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US "Secret" Deal With Saudis Backfires After Oil Minister Says US Should Cut First
Who could have seen this coming? With oil prices holding at 4-year lows, heavily pressuring around half of US shale production economics, the "secret" US deal (see here and here) with Saudi Arabia to crush Russia via oil over-supply in a slumping demand world appears to be backfiring rapidly for John Kerry and his strategery team. Capable of withstanding considerably lower prices for longer, Saudi Arabia's oil minister Ali al-Naimi proclaimed "no one should cut production and the market will stabilize itself," adding rather ominously (for the US economy and HY default rates), "Why should Saudi Arabia cut? The U.S. is a big producer too now. Should they cut?"
OPEC leader Saudi Arabia signaled on Wednesday it was unlikely to push for a major change in oil output at the producer group's meeting this week, a day after Russia refused to cooperate in any production cut. Saudi Oil Minister Ali al-Naimi said he expected the oil market "to stabilize itself eventually."
...
Iranian Oil Minister Bijan Zangeneh said some OPEC members, although not Iran itself, were gearing up for a battle over market share and insisted that non-OPEC producers needed to participate in any OPEC-led output cut.
"The most important thing for all of us is the unity and solidarity of OPEC, and in this situation I believe we need to have the contribution of non-OPEC producers for managing the market," Zangeneh told reporters.
"Some OPEC members believe that this is the time where we need to defend market share ... All the experts in the market believe we have oversupply in the market and next year we will have more oversupply," he added.
Which led the Saudi Minister to comment...
"Why should Saudi Arabia cut? The U.S. is a big producer too now. Should they cut?"
* * *
And the reaction not good - 4-year lows
* * *
Here's who faces problems...
* * *
With prices expected to drop to $60 on no cut, maybe the "unequivocally
good" news for the US economy from lower oil prices should be rethunk.
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No honor among thieves.
First you take our cheap healthcare.....then you take our cheap gas.....you guys suck.
LOL. Fucking Saudis. ...fuck them .... hard
And the camels they rode in on!
But the truth of the matter with them is they're headed for an even moar horrible Arab Spring cause they're not making the money from us to pacify their populace now
Fuck em.
This also sets the stage for an attack against Iran as there will be less of an "oil price shock" from it
So then oil price is also manipulated?
Shhh!
http://www.wallpapersdb.org/wallpapers/rihanna/rihanna_shhh_1600x1200.jpg
This is the kind of chaos that ensues when one tries to "manage" an economic system. It seems to work for awhile, and you start thinking you are a god, or at least godlike. Eventually you piss off enough others that they stop cooperating, and you learn their cooperation was essential to your "control".
Then, you "lose control".
The bestest friends: "You scratch my back and I will… give you Ebola?" ;-)
Looney
that's really the perfect come-back. Why should they reduce? It's obvious that this scumbag, criminal administration's policies are nothing but criminal and usually ill-conceived because most of the world now knows what the hell they're up to and that they are the lapdogs of the NWO and the banksters who are their puppetmasters.
And Saudi now sells most of their oil to China while America, thanks to the private drillers and no thanks to O-Fuck-Tard in the Whore House, is now a net exporter and doesn't need the Saudi oil now.
You know China is loving this oil war because they're buying it up by the super-tanker loads just like they are the gold.
I know the prices suck for the private oil companies, but they're the ones who leveraged themselves massively too much, so why should we have to pay more for it?
Supply and demand and a free market is how price should be set. Instead we've got nothing but scumbags at all levels and at every corner fucking up the entire world markets from toothbrushes to houses to fiat currency to oil and gold, you fucking name it it's being fucked with by every kind of scumbag. There is no law anymore.
So even though the Saudi's are fucking scumbags well so are all these sociopath, treasonous fucks in D.C. from top to bottom. It's all rotten to the core.
So let's see what the Marxist in Chief's puppetmasters will have him do next. Seems like we've got a gold war, an oil war, a currency war, a debt war, proxy regional wars, and soon to be a hot mess of a world war coming thanks to all these assholes.
So keep stacking that phyzz, ZH'ers. Guns, ammo, food, water, essential gear and other supplies, silver and gold. Keep stacking and be ready. That's really all we can do because we can only do our best to control ourselves and our lives right now...we can't control these motherfuckers driving the world off the cliff. We can just do our best to survive the fall and make it through to whatever will be at the bottom and on the other side of all this shit.
Hey, Happy Thanksgiving too! hahaha ;-)
This may be off topic but if you’re interested in the NSA/privacy issue, this is worth checking out. Easy to read cartoon strip from Aljazeera.
http://projects.aljazeera.com/2014/terms-of-service/#1
Who would have thunk it..., John Kerry not getting the policy right...?
I suspect that it's mother nature and cold hard facts at the well heads driving any cuts, and not demand destruction or price discovery or mutually agreements. But just like the polar vortex and "russia" and everything else can be paraded around as an excuse for just about anything, so is demand destruction and price points or agreements worked from the excuse angle.
How long has OPEC dictated oil prices around the world and made their families fabulously wealthy, all while they squeezed the balls of the rest of the world... Well, that time is over with demand down, supplies up and more countries producing than OPEC or Saudi can control... The downside in the US will be bond defaults, lost jobs and scaled back production until prices go back up... The drillers are getting hammered today with Sea Drill down 15% on the day...
Saudis cut because US militarty told them so.
US doesn't negotiate with captured royal morons.
Otherwise US royalty protection services will move out and leave them on the streets.
I would love to believe that. Until I see our "leaders" stop holding hands(Bush) or bowing(Obama), I'll contunue to believe that the U.S. is indeed their bitch.
The question is who has who by the balls... If it comes down to a Mexican standoff, Barry will fold in a New York minute...
I am not so sure about that, Barry is a total sissy but he does know that he commands a very, very large military that could wipe out the House of Saud in a NY Minute and keep the oil flowing.
Yer average Saudi might hate their Govt with a passion, but like the Vietnamese, they WILL DEFEND THEIR HOMELAND!
haha + 1000
Save America
Sorry to have to correct you as I enjoyed most of your rant. However this BS promulgated by the lairs or morons (take your pick) on Fox News is par for the dis-information course
"And Saudi now sells most of their oil to China while America, thanks to the private drillers and no thanks to O-Fuck-Tard in the Whore House, is now a net exporter and doesn't need the Saudi oil now. "
While our consumption has dropped from around 21 million barrels a day since 2008 to now about 17 Million Barrels a Day, Courtesy of a crappy economy and near 100 MILLION working age adults not in the workforce we still import oil, gasoline, diesel, and all other types of petroleum based product to the tune of 5-6 MILLION BARRELS A DAY!
We are not now or most likely again a NET EXPORTER of Oil. I could caveat it and say if we ever become a NET exporter again it will be because we have shrunk our economy to 1/2 what it is today and must export for revenue.......one scary thought.
I wil add IMO the shale oil revolution is an expensive rapidly depleting enterprise that will soon (next couple of years) peak out. Sooner if prices don't rapidly escalate.
Happy Thanksgiving
yep...I guess I meant to say that we "produce" more oil now days than we import...
and again...no thanks to O-Fuck-Tard. LOL
thanks man!
The US is not a net exporter.
are you sayin' they just started "managing" the economic system? when did that started? under Obama of course ... that godamn commie, he is guilty of everything ... otherwise, we were just fine ...
No of course I am not saying that. The economic system management / manipulation has incrementally and constantly increased, in response to the blowback from the earlier manipulations, until now virtually everything is manipulated, and now everyone can see where the manipulations work against them, and now everyone is pissed off, and no one wants to cooperate anymore.
Revolutions occur when the pain of staying with the current system is perceived to be greater than the pain of violently tearing your society apart and putting it back together. We are getting closer. Isn't that obvious?
"until now virtually everything is manipulated"
it always has been completely manipulated ... otherwise, how can one maintain control?
you dont believe in those free markets theories where the free competition, the strongest and the best win do you? that might be true on a physical game ... but NEVER in finance .. at least thats my take ... i might be wrong who knows ... we are all guessing since we never been up there ... it is like talking about life in another planet
The cure for lower prices, is lower prices.
Naaa...
Does a baby shit in it's diaper or the sun rise?
Answer: Diaper
Nobody craps on a sun rise.
Good eye...
"Why should the Saudis cut"
because dummy you make more money if you sell the oil at $150, instead of $50 ... we are trying to help you achieve it ... geez these guys should have been left in the desert, where they belong and where they are going soooon ...
Right...they'll make it up on volumn!!
Thats the most retarded business model and yet most people still stick to it. Would you rather sell a billion gallons of gas and lose a penny a gallon? Or sell a million gallons of gas and make a dime a gallon. Amazon is really bringing money to the bottom line isn't it.
Put oil back to $40 a barrel and leave it there, let the cost of energy be cheap to the consumer.
@cnmcdee
oil $40 = $600 Gold
So when are we paying off that deficit again?
Maybe if we just slowed it down...........naw!!!
Has gold not gone up around 60$ from its low while oil has been plummeting?
I honestly thought, contrary to ZH, that gas was dropping for an election, and that it would come soaring back up. Especially under the cover of some OPEC or emergency UN/G 20 type meeting.
$10/$300
I know, all hate it here. But, deflation, bitchez.
maybe they don't like you? lol
where do i come into the equation? i thought it was between Kerry and Saudis and i am siding with Kerry as a disclosure
The relationship between volume and price is not linear. It is a delicate balancing act to be able to reduce price and have volume increase enough so that the revenues remain unchanged or riise. It is equally difficult to cut production to where price continues to rise without further cuts - ie volume is below the minimum essential demand.
the problem is that there are many players and the tendency is to cheat on cuts - as we have seen in prior times when oil was really cheap - in which case the target minimum volume is never achieved and price does not rise as it should. It is a catch-22.
Don't forget the goats, even if they are beautiful..
Oh wait somebody else is already banging their goats..
https://www.youtube.com/watch?v=YNH7WU6swGM
Anybody organizing social protests in Saudi Arabia will be labeled terrorists and droned by the US military. Wait, what am I talking about? It probably has already happened.
Man..So well thought out Headbanger...Yeah...
Let that fucking Arab Spring happen over there in Saudi. Who needs them?
Then when their locals blow up the fucking Oil Wells and pipelines, and since the USA runs a DEFICIT of production as we burn more Oil than we can possibly extract, then what will that do to the price of Oil?
It will skyrocket.
So yeah. I agree. Fuck those Arabs. It is not like that we haven't been fucking them for the past FORTY YEARS, trading them worthless Paper Promises for their Oil. Of course it is because of that, and only that, that we have been able to claim the World Reserve Currency status, and lived at a higher standard of living than would have been possible after the DEFAULT of Bretton Woods.
Yeah. They ENABLED US to live as well as we do, Headbanger. So we need to fuck them because of that.
Yeah fuck those guys because they are tired of being fucked in the ass by a big Red, White, and Blue, Star Spangled DICK. Yeah Headbanger...Fuck them some more.
YOU ALL DESERVE EXACTLY WHAT YOU ARE ASKING FOR.
I hope that the USA collapses into ashes after the ensuiing inferno burns it down.
BTW...Do you know what a headbanger is? It is someone who bangs heads...has sex with heads.
thats really sick ... is it you with another name ? couldnt resist could you?
Sounds like Tall Tom got up on the wrong side of the bed...
Well Sherman...
Headbanger, like Arius, is a statist warmonger. It pisses me off.
From his post....
Fuck em.
This also sets the stage for an attack against Iran as there will be less of an "oil price shock" from it
try to keep it short, nobody likes to (or can) read long rages ... i know is difficult to write shortly, needs concentration and all that ... it is easier longer
You don't think that those "worthless pieces of paper" IOUs haven't been converted into hard assets by the House of Saud (#1 Terrorist sponsoring State) over the last few decades? They fully knew what they were getting into. We secure thier position, they secure our BS screw everyone over, debt slave based money system.
This is a good one... How will the spin doctors spin it?
"We can't tell independent operators what to do in our capitalist system, but you can in your monarchy/command system. "
Right! Can't their "king" dictator person just wave his magic wand or something. Don't you morons believe that God gives these bastards ownership over countries? Isn't that how the British "royals" own half the country still? God and all right? Then they should have super magic powers, also bestowed upon them by God.
And Ayatollah Obama is any different?? !
No.
independent operators = corporations.
I've worked oil and gas in Northern Alberta for 15 years.
I think it's time to go get my Class II drivers license so I can go drive a bus as a possible backup, or Class I for Truck Driver.
But I remember working at Syncrude in 2005. Oil was $45 / barrel and they bemoaned that breakeven was $20.
Suddenly oil goes to $150 and the oil media reports from then forward that breakeven is $80..
Magic.
Now that nobody can afford to drive anymore they 'bless us' with 99 cent / liter fuel $4.00 / gallon..
Thanks big oil!
Strip out Big Governments cut and we be free wheeling. What % of a gallon of gas go's to club you to death?
Just under $1/gal here in Pennsylvania. Right now, Deisel is $3.69/gal
Ah, somebody who knows the oil industry and who REMEMBERS how to count honestly, not BS.
TYVM.
I and many others are on record as laughing at this supposed deal from day 0. Even if the nebulous deal is true it was fraught with peril from the get go.
Sad part all it means is trouble for oil producers in africa, iran and iraq if things carry on too long vis avis the western war machine going on a few oilfield bombing runs.
"No, you hang up first" "You hang up first" "Come on, you hang up first" "Nope, you hang up first"
Pax Americana Unilateral morphing to Multilateral in front of our very eyes!
On a more esoteric level, what the Sauds are saying to US is : Karma!
But, Karma is a two edged sword and look out Wahhabites, it can bite back hard even in an absolute kingdom of Salafist "heaven".
Yes, when Dear Henry's Petrodollar dream-- an age to last a century or more, for the Neo-cons of a "new american century" ilk-- starts going belly up, you can see its oily navel now appearing from under the sands of Araby.
All completely pointless. They will ALL (Russia, Saudi, Shale plays,...) pump as much as they physically can, even if crude goes to $30-40 or even below, it is not like they have a choice. Until they all explode (Russia, Saudi, Venezuela, Nigeria) or go bankrupt (Shale plays). And if anyone thinks US will not sacrify shale plays to kick Russia to the kerb again... Think again (regardless what this GRU psy-ops website tells you).
They are going to invade Iran this spring to take out some of their supply to Russia that is getting restamped and sold to Europe.
They'll detonate a dirty nuke in Chicago to blaim them for it.
Won't really hurt much only thing in Chicago are goons gang banging and shooting each other 20x day.
Boomerang Bitchez!
The way every aggressive act by Backfire Kerry turns around and pummels the US is starting to become amusing. The US plans to get control of the middle east and ends up creating ISIS. They try to isolate Russia and end up joining them to China. They try to hurt Russia through forcing down the price of oil and end up destroying large parts of their oil industry. John Kerry seems to be a modern day John Cleese and what makes it even better is that he is really not trying to be funny.
luckylongshot,
john cleese is brilliant...perhaps backfire kerry (perfect new name) is nearer to the pink panther detective, certainly disaster dogs him.
Baldrick never runs out of cunning plans.
Can I have some MOAR deflation please?
PLEASE!
Good news for the con-omy.
OK boys, here's the plan. Flood the market and push out the weak hands. If that also squeezes Putin......well, killing two birds with one stone ain't all that bad.
<Just remember, we all must sing the same tune.>
sounds like a plan to me ... how can i make money? that is the eternal question isnt it?
Not only no, but hell no.
PRINCIPLES OVER PROFITS.
So you want to make Blood Money, Arius?
You are so typical of today's socialist.
You will kill for currency. You will have others die so that you may profit.
You, like Obama, Bush, and the rest, are nothing more than warmongering pieces of human fecal waste.
You stack?
Not exactly bloodless.
There you go. I think the best plan would be to commit suicide. Okay, you go first.
LOL! Fucking idiots.
So, maybe we should join OPEC? Hell, why not? No shortage of bad ideas running around out there, why not try a few more of them?
Whatever happens let's NOT try this one: Let the forces of supply and demand figure it out and the chips fall where they may. If that means some shale oil companies lose and a different balace point is found, so be it.
"Let the forces of supply and demand figure it out and the chips fall where they may. If that means some shale oil companies lose and a different balace point is found, so be it."
The concept of a fair and open market seems like a relic these days, as nature abhors a vacuum... and oligarchs will step in and rig the games when they can. They even invent new games that are rigged from conception... and muppets line up to play... and get fleeced.
FUBAR.
FAIR AND OPEN MARKET???!!!! WHAT ARE YOU, SOME KIND OF TERRORIST??!!
The E is for exports.
There is always a way to counter. Someone should be storing oil at these cheaper prices and just being patient. When the price goes up, which it will, they will make a handsome profit.
Shale oil is expensive to produce. Eventually someone gets burned besides the Russians.
Crap....totally forgot about Russians.
Well we could always just stop production in the Gulf......oh wait.
@yogibear
There is always a way to counter. Someone should be storing oil at these cheaper prices and just being patient. When the price goes up, which it will, they will make a handsome profit.
That will be China....................but you knew that?
Actually Abe in Japan is more likely to print a few zillion yen and buy up all the cheap oil. Why not? Works for us. It will work for japan until it doesn't. Who cares about the long term -it's the next election and short term profits that matter.
@Savyindallas
Why would Japs print when the FED has already printed it for them???
Just buy the oil with $ they donot need.
China already way ahead of the game.........more oil tankers heading for to China than you can shake your stick at.
Somewhere in a forgotten region of the U.S. a burgeoning once enthusiastic fracking entrepreneur is holding up one finger in the general direction of Mecca.
Cat's got my support.
As he pollutes millions of acres of pristine land with his other hand. Fuck you frackers right in the ass with a baseball bat!
The propaganda....is fluxing nicely.
O.K., Just as soon as we have a King with omnipotent authority to order thousands of competing private and public companies to do it.
Oh wait….
Our king has a way to get rid of fracking here, apparently.
It's the old double double cross. Next, the Saudis turn east.
That was my thought. Perhaps they have more than one secret deal.
US/ Canadian shale drillers are gonna be dropping like flies @ $60 /bbl.
The cuts are coming and they won't be voluntary.
http://www.bloombergview.com/articles/2014-11-26/why-opec-will-keep-oil-...
LOL the amis step on their proverbial dicks again and again
...but that's what makes them so exceptional
You don't think it wasn't by design?
Do you think Saudi Arabia want's to give up it's monopoly to the US market it's enjoyed since 1973 like Russia wants to give up it's main monopoly supply to Europe?
The US imports more oil from Venezuela and Canada than they do from SA
It's about control and power, not where the oil necessarily comes from....hence the "Petrodollar."
Keep the game going. Especially when it is rigged in your favor.
@shovelhead
Oil $60 = Gold $900
I am forecasting Gold at $1000 and Oil at $60.
It is a buying opportunity as it will not last.
The corrections generally overshoot by the same magnitudes So the prices will also soar above the means.
Cheap energy should drive the economy forward. Now we have cheap energy and getting cheaper... so what's wrong with this picture? The economy still not jumping into gear? I think the levers these guys pull are starting to come off in their hands.
And God stole the handles, but the train it won't stop going, no it just slow down.
Oil drops 25% in price - but!
Gas drops 5% in price.
maybe not so much cheap!
They are still holding expensive inventory and since there are price controls...unofficially...you can expect elevated prices for awhile.
Furthermore they will increase taxes with this opportunity.
...and along with the increased taxes they will use the excuse of rising oil prices to increase the price at the pump even though they are using their cheaper inventory. Notice how slow gas prices drop but how quickly they rise.
Happy motoring
No kidding... drive people out of work and wratchet up the cost of everything ... and surprise, people aren't driving much or spending.. so OIL DEMAND IS GONNA TANK ... if not now then shortly
this drop oil down to crush russia is just bullshit.....
Like the brits an us arguing over who gets to blow the stit out of the next german village to be praised, Same side, so who are they fighting?
GIVE ME A BREAK .... Wah wah. poooor BIG OIL isn't making money
Bullshit, they alway make money ! if you believe that tripe their trying to sell then you have sand in your head
Agree.
The issue is whether or not they make enough money to continue with exploration for more oil at the increasingly higher costs.
yes, they do.
Government will provide rebates, as long as technology exists and as long as people do not mind the environmental impact
that is if you believe the Rubbish about super super high exploration costs... its fraudulent
they are getting a free resource .. and only have to drill a hole to get it !! oh and make up a FAKE story on how much it cost to hide some of the extreme profits
Haven't ever heard of OIL companies going under... Its all completely RIGGED
@gmak
It sounds just like the argument with the miners and the costs to dig up metal. Makes me wonder. Both are treated as commodities in the MSM. Are both considered canaries in the coal mine?
They can't lose, they short their own stocks and buy futures contracts on their own deliveries. They literally can't lose.
LOL looks like the US wants to join OPEC now. Or, is this the moment the US uses to blow it apart?
I love it when the wants of producers and the needs of consumers are essentially the opposite of one another. It smells like free markets!
Like natgas of few yrs ago.....kept producing until someone dropped dead at $1.90.
This time with oil is nastier. Price war will continue until a few countries or the entire world ends in a recession.
Cheap oil leads to global prosperity, not recession.
if the US were serious, they could open up Alaska production and end the house of saud - but they need these turds to use the USD - so the house of Saud stays, the USD stays and everything remains the same.
get ready for lower oil prices folks
they tried to open but failed
the reserve numbers in Alaska are so heavily politicized that we'll never know the truth about what's up there... the fact that everything about it is hush-hush and heavily manipulated by BLM tells you all you need to know, however... if you treat something like it's an ace in the hole, it's an ace in the hole...
+1 for Mr. Willie.
An interesting side effect might be accelerating deflation. If gas prices fall along with the price of a bbl of oil, the 'consumer' might use the extra cash to reduce debt instead of consume - uncertainty with the future and all that. If so, the debt reduction without additional borrowing is deflationary because it is the destruction of a money substitute (debt /credit is not money but everyone has been treating it as such - ie consuming with it instead of building productive capactiy that repays the debt).
Watch the consumer credit stats as gas prices come down over the next 6 - 12 months (if they do).
Isn't it a good thing for people to pay off their debts? All it really does is allow people to consume more in the future. I know, in my case, as i've been paying off my credit cards and loans, i have more money available for consumption than i did when i was just carrying the debt and having to pay the monthly payments. Seems to me there isn't anything particularly scary about deflation. It's just a market reaction to people saving or paying off their debt rather than spending. Producers cut their prices to try to get more people to spend money rather than save it.
yes yes RTyler, Russia always wins... we get it... except when they don't, which would be in this case...
I'll keep saying it until it sinks in... none of the oil producing players have any incentive to cut production... none, zero, nada... expect more of the same, lots of talk & misdirection and no cuts from any of the players involved
Supply and demand.
We printed so many petrodollars, that oil should be $20/barrel.
why are we even having this conversation, o thats right we are in global depression
Enough with this moronity.
Cheap oil = abundance of energy = good life (as long as technology exists and people do not mind the environmental impact)
The concept of profit and money is just a legal definition and an accounting entry, for as long as fiat money is accepted in exchange for goods and services.
Question:
Do oil companies make money?
Answer:
Yes, if congress decides so.
As ZeroHedge is never tired of saying, as prices fall marginal production will also fall. Then production wiill fall below demand and prices will rise. I know this is new information to some people.
"About 80 percent of shale “oil production coming into the system in 2015 would be economic between $50 and $69 a barrel,” Yergin said. “I think there was an assumption among OPEC countries and, you know, Europeans and others, kind of below $90 the shale gas, the shale oil, would not be viable.” Daniel Yergin
http://www.businessweek.com/news/2014-11-21/opec-underestimated-resilien...
I read recently (here?) that the oil market is oversupplied to the tune of 2 million bbl per day. Total consumption is around 90, so we're only talking a 2% drop in output to rebalance. I believe there are still questions about the trend in demand, however.
Even if they say they are going to cut....they will all cheat....its what they do...would you trust a Muduro.....NOT...so they will turn into the ECB talking heads...all talk..no action...
Been saying this all along. The alleged Saudi-US deal is impossible since the primary loser of lower oil prices will be none other than US LTO.
now c'mon... the big winner in all of this regardless of producers is the refiners... who's the largest oil refiner in the world? think about it... 20% of world refiner capacity is in the US, followed by China at 12%... you think either China or the US is going to cry a river when crude prices come down? hell no, they're going to bootstrap a recovery with cheap gas and diesel... we're just in the beginning phases of this, check back in for the 2016 elections and you'll see what I mean... a cheap energy recovery that the GOP House and Senate will take all the credit for come presidential election time... book it, done, set your watch to it...
The Peak Oil Theory has turned into a circle jerk.
the reason for that is because most peak oil types only focus on resource restraint... but, that's not the full definition of peak oil...
what is peak oil?
you get peak oil when you encounter a combination of extraction limits with peak demand, yielding a supply gap peak and resulting peak prices
the problem is peak oil types thought that extraction limits and high demand were constants, but as we're seeing proven they are not
when do oil prices peak?
when you get a supply/demand gap jump.. this is any combo of supply constraint and/or demand increase, plus (and here's the big one) if prices are manipulated
the Brent price index has been manipulated for years... we're seeing that being unwound by regulatory intervention right at the time that demand is falling while production has increased to take advantage of the manipulated price incentive... well, what else can happen than what we're witnessing right now... this should be no surprise to anyone, these moves have basically been telegraphed to the market since mid-2013 and now real observable market movement is in play...
peak oil isn't an end game, it's simply a max amplitude... yes, we'll run out of black gold eventually, but I would wager my children and theirs will still have oil available to them well after I shed this mortal coil...
Batteries die in cold climate weather, even with a climate controlled electric engine blankey feeding off a 900 amp battery.
Maybe Canada or Mexico should cut production.
I know, I know, that's Raycissssss.
Money from the central banks without the helicopters. I'm gonna take my 0.90/gal savings ($10 per week for me) and invest heavily in stawks right after I clean out WalMart for Xmas.
Happy days are here again!
Agree with post turtle saver (BTW, great work you're doing, saving those post turtles), the economy will boom with lower oil and gas prices. This has probably been planned a long time ago. The bullshit about marginal production from fraking keeps ringer ever more hollow. First, it was shale drillers will default at $80, then $70, now, it's $50.
The other day on CNBC, Kramer (the biggest asshat of all time) announced that the shale drillers won't default until oil hits $40. If that's the case - and, the number is probably lower for drills already in the ground - let's go for $30, which should get gas back to about $1.50/gallon or less.
There are already 17 states under $2.75 a gallon, so we're on our way. Average is about $2.84, so if oil is at $75 now, cut that in half, $37.50, and presto, average gallon of gas in the US is $1.42, and, no, it does not have to go back up. There's no law, physical or otherwise, that posits that prices must always rise.
Thanks to endless central bank meddling, the world's economies are deflating, and, with any luck, the governments will deflate as well, or die.
This is just the start of what should have happened in 2008-09. The past 6 years have been a complete farce, designed only to keep stocks up and the rich richer. The essential problem is that if the economy collapses, what happens to incomes and pensions?
Well, kids, they get cut, too. In the end, it should be a wash. If your average cost of living falls by 40%, you need 40% less money to live. Fuck the public pension plans with $100,000+++ retired cops and teachers. They'll be happy campers at $60+ with lower prices for everything.
Morons are everywhere, but most of them live and work in state and national capitols (DC and NYC have the highest percentages, for sure). Fuck them. Stop the consumer shit. Save, don't spend. Let everything drop in price. Deflation is wonderful so long as the government and economists GET THE FUCK OUT OF THE WAY.
FREE MARKETS 4-EV-A
Certain E&P costs decline with dropping oil prices. So yeah, the dath of frackers is exaggerated.
I don't think so.
I think it is a confusion about profitablity vice sustainability.
There is a range of production costs depending on the site, and the techniques used. So it is entirely accurate to say that some of them (believe it is actually most of them) become unprofitable at $80/bl, while others can produce at $60.
But if the financial 'profitability' point was the same thing as the 'fiscal default' point then Sears, GE, Chrysler, GM, Any AIrline in existence, and yes The Government of the United States, would have been dissolved decades ago.
They simply take the loss temporarily (except in the Government's case) while drawing the difference from other sources.
The oil companies have deep pockets. And the last few years of increased production at much higher prices have given them a cash cushion to handle flat CAPEX during times of reduced oil prices.
I guess that means ISIS will start moving into Saudi Arabia to begin rubblization.
even ISIS has no incentive to cut production in well areas they control... the same reason as the rest of them... they need the money...
Not sure how this constitutes "backfiring". Everybody but the U.S. oil industry wants OPEC to maintain production. State Dept. certainly wants oil production to stay high and prices to stay low. Favors the U.S. in every way.
Utter failure of foreign policy #9876 since 2008... brought to you by "The World's Smartest Man"®
and then Saudi said: "or maybe the U.S. should increase their demand. Oh wait, LOLLLL"
People at the pump will kinda love the Saudis.
last i heard cheap oil/gas is great for economy...you kow, reverse oil shock...hard to spin this one into a doom and gloomer
Send in the clowns.
If somebody accidently runs their D9 over a major oil pipeline in raghead land, would that cause the price of oil to go up ? And how hard
would that be to do ? Just askin......
Speaking of secret deals....
http://newworldorderg20.wordpress.com/2014/11/21/iran-firm-displays-us-made-robinson-helicopters/
http://newworldorderg20.wordpress.com/2014/11/16/corps-are-gearing-up-for-reduced-u-s-and-e-u-sanctions-on-iran/
http://newworldorderg20.wordpress.com/2014/11/16/mccain-helps-a-business-partner-of-iran-is-u-s-business-like-boeing-rethinking-iran/
http://newworldorderg20.wordpress.com/2014/11/11/boeing-back-to-business-in-iran/
http://newworldorderg20.wordpress.com/2014/11/23/germany-to-drop-probe-into-u-s-spying-on-merkel-of-course/
and more.....http://newworldorderg20.wordpress.com
A low oil price isn't going to fix struggling economies, it is a result.