Just need to make more cars and sell some of out refined crude to our stab-in-the back Euro weenies.
Calling Caracas? Anyone? Anyone? Maduro?
Demand for oil and almost all commodities is sluggish because contrary to Government proclamations the economy is simply not robust. If it were demand and consumption would be an upward pressure on prices. The Saudis would love to see these prolonged low prices diminish production and investment in shale oil extraction. However the Saudis are subsidizing Egypt and other Muslim countries. They will produce whatever volume of oil necessary to maintain their net income. Very good for consumers and ultimately a boost to the economy.
BOOM GOES FRACKERS, BOOM GOES HIGH YIELD DEBT, JUNK BONDS IMPLODE< BUST GOES THE ECONOMY, AND THERE GOES THOSE FREAKIN TOO BIG TO FAIL BANKS AGAIN, JUST LIKE IN 2008 — PLUS VENEZUELA, RUSSIA, AND THE NORTH SEA ALL SWIRLING AROUND THE TOILET BOWL. Gold cratering, all currencies weakening, silver weakening, China slowing and moving all $ not nailed down to US apartments and hotels.
Saudi Arabia is blowing the tail off their own airplane. Brilliant!
Interesting deja-vu all over again article here: http://theeconomiccollapseblog.com/archives/guess-happened-last-time-price-oil-crashed-like
“Saudis will not be making friends by this action in the middle east.”
Personally, given their direct involvement in 9/11, I’d consider it just repayment having all those “fat freddies” in the House of Saud swinging from a gallows rope. Ditto for the “leaders” of the Trucial States as well.
And, by extension, the rest of the middle east.
When this last happened at the height of the cold war in 1985, it followed a visit by then Vice President George H. W. Bush to Saudi Arabia. Bush convinced the Saudi royal family it was in their best interest to reduce the price of crude oil to regain market share. As a beneficial side effect, Russia would lose a major source of foreign exchange. This followed a major investment by Russia in radar capability, which was largely negated by the publicity of the US then recently developed stealth technology. With reduced foreign exchange, Russia was unable to replicate the stealth technology and the Soviet Union failed. Unfortunately, the economies of the oil producing states, Texas among the most extreme example, were crippled.
This time around, Obama has visited Saudi Arabia twice this year, Bidden has called the Saudi royal family once and the UAE twice. This time it appears the primary objective is to cripple the oil producing states economies, principally Texas, which has been a thorn in Obama’s side. The beneficial side effects of reducing Russia’s foreign exchange, increasing Saudi market share, and reducing the foreign exchange of Iran, along with the positive effect on the economies of states more aligned with Obama, are perhaps just that, side effects.
By the way, crude prices dropped from a intra day high of about $32 in 1985 to a intra day low of $8 in 1986. That is a 75% drop. Prices did not return to $32 on a sustained basis until 2003.
Russia not going to like cheap oil?