Obama WANTS the petro-dollar to die. He likely does. Deep down, he hates America more than just about anybody--at least White America.
yup. CLOWARD.PIVEN.STRATEGY. (google it if not familiar)
Oh FFS, what Obama wants is about as relevant to the plot of this story as the dermatitis on Jim Henson's hand was to Kermit's love for Miss Piggy.
You can't repeat the same trick twice anyway. Parties are prepared for this now. Sovjet union was like killing an already dead horse. Oil market is also bigger and Saudis have less spare capacity.
It might be that the western rulers kill their own economies. That will maybe get oil down if Asia can be dragged along.
The only reason the US is further in debt than Russia is because no one will lend to the Russians, except at punitive rates. Why? Because Russia defaulted on and devalued the ruble in 1998 and has a poor debt repayment record. Just recently Russia floated some bonds and had to pay almost 10% to get them sold. With Russian energy costing less and less with each passing week, Russia's deficit will continue to rise. It's going to be a long winter for Europe, but an even longer one for Russia.
Never thought about it that way. Your right. In the end, they will be better off for it though. We, (the U.S.) will not.
Our devaluation will start as interest rates rise. Until then, it is a bubble of other asset prices like stocks until the FED stops printing and monetizing all that debt.
saudi arabia has more oil than the u.s. has gold but selling either cheap is really not an advantage in the long run.
however in the short run it may suggest to russia to buy a few score million dollars worth of silver futures and stand for delivery. just to see what happens. cheaper and arguably safer than sinking tankers or bombing oil fields.
will never happen. putin is welcomed to make war with the west, but even he knows not to fuck with the overlords - the bankers.
world war is stimulus for the economies, while another financial meltdown is good for nobody, not even for russia.
some things are just off-limits. it's all kabuki, if you haven't noticed yet.
You're missing the fact that banksters are not a uniform group. Same as with mafia bosses.
For the most part they share Keynesian beliefs, but not necessarily political goals.
of course they are not uniform group but don't forget that the system (ponzi) that enables them to thrive is same for them all. silver and gold is their kryptonite. they are still the bankers for god sake, regardless of their political objectives.
and with bankers i'm referring to 'international' or 'merchant bankers according to carroll quigley, not to dimon, blankfein et al. they are as insignificant as obama.
4000 Ebola deaths, US troops in Liberia, Sierra Leone burial teams, NYC plane cleaners strike
http://wtfrly.com/2014/10/10/4000-ebola-deaths-us-troops-liberia-sierra-...
+1 for the Bernie X reference.
Where can i get a bathrobe like the ones you guys wear?
'Tom Tomorrow' was a cartoon theme in 'High Times' magazine. 'Zippy The Pinhead' was another one. This one is the ZIP. Head shops in Hermosa Beach have been all but shut down, so good luck with that 'bathrobe' request. I miss the freedom to walk in and buy 'Glass Head' bongs along with old-school dirty magazines from a vendor who is there to provide a need; free of 'government' intervention.
need twitter account for this awesome meme srlsy
When someone -- even Tyler -- asks me to "look this way", I automatically start looking all around me. I've seen enough Circus and Magic acts to know better.
Which is why I ask myself: Quis Bono? Which country has benefited the most so far from a very specific set of global events? I.e., which country has benefited the most from Manipulated/Suppressed prices for Commodities, PM and Oil? Which country has benefited the most from Russian sanctions? Lemme think... cheap, cheap, cheap prices for commodities, PM and energy that a large population needs. Who could that be?
A: China. China. CHINA. I'd include India also, but that is more of a lucky coincidence for them, as they have little to no political or economic pull vis-a-vis the EU or the US.
The US is driving Russia (and their resources and Mil tech) into the Chinese arms, and lets them buy oil, gas and PM at the proverbial Blue Light Special for quite some time now. Of course the US does nothing that those "doing God's work" at GS don't want them to do. Which tells me that GS is already deep, deep, deep into the Chinese system, so they can ride that gravy train also. They're getting rich off America and China. As are their brothers/cousins in Tel Aviv. The Israeli Mafia isn't just running the West, they are digging and worming their way into the Chinese system, and doing their best to topple the intransigent "Putin & The Russians".
No. Didn't you read the article, our fucking govt is allowing them to dump oil at below production prices into our market.
When Shinzo Abe got the message, he called for a party! Best buddies Koroda and the the gang eating sushi off a naked woman drinking shochu and singing Elvis songs mocking Koizumi. By the end of the party Abe was wearing his Depends on his head. His last words before passing out was "Control-P"
You are confusing oil price production prices and national budget figures.
Saudi can produce oil for $8-10 per barrel.
Where is your reference. You can't just pull it out your ass. Its not proper
My estimate is pretty close.
If I was PAID to do research I would provide the reference; but I am just participating as an amateur as a balm to my real work- I 'm not going to do the 'reference' work.
Believe me or check it yourself, I don't care.
oudinot
The marginal cost of production is maybe $5 to $25 per barrel for almost all oil. It is the fixed investment costs that make up the rest. In the Middle East- each country's national expenditures must be carried in the cost of oil, since nearly every ME oil producer has limited alternative revenues.
Even the oil sands have marginal costs of less than $20 per barrel. It is the huge fixed costs of setting up (sunk costs) that make total costs so high.
K
Look, i've worked in the industry, you don't know what you are talking about.
Saudi oil comes out pressurised, oil in Canadain tar sands need to be mined or steamed out which costs much, much more.
Saudi costs per barrel: $8-10; average [price in Canadian tar sands (depends on how new the equipment is for capital costs ) is about $62-$70 per barrel.
US fracking is around $70-$80 per barrrel.
Not much of a secret. ..oil went from 115 to 45 when Russian invaded Georgia
saudi arabia is so 80's and 90's, heard they started mineral drilling in 2008 for things not related to oil, Iraq is so 2000's
All the while Russia's getting squeezed the Chinese are sitting back grinning ear to ear getting cheaper oil with Europe subsequently making up Russia's Saudi-induced shortfall.
Europe's essentially about to get it in both holes now for at least the winter.
Russia is about to break even when all's said and done.
China's about to make a killing without having to do a damn thing.
U.S. Fuel Consumer et al, makes out some conveniently right before the mid-term elections and votes accordingly.
Saudi Arabia ends up getting less for their oil, which ultimately makes China richer from Russia's lower oil price, who nonetheless will keep getting friendlier with Russia and all the while Europe gets the big frozen kielbasa which makes Russia's 'loss' a wash, and the U.S. politically takes advantage of the Saudi's largesse with I'm sure a pay back in extra-protection services.
So this all sounds like a lose-win-lose-win deal.
All in all it looks like a well-balanced Cold War so far to me.
Interesting that WSJ doesn't estimate Russia's BE in the chart
The breakeven that they REPORT, you mean...
On that note. what is the breakeven of the United States?
The worst breakeven have some of the "frackers" They will suffer very soon.
You left out the 28 redacted pages which implicates the Saudis in 911.
No it was the Israelis the saudis were just there for photo ops
But China already signed long term contracts to purchase oil at $60 or $70/barrel, so if the price drops to $50, they are overpaying.
shale oilers will be stacking out at 80-85/bbl.-breakeven. i have a hard time buying the styke of this oil dipshit non-sense. reason oil is lower is lower overall demand. every oil producer producing what they do for da money and operational/capitol expenditures costs need it flowing. as w.w. slowdown progresses marginal producers will fall by the wayside bringing us back to balance. i call bullshit on this article. there is no honor amoungst thieves...
What! You mean to tell me that it's because people are driving less! No way! The DoE said its because of all the electric cars on the road.
....sigh....
Who's driving less?
People are driving MUCH less. Example: consider all those millions of unemployed, sitting at home. Everybody is having their standard of living ruined by the central bankers, and that extends to mobility. If you're up to your ears in debt, and living paycheque to paycheque, with purchasing power eroding visibly at the grocery store, are you going to pile the wife and kids into a Winnebago and go across country to Disneyland like back in the 80s? Not gonna happen. That IMO is one reason among others why cruise ship bookings are breaking records: the transportation cost is pooled. (That, plus the fact that it's "safe" and you don't have to do much thinking, which takes effort.) And if you don't have money to throw away on shit at the malls and department stores, then the department stores don't have the cash flow in order to place more orders for shit to be manufactured and shipped to your town, which means less commercial shipping. Net effect: reduced energy consumption. I travelled across country this summer and found many highways largely deserted. Rgds
also vehicles are way more efficient. my avalon really get 29-30 mpg at 70-75 mph. amazing compared to buick electra 225 with 400 cu in getting 12-13 mpg 30 years ago. imo vehicles can get 40-50 mpg no problem, just think interms of energy in a gallon and how to get it to a rotation most efficiently...
My Ford F-250 Super Duty gets 14 on a good day...
Deutschland's Volkswagen has a car called the XL1.
It’s the company’s first plug-in hybrid, and so efficient that it can get over 300 miles to a gallon of gas.
If they can work out the kinks and make it cheaper, it could become a game-changer.
my buick electra 225 had a 455ci. some things good gas mileage can't make up for.
Check out retail gasoline sales. We are selling about one third of what we were selling a decade ago.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M
Cloud9.5
Don't use that chart; it's misleading because retailers are getting out of selling gasoline.
US gasoline 2007
Produced: 3.3 billion barrels
Imported: 173 million barrels
Exported: 1.5 million barrels
US gasoline 2013
Produced: 3.2 billion barrels
Imported: 16.1 million barrels
Exported: 4.4 million barrels
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mgfupus1&f=a
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFIMUS1&f=A
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS2&f=M
Conventional Oil
Consumption 2006: 21.7 million barrels a day
Consumption 2014: 18.4 million barrels a day
http://www.eia.gov/countries/country-data.cfm?fips=US
http://www.eia.gov/countries/index.cfm?view=consumption
Produced 2006: 5.1 million barrels a day
Produced 2014: 7.4 million barrels a day
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A
Unconventional Oil
Shale 2014: 3.3 million barrels a day
http://peakoilbarrel.com/eia-petroleum-supply-monthly/
Other Liquids
Palm oil, ethanol and other biofuels came to 2,354,000 barrels per day
Note: These are mostly produced outside of the USA
http://peakoilbarrel.com/eia-update-march-production-numbers/comment-page-1/#comment-45269
It is all the electric cars on the road actually. "The only people who can afford to drive are rich people." They own Teslas.
Not only that but demand has collapsed and never recovered from the 2008 annihilation while ethanol stocks have absolutely soared.
Natural gas production continues to soar which is your basic feedstock for the chemical industry (and the basis building block for an industrial economy) and now the dollar has moonshot meaning oil producers like Venezuela and Argentina which need to raise hard currency (dollars) are going to have to go full on "el cheapo."
We're swimming in product...including electricity...and yes we can drive down these prices to even more dramatic lows. The economies of even small scale coal fired electrical generation are quite compelling.
I fail to see the supercharged growth as a consequence...simply put all this massive wealth creation has wound up on Wall Street not Main Street...bit those who thing the surging dollar is bad for profits I think need to rethink that actually.
At some point we will get a turn in our "there's just no there there" escape from 2008. What can be said for certain is that there is no shortage of capital both being spent and being made available.
I would argue strong this is by far the biggest capital boom in US history...on a par with World War II...just without the hiring.
If that changes you could get a statistically significant growth print...something in the 6-8 percent range...and that's when we'll see the bond vigilantes take flight and the hand of the Fed will finally be forced.
So far though...
Damn Vet you’re on a fucking brain flash there. You must be reading a lot of ZH these days.
DV, I must disagree with some of your premise. I see a few Leafs here and there, but I don't recall ever seeing a Tesla on the road. The spike in ethanol was due to the banning of MTBE around 2008 and it's mandatory replacement with ethanol, thanks to that sell-out porker, Sen. Grassley.
My observation as well. Wealthy people drive the biggest energy hogs to show that they can. The only people driving 'green' these days in my locale are trendy working-class leaf eaters with scarves around their necks who never go more than about 20 kliks from their government-subsidized multi-storey human cupboards. They're no more emancipated than Chinese labourers when they discovered the scooter.
We might see widespread adoption of electric cars someday, but the capital outlay is more than western nations can afford for the foreseeable future, and then only the wealthiest will be driving, because the price of oil will have to go cosmic first. Rgds
In the Atlanta area I see a Tesla about once every mile...no joke they are everywhere here. I imagine Kalifornia has quite a few as well. That said, nationwide, there are not nearly enough electric cars for that to be even a fraction of the reason for oil dropping. Global demand is down, the Saudis might be temporarily exacerbating that, but global demand is down period.
As a casual history buff, it is interesting to note that early adopters of electric cars were doctors, who did not want to risk the possibility of sprained/broken wrist from cranking a gasoline engine. Another contender, up until the 1930's depression were steam vehicles. Abner Doble had a production version that could be fired up and moving in around 45 seconds. If you are ever in a used bookstore and come across a copy of James Melton's "Bright Wheels Rolling", I highly recommend it. I suspect that if cold fusion has legs, one of it's early victories will be coupled with a steam-powered motorcar.
not to be asshole, but until oil hit 150/bbl, will any of these alternatives be viable. simple energy formula of a gallon or litre of gas.
I bought a new car in 2008. I did the math and figured a Prius didn't make sense until gasoline was $6/gallon, given that I only drive about 8,000 miles a year. So I bought a Toyota Yaris (Vitz in the rest of the world) for half the money. A Tesla or Leaf or any of the plug-in hybrids available cost even more than a Prius, so they are even less sensible at current gasoline prices.
Tesla: The vehicle that looks like the traditional car but has the default replacement/repair/warranty cycle of the early personal computer or cell phone monopoly/incompetence experience as imagined in Soviet Russia...
http://jalopnik.com/5887265/tesla-motors-devastating-design-problem
The US is not swimming in electrical generation. The Feds are trying to curtail generation using coal. Both coal and nuclear plants are being decomissioned. Plans for new generation plants have been delayed or cancelled. Water reservoirs in the West are depleted and hydropower generation is suffering. Wind and solar generation are a small part of the generation sources. Generation using natural gas is currently in favor.
I agree
Has anybody thought to try some vodka
Right on LL. This has got to be the stupidest thing that a stuck-on-stupid administration could think of, at least from the POV of their own self-interest.
How many toes do you have left, you STUPID DUMB FUCKS? Talk about a veritable feast of unintended consequenses...
Yep- Tight oil stocks are getting hammered. Watch a fucking PARADE of beat-up travel-trailers leaving Williston next week, and a spike in methamphetamine busts acrosd the upper midwest, as well-drilling gets shut off whlesale in the Bakken.
But that's not all... the only way for countries with a shortfall in revenue to do to make it up is to... sell more oil. Of course this wil just drive the price down farther.
As energy supplies increase and the price drops, real businesses will see a drop in their own costs...allowing them to improve their bottom line. Hiring will increase, food prices will drop, and consumer confidence, tied as it is to the big numbers on the gas-station signs, will go up.
As the economy improves, the Dems will take full credit for it, and manage to keep, or even increase, their numbers in Congress.
WAIT! You say, what's wrong with all that? Isn't that the plan? Yeah, I'm sure it is. BUt here are the unintended consequenses...
As the economy "improves", the Fed, which desperately wants to end QE, but can't (I gotta scratch my nose, but I can't take my finger out of the dike!), will sieze the opportunity to raise interest rates. Of course, the Fed's timing will be impeccable, because the oil-glut/ artificially depressed oil prices will not last forever. In fact...
I WILL BET that the Fed raises rates exactly one week before OPEC gets its shit together and says, "We cannot sustain this price war any longer".
THEN... rates go up and for three and a half days, the markets have an orgy. After the end of three and a half days, OPEC raises prices, and everyone else in the oil industry piles on... it's sudden mayhem in the markets as everyone realizes the whole thing was a mirage. But the Fed can't just drop interest rates, and in a week, the Dow has dropped 1000 pointsand headed south, gold is off by 25%, and the whole shit-show is up in smoke.
It's funny how you refer to the US as USSA, but pass on referring to Russia as USSR V2.0, even though Russia is making every effort to reconstitute what it can of the old SU. As Vlad himself wistfully noted, "The greatest catastrophe of the 20th was the fall of the SU."
You've got a tear on your cheek right now for Vlad's lost empire, don't you? :-)
I think this article is pretty far fetched. If Saudi Arabia wants to give away oil, they are the fools.
Russia can de-dollarize and start to charge for their commodities in Rubble's.... That way problem = fixed.
It's early.
Not necessarily. The price of oil is the price of oil. Even if they demand payment in rubles, gold, unicorn farts, whatever, the payment is still going to be roughly equivalent to how ever many rubles is equivalent to the dollar amount of a barrel of oil, so they are only going to get 90$ worth of rubles for this barrel of oil. Also, doing so could cause the ruble to appreciate compared to the dollar, which could destabilize them. No central bank in this world is a fan of sound, strong money that they can't print at will. Russia's is no different.
Carl quit staring at your navel lint and look at the big picture. Yes rubles would appreciate. Care to explain how an appreciating ruble would be destabilizing? Would destabalize their economy?
Appreciating currencies are just as dangerous and destabilizing as depreciating currncies in that it disturbs Trade Equilibrium.
When trade is destroyed then war is generally the outcome.
Stability is that which is required for the foundation of economics and International peace...which originates through, and results from, EQUITABLE TRADE.
If an exporter's currency appreciates then the importer is liable to for more compensation for the same goods and services. It is a stealth theft of resource from the importer to the exporter.
This breeds distrust.
For claiming conciousness, sometimes, it seems if you are rather one of the most unconcious whom comment here on this forum.
ALL WARS ARE ECONOMIC AND RESOURCE DRIVEN...ALL. (I rarely use that word but when it makes sense to do so then I do.)
nice when you/someone tells it like it is. i try to a void all and never, but in this case exception correct. at the core is money honey...spread dos legs for a buck baby(or fine diner), ha....
OK CB, here's how the race to the bottom for currency vaulation works:
1. A strong currency means that if someone buys (say, "strong" rubles with "weak" yuan), they get less rubles for their yuan. That means the relative price of wtever they buy with those rubles goes up. I'll give you an example: If I go to Juarez, looking for a 100 kilo Mexican hooker stuffed into a 50 kilo Mexican hooker's dress, and the exchange rate is 10 pesos to the dollar, I have to spend more dollars for that hooker than if the exchange rate is 100 pesos to the dollar.
As the peso's value drops, I'll go see my gordita more and more. If the peso strengthens, I'll see her less and less. The more I visit La Gordita, the more she makes, and spends into her local economy.
So, moving away from hookers and back to reality, if the ruble gets strong, then Russian oil gets more expensive, and people will buy less of it compared to someone else's oil. It's a double-whammy for Russia because if oil prices are already down, the last thing you want to do is sell LESS cheap oil.
Conversely, a strong ruble menas Russia has to pay less for other curencies, which means that Russians end up importing more, and buying les domestically produced items. This trade deficit hurts Russian businesses. People get laid off, and there is more pain at the common level.
All this is potentially destbilizing in the political sphere. Hope this helps.
I think not everything and every move of the market is some kind of back room conspiracy. While there may be some coordinated interests this still looks like basic economics for the most part.
Saudi is dropping its prices for one reason and one reason only; to pick up market share.
By temporarily dropping prices Saudi chases out low margin producers like Canadian tar sands and US fracking.
Once these competitors are broken, Saudi ratches up the 'price of pussy.'
All the west has to do is target Russian oil pipelines into,,,,, The military game is a slippery slope, Russia doesn't win that game, doesn't want war with the west, and isn't on a kamikaze mission. That said, the west doesn't want war with Russia either or else we'd be at war right now.
You honestly think precedent means shit to the west? Besides which, the US dollar is valuable because what? You need dollars to buy oil, you need dollars to buy oil because why? Nixon cut a deal with the Saudi's to keep the Russians at bay. So... A Russian attack on Saudi tankers would result in what? Full on WWIII, with Russia at the bad end of a world pissed about oil supplies being disrupted.
I sure as fuck hope the people in the Kremlin are smarter than the trolls they hire.
Now that I think about, Kerry does look like a camel insemination bitch.
I still think he looks like a horse. A fucked up broken down old nag of a horse, but still...
Quit being mean to Kerry.
Have some respect.
Just because he looks entirely comfortable with all those camel buggerers fondling their gonads in public with him, is not sufficient reason to not accord the Man His Just Due Respect.
In fact I'm a little jealous ... he's there getting his summer of love while I'm stuck here yacking with you motley bunch.
Feel free to provide oral administrative services to Hillary. If your luck holds out, you too could be an ambassador or an assistant Sec State.
Sick monkey
I think you have to read between the lines. The Russians are not going to attack themselves....there are plenty of Shiites in Bahrain....arm them with Russian weapons and then its on.
Exactly, exactly. They can do that and no matter what the US says to the UN they have set precedent and it won't go anywhere. Saudi Arabia has to remember, the US will not go to WWIII over you no matter what you say. I mean they will be pissed but what could we do. The only option is to attack Russia and then it won't matter and we have WWIII.
dear Cosmos,
I love it.bring it on.Out with the heads of Saudi,UAE,Qatari and bahrani monarchy.
you're one of the dumbest sonsabitches on this board, and you go out of your way to prove it
why don't you pay attention to what Russia is *really* saying underneath all their propaganda instead of making up stupid loser fantasies that will never happen... for instance, the Russian central bank's announcement that if oil went below $60 a barrel they'd have to intervene in the economy... know what that means? that means they a) think there's a good chance it will hit that target, and b) if so, the odds are good it will continue lower
very few players in the global oil market at the moment have an incentive to cut production... I can call out 7 of the 12 OPEC members that absolutely positively will not do it... no, not even the Saudis... they all need the money to either pay people off to keep them happy or rebuild their ruined economies, or in some cases both
what can go down will go down and the oil bear is just getting started... there's simply too much supply chasing too little demand right now, prices will correct for that... there have been analysts calling for this since 2013, this shouldn't be a huge fucking surprise to anyone
Note in that photo how those Saudi chieftans are holding their boners down until they can get Kerry inside the tent. I think he took it in both holes this time.
He looks enough like a horse that I can extrapolate a camel fucker getting worked up by the idea.
Well, except for marrying rich, gullible women. Kerry seems to have that down pat.
rbg81, people say there's more to the story, like she's war booty. Her and her dead husband's fortune handed to the mafia capo Kerry/Kohn after they wacked Senator Heinz in a bizarre, fiery plane crash in 1991 as he was about to expose ... guess who? ... The Fed.
Check it out. See if I'm wrong.
BINGO!! Most of the Mid-East Asia Minor crap since abt 1996 has had to do with potential hi-tech threats to the bigoil-bigbank-biggov feudal state
"it" has always had something to do with this and stuff like it.
+breaking the tyranny!
poor warmongers! what will they fight for then, if we have endless energy sources? golfplaygrounds?
LENR/CANR is real, verified by hundreds of laboratories world wide.
Could be a game changer.
Look into it.
LENR/CANR is real, has been verified by hundreds of labs world wide.
go back to site and read dc comment.
expect $65 oil, I'd say. sorry vlad.
I expect a veritable tsunami of Target style breaches are in the pipeline. Vlad is going to pull out all the stops and unleash his hacker minions who will be rewarded with the Order of Lenin and some gift cards.
Hey BK how are you going to stop the Russians if they declare Saudi Arabia a nation of terrorists ie A member of the Axis of Evil. Who is going to stop Russian ICBMs non nuclear of course from wiping out Saudi oil infrastructure or who will protect Saudi Tankers all over the world?
If America expects the Russians to sit by the wayside without doing anything when oil is use as a weapon, then the Russians can expect the same thing of the Americans, when they do it also by creating a shortage.
Again, the whole civilized world. IF Russia made threats to shut the oil taps they'd be divided up among every car driving, manufacturing, sewage system using nation on Earth. Not even China would pretend to make nice with you then.
And now you know why there is no and will never be peace on earth.
Fucking duchebags
Oil?
If the world is getting fucked, somebody has to provide the lube.
Look at Ebola from Putin's POV.
We say Putin's crazy and will use nukes first. He says the West is crazy and they'll use nukes first.
Then, in the middle of all this 'craziness' back and forth, the West launches a biowarfare attack on the entire globe, starting with mid-level oil producers, soon to move to the upper-level oil producers (Nigerians to the Hajj), and all the customers that use the most oil (the West).
He's looking at the West like, "HOLY FUCK, these guys are CRAZY!"
How do you play chess with an opponent that is killing off everything that matters, starting with themselves?
He's on a birthday vacation, thinking he might as well never come back.
Guy's gonna rub and tug for a whole week!
Listen.
Youz two are a coupla geopolitical "GENIUSES".
You read too much Strat-bore.
Ha! I call it 'Strat-Whore': "SANITIZED Foreign Intelligence." Rgds
Sending ICBMs is a pretty far-fetched idea.
Also completely idiotic and leading to a shooting war with the so-called West.
Why do you think comrade Putin didnt overran this new Ukraine with his tanks in the first week of maidan?
Because comrade Putin does not want a shooting war with US and its vociferous puppets, knowing full well that in the end he will get what he wants anyways, as the US empire crumbles upon its own contradictions.
This being said, a tanker sinking on the open seas, heh, who can tell.A goat-herders weapon transport ship sunk earlier this year, zero seas and the poor thing broke in half of its own accord.
The Russians aren't going to attack militarily. This war will be fought and won on a asymetric level.
Russia will use RT as a main weapon. As the US makes more illegal secret deals and hatches more diabolical conspiracies, RT will contine to expose them. The Russians learned from bitter experience the economic cost of an enslaved society. They will force the US to adopt economically crippling controls over the American populace. Truth is a weapon againt liars.
Russia will continue to build economic alliances with the BRICS nations. They will find a way to make cheap oil work in their favor- if not monetarily, then politically.
The Cubans will find an effective, low-cost and appropriate technology method of containing ebola. The Amercans will ignore it, just as they have studiousy ignored the Cuban public health miracle, and the Cuban agricultural miracle. Cubans will cure ebola at a fraction of thecost per patient than Americans. The Russians wil capitalize on Cuban expertise, and ebola will cripple America while ussia will have very few cases.
Russia will say the course with Assad, and even provide him with more military aid. As long as Assad is in power, the American Middle East hegemonic plan will not be realized. Everything America does in the ME is a two-edged sword. The US is not watching for the backswing of that sword.
Russia could enter into its own oil-producing cartel with Iran, the post-Soviet Stans, and others, incuding the Kurds. If this cartel were abe to nominally produce more oil than OPEC, then it may have some say over the direction of oil prices. The Saudis are pumping tar. There is a limit to how long they can cooperate with the US in an oil price war, especially if there are others giving pressure towards higher prices.
No, Russia does not need to use her military.
Putin is a relic , and really needs to get over his short girl complex.
You're just crying because he took back all the loot your hommies stole. Yes you are a victim. Everybody knows. Its a darn shame. /sarc
You're about a month late, laddie. ZH did an article on this recently, whereby Russia played (planned for?) the scenario of Oil going down to $65.
Before that happens, a LOT of players will be DOA, and Texans will have a frakking coronary. But, what the frack, eh?
ps Is your avatar a pic of Bob Dylan?
hey, frack you, buddy.
Do these people forget that winter is coming and Russia is the largest nat gas supplier to European countries. Russians have been known to weather financial storms much better than the West. Russia still has a formed culture unlike the West that has been indoctrinated with multiculturalism. IMO, muliticulturalism is like having no to little culture which is why there is mass confusion and instability, product of an obvious financial mess throughout the West. My point is Russia is more stable because of its stronger cultural values, even though it is not a bastion for liberty. Kerry may be having some success with the Saudis putting pressure on Russia, but it doesn't get cold there like it does in Europe.
http://www.examiner.com/article/russia-dumping-dollars-to-use-to-protect...
Not sure why this got so many down votes. Thou shalt not say negative things about Putin I guess. But oil at 65 a barrel isn't out of the question. Demand is collapsing. Economies in the US, EU, are in a depression, no matter what our elected officials say. The facade of china is starting to unravel. The Baltic dry index is in the dumps. People are driving less, and buying less. Even those with the discretionary income to take vacations or take weekend boating outings are choosing not to do so.
You got the down votes 'cos trolls don't like those who write truth. Take it as a compliment.
Demand is not collapsing, India and China are adding new automobiles at a rather fast clip. And they are not teslas hahha
Demand is down because oil prices are high. As energy prices drop, watch demand surge.
Carl re. "Not sure why ...", as I explained to you already, [in not so many words] given the inelastic demand for Russian commodities, Russia should be happy with an appreciating ruble. You said a rising ruble will destablize the Russian economy. Hence the down vote from me.
Hope that clears it up for you.