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WTI Hits $45 Handle After Treasury Secretary Lew Says "Doesn't Expect US Crude Production To Decline"
Keeping the narrative dream alive, Treasury Secretary Lew told Bloomberg TV this morning that "lower energy prices are good for the US economy" - seemingly missing the huge surge in jobless claims, the lack of clear gains by firms on lower fuel costs, rig count collapsing, and homebuilder concerns in Shale states. But it was his follow up idiocy that sparked weakness:
- *LEW SAYS HE DOESN'T EXPECT OIL PRODUCTION IN U.S. TO DECLINE
- *LEW SAYS U.S. CRUDE PRODUCERS CAN HANDLE DECLINE IN OIL PRICES
The reaction - WTI broke quickly to a $45 handle on heavy volume. Perhaps Secretary Lew should tell the firms that are laying off 1000s how to do their jobs if he is so sure that "they can handle it."
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One word, delusional.
correct me if i'm wrong but wasn't lew's grandfather the one who proclaimed the titanic was unsinkable?
But the BIG problem now is where to store all of this oil !!?
Duh!
So demand is falling, supply is increasing, and we are all wondering why prices are falling?
I stick by my $35 handle. Who wants $0.99 gas again?
Aren't you German? [correct me if I'm wrong on this]
American in Germany.
Well then it sucks that you'll be paying for your gasoline in Euros.
I also can drive as quickly as I want without having to worry about some asshole cop in the bushes pulling me over and writing a $250 ticket for 10 MPH too fast.
EDIT - Just you wait for Yellen to turn on the printer again.
Ain't done 'till it hits $40... And you can take that to the bank!
Lew says Santa Claus is real and will succeed the recently departed monarch
@Haus - I have no doubt about Yellen turning on the printer [again]
Quite frankly, I'm fairly sure that [what was the number again '60B'?] that Draghi threw out there wasn't subsidized to any degree which you choose to nominate.
My 'bleacher seats' guess is that EUR:USD will barrel thru, then revert back to parity [the 'barrel thru' part only because, some thieves will make it a business to wreck other weaker hands in the process].
At that point, & or whereby some other potential basket currency might be brought into the virtual parity fold. The REAL printing games will begin.
IMO ~ Crude is 'ancillary' to all of this [in the process]. Some will experience what seems to be 'windfalls' in the process. Others, not so much.
I think that with Abenomics, ECB printfest, and the Chinese peg, the USD has to print with wreckless abandon.
Maybe a 120-150 billion a month would get the economy going?
/sarc
Footnote: On the subject of 'Americans living abroad' [& the relative merits & annoyances thereto], I lived in Europe for 12 years, so I'm well aware of the pros & cons.
on this:
"Maybe a 120-150 billion a month would get the economy going?"
I kno it was /s
But, assuming all the secret 'handshakes' are completed & fiat currencies are relatively balanced, the NEXT QE will be designed to purposefully DESTROY 'the economy'.
All that's really happening right now is that secret gold stashes are being rebalanced.
Meh --
I am not sure the goal is to destroy the US economy. I think they want it to collapse, but not destroy it. The difference is one is temporary the other is permanent.
The US, regrettably is the new USSR. Most Americans just don't know it yet.
Actually, the goal all along is to collapse the world economy, thus allowing a one world currency to arise from it's ashes... I'm speaking the truth here. Those directing this game have learned much from history. Same game, bigger board.
I understand that is what they want but it seems as though we are watching the mini-test run (Euro) collapse in real time thus proving it's impossible.
That's what they want but then we'd all be equal and Americans, Canucks sort of, couldn't have everything for nothing. Then we'd go apeshit.
"Actually, the goal all along is to collapse the world economy"
No it's not... Let me put it another way...
If all the incremental recipients of debt could find a way to keep the world economy chugging along and still collect their 'juice', they'd do it. The problem is that they CAN'T [because there are new players at the table and ALL OF THEM, old & new, are greedy assholes].
Collapsing the world economy is just a poison pill. It's akin to the owner of the ball and bat telling everyone else that he's going home if they don't play the game according to 'HIS' rules.
They're all FOS.
Junks or no junks, I stick to my original story. Behind the scenes gold [as well as chairs] is being shuffled around. When the music stops, some CHAIRS will be missing, and the gold allocation will have been more or less agreed upon. Then all the various planetary warlords can get on with a new round of fiat games.
You are correct. Each government/politician/banker is working to save theirself. However, the crash when it comes, will result in a one world currency made of a basket of currencies as the answer. Which entity gets to run this new currency is likely to be the IMF. The IMF is privately controlled and is not audited.
"Supply and demand... what's that?" ~Lew
Contemporary personnel management theory - If you need four full-time, skilled employees to do a job, one affirmative-action selection and two part-timers without benefits will do an even better job.
Gas may start falling again soon, but yesterday it was UP 15 cents here in Dallas.
Well, at least we finally got an expert's opinion on the subject!
Now that that's settled...
This 'expert' KNOWS that:
- When you cut the gasoline price in half
- & whereby, all the various 'tax revenues' that are collected in the sale of gallon(s) of gas are compiled
- & whereby [high paying] jobs are lost [& whereby 'income tax' is lost from that labor]
- & whereby, following the foodchain downwards, the economies [& therefore potential tax revenues] generated from those economies are lost
Well ~ He's the TREASURY SECRETARY [aka: dude who is responsible for collecting all these revenues]
I guess I shoulda gone to Harvard.
I just believe the opposite of what these f*ckers say anymore.
The bottom line is that this is all just 'CODE' for saying.
"Meh ~ Don't worry about anything because when TSHTF, there's a printing press whereby all 'losses' will be monetized and put on the tab. Your grandchildren will have to worry about this, not you"
& oh by the way, tell them that they'll be on the hook for MY grandkids $666,000 hot dog in DAVOS as well.
''The future cannot repay today's debts.''--trav7777
Catchy [& from a ZH ghost that I have great respect for].
But, the reality is probably more [metaphorically speaking], like the movie IN TIME.
The FUTURE has nothing to do with anything. All that matters are 'debts', 'slaves', & incentive. Keeping that system alive [or extinguishing it] is all that matters. It'll either happen or it won't. The FUTURE is only the arena whereby that outcome will be revealed.
At that point, the joke will undoubtedly be on everyone because the same carousel will simply start again.
I feel better already.
Make that one word 'criminal' and you may be getting close.
the power structure seems dead set on crashing oil. the joblessness it creates is just an added bonus. that is where they want all americans: helplessly begging from the generous hands of their masters.
retaliation against the repubs since most of their wealth comes from oil? just a thought, TPTB could be ensuring the sheep in 2016 will be total anti-red and how "they" were able to bring down energy costs.
longshot?
look guys, IT'S NOT GOING TO DECLINE... ANYWHERE
there have been more goddamned oil stories on here than I can shake a stick at, but dammit I said months ago that not a one of these producers is going to slow down or stop pumping / fracking / whateverthefuck... not a one of them... they all need the money, every last one, they get it by selling oil, they're not going to stop selling it so someone else takes away their business, so out of the ground it's going to come...
it absolutely, positively, will not stop... quit checking on this shit every fucking day, it's not worth it and NO DAILY ACTION is going to save you from this fundamental fact... they will pump and produce because they have no choice... too much product, not enough demand, down goes price, end of story
The only thing that would stop them is lack of buyers. I agree, as long as buyers are there, they will keep selling since they are all so heavily debt ridden. A big looming issue maybe storage. There is only so much available.
"it absolutely, positively, will not stop..."
It doesn't feel pain or remorse or pity....
It's the Oil Terminator. My assistant is wondering why I'm laughing at my desk right now.
I enjoy your posts. I wonder what part of "rig count" it is that he doesn't understand ? Probably the part with the number, I suppose. I'e heard they have trouble with numbers.
hmmm..... I wonder what will happen when they can't pump fast enough to service their debt...
Don't worry...next step FED buys fracking bonds...and loans...and gives zero % finance to the surviving few...
This post is 1/2 truth and 1/2 idiocy. The truth is "too much product, not enough demand, down goes price..." The idiocy is "not a one of these producers is going to slow down or stop pumping/fracking..."
The two things are not mutually exclusive. Producers can slow down supply while still exceeding demand and thus still lower the price. It is a fact that fewer wells are being drilled and that fewer are being completed. Just because you don't see it this very instant does not mean it isn't happening. Rigs are being stacked, wells are being chocked back, and completion crews are being sent home. Yes, there is a mountain of debt that needs to be supported but people still find it difficult in this industry to throw money at negative ROI projects. Obviously, some desperate companies will do exactly that, but the rest of us are just circling; waiting to pick over their dead bodies. Same as it ever was.
(I didn't down-vote you, but if there was a sideways arrow you would have gotten it)
Picking over the corpses is already happening here where the E component of E&P is ridiculously cheap, the P component very high and the average operator not savvy, not well-funded and not at all connected. The bankruptcies are beginning to come in numbers sufficient to affect the spread between local price and Cushing WTI (~25% compression across the spectrum of buyers over the past couple of months if you're playing along at home) as regional refiners accustomed to buying price-advantaged local crude compete for dwindling local supply. I'd give it 6 months before M&A activity in names anyone here would recognize really gets rolling and maybe another 6 - 12 to peak carnage but it'll be game on not long after that.
So then, you're living on this planet where oil goes on forever...........Fracking notwithstanding there will effectively be no oil by c. 2030 - this is not my guess - this is what the industry has calculated. For lots of reasons the oil is best left in the ground: pump it out now and you have storage issues and costs; leave it in the ground for now and the return on pumping at a later date is enormous even allowing for er, inflation. Employment as most of us have understood and experienced it is a thing of the past: since the 70's we've been filling up vast acreages with cars no one is buying/can afford. We have reached the stage where even built in obsolescence can't cope with the surfeit of goods of every sort, which very few people actually need. Unemployment is the benign effect of this surfeit, because quite aside from the sheeople/couch potatoes, there will be some, who relieved of a life on the spanners etc, willutilise their free time to come up with useful ideas. Something that's a bit thin on the ground here: most of you are still fighting WW2 in terms of economic theory.
A few more words: what the heck does this guy know about the oil business?
Amazing, is it not. You couldn't make this stuff up.
I dunno. I feel like there is some sort of cognitive disconnect between drilling new wells and continuing to pump oil out of existing wells.
This lying ignoramus just like the liar in chief fudgepacker are delusional...
He's reading from the ZWO script.
Yes, Lew Jacked.
LEW YOU STUPID FUCKING CUNT!!!!
Also known as a Federal Employee.
Back of the napkin calculation on lost tax revenue (feel free to adjust estimates below for your own napkins):
50,000 jobs lost
times
$100,000 average per year salary
times
25% effective taxes
equals
$1.25B in lost tax revenue
This doesn't take into account the increase in spending in the form of transfer payments (unemployment insurance, food stamps, disability, etc.), which increases the hole even further (less revenue, faster spending).
Please, "taxes" are irrelevant once you commit to direct monetization.
Touche.
& to think you forgot to factor in the tax revenue loss from a lower fuel price as well [see above]
"$1.25B in lost tax revenue"
Fucking shrapnel. They'll be paying that for a hot dog in Davos next year.
dont forget tax on oil products
he needs a baghdad bob hat
Euro, Greece, Russia, China, Oil, MCD, UPS, DXY, Obama, Lew, Gold and Silver. Yup, really, really going to need a much larger bowl of popcorn and a giant drink to go with it. Hope all here already have a seat.
Solid gold lounger,with silver footstool.
AHAHAHAHA! Are you kidding me? Now I know Obama's oil boomarang is worse than I thought. These idiots blew their dam legs off.
The Treasury Secretary is an expert in US oil production?
Swiss SNB says inks pact for renminbi clearing with PBOC
Whoops. That;s newsworthy. Hmm. this shit is gettin real.
Let's see; drop the Euro; pick up the Renminbi; ? Yeah, that must mean something. If only I could figure out what it was. I guess I better ask Bruce.
"Manufacturers PMI lowest for 12 months" hmm. very suspicious.
"In a long enough financial crisis the civilian employment rate drops to zero"
I am reading the headlines from Lew's statements now. Lew is delusional on all fronts. This level of denial he is exhibiting is actually pretty scary. No one can be this stupid. It must be serious if it takes this amount of lying. Well. You can write off anything this guy says from now on.
Gov-Co could simply pass an executive order to force the producers to keep working even if they're losing money.
You're hired ! That;s the kind of new wave, out of the box, thinking we need in the new normal government. Congratulations !
look guys, IT'S NOT GOING TO DECLINE... ANYWHERE
there have been more goddamned oil stories on here than I can shake a stick at, but dammit I said months ago that not a one of these producers is going to slow down or stop pumping / fracking / whateverthefuck... not a one of them... they all need the money, every last one, they get it by selling oil, they're not going to stop selling it so someone else takes away their business, so out of the ground it's going to come...
it absolutely, positively, will not stop... quit checking on this shit every fucking day, it's not worth it and NO DAILY ACTION is going to save you from this fundamental fact... they will pump and produce because they have no choice... too much product, not enough demand, down goes price, end of story
And may I ask where is said oil going to go ?
I am no economist but if you have 2000 employee's that were working when oil was $90 and now that "product " (oil) is 50% less do you continue to pay for 2000 people when your "product" sells for 50% less?
Check the Baker Hughes rig count they are dropping by 75-100 production units a week. How in the heck does production stay static when you slam down the production units? You are as clueless as they come. As far as Lew and his ilk go I am now pretty convinced the Gubmint is playing the Paper Oil game and has fully corrupted the EIA with padding the statistics of oil inventories in desperation to improve consumer spending via cheap oil The only caveat I would have for that is the economy is crashing so fast that demand is cliff diving.
A close buddy that supports the drilling industry here in Kansas sez its hitting crisis levels. Yes they keep pumping and producers had hedges to protect their sales for a few months. His prediction is that from now on new drilling is crashing and the effects especially on smal towns throught the regions will be hard hitting. Add that to another drought impacted wheat crop and it could be double ugly. Now wheat crop has plenty of time to recover with precip but precip continues to be below normal......
This just proves that the White House and Saudis are in bed together - and that the real target is Russia - and Obama is willing to throw shale producers under the bus.
Like he has been a big supporter of the US oil industry...
he once posted a picture of a ups truck from his office, stating that the white part of the roof was put there to reflect the sun's energy (thereby reducing greenhouse effect).
I am pretty sure the ups trucks have white translucent tops just so that the driver can see in the otherwise dark truck , and find the packages for delivery
Wow; that's tragic. Clowns to the right of me, etc. etc. 'Our Leaders" . Whoopee. They're like MAD comic book characters. Meanwhile our Thelma and Louise Economy roars on towards--?
Lew must be short oil and oil stocks.
If you want your US oil production, you can keep your US oil production. Period.
In a perfectly socialized society he could make it so. Regardless of the pricing, the government owned industry would produce based on policy. Markets, we no need no stinkin markets.
going by the secretary, deputy sec, and all 3 undersecs - Treasury certainly does not Lack Jew...
eh?
Eh??
[take a joke, fellas]
*LEW SAYS HE DOESN'T EXPECT OIL PRODUCTION IN U.S. TO DECLINE
*LEW SAYS U.S. CRUDE PRODUCERS CAN HANDLE DECLINE IN OIL PRICES
So Lew is hoping that with Russia's announcement in Davo's today that they will cut production to some of their oil projects which will open the floodgates to purchases from abroad for American oil...
Did somebody tell him about the new payment system and energy purchases from that Asian economy that now just happens to be the biggest market in the World?!!!
Jack Lew. Definition of an insane lunatic at the helm that wants WWIII when he discovers those new trading partners he helped push together with a coup won't be in the slightest deterred in pursuing there own business objectives!
And that's all we need to know!
The frackers can't stop producing at a loss because they owe the banks too much money to stop. I'm being serious.
"We can't stop! We have to slow down first!"
This has happened before and we got through it just fine. This is just another focus on the less important to get us to ignore other things kind of ploy. Lower prices are good for everyone but oligarchs. The unemployed oil workers will get other jobs. The numbers are actually small in comparison to the total unemployed and very small in comparison to the underemployed. It won't help the economy but it can't hurt the economy since we haven't had a real economy for years.
I still continue to buy puts on OAS. One shale that will be going bankrupt.