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The Coming Oil Crash (Good News! Gas Prices Could go Down to $2 a Gallon by Autumn)
Foreign Policy ^ | JUNE 19, 2012 | Steve Levine

Posted on 06/20/2012 9:19:43 AM PDT by nickcarraway

My mom out in California is elated -- gasoline prices in her neighborhood are below $4 a gallon for the first time in four months. Less so are the world's petro-rulers, who are watching the price of oil -- their life blood -- plunge at a rate they have not experienced since the dreaded year 2008. Industry analysts are using phrases such as "devastation" and "severe strain" to describe what is next for the petro-states should prices plummet as low as some fear. No one is as yet forecasting a fresh round of Arab Spring-like regime implosions. But that's the nightmare scenario if you happen to run a petrocracy.

To understand why your average oil king is right to be worried at the moment, grab your calculator. The price of U.S.-traded oil fell to $83.27 a barrel on Monday, and global benchmark Brent crude to $96.05 a barrel; now juxtapose that against the state budgets of Iran, Russia, and Venezuela, which require more than $110-a-barrel Brent prices to break even, according to generally accepted estimates, and you'll see the problem.

Given this already-existing revenue gap, one might fairly wonder what would happen if, as Citigroup's Edward Morse says is possible, prices drop another $20 a barrel for an extended length of time. Oil economist Philip Verleger's forecast is even gloomier -- a plunge to $40 a barrel by November. Or finally, what Venezuelan Oil Minister Rafael Ramirez fears -- $35-a-barrel prices, near the lows last seen in 2008. In Russia, for instance, "$35 or $40, or even $60 a barrel, would be devastating fiscally," says Andrew Kuchins of the Center for Strategic and International Studies. That could damage the standing of President Vladimir Putin, since his "popularity and authority are closely correlated with economic growth," Kuchins told me in an

(Excerpt) Read more at foreignpolicy.com ...


TOPICS: Business/Economy; Extended News; Foreign Affairs; News/Current Events
KEYWORDS: 2012; 7dollargas7nov2012; bhofascism; bhofraud; bhogasprices; bushsfault; dictators; elections; gas; gasprices; howtostealanelection; manipulation; nobama2012; oil; oilspeculation
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1 posted on 06/20/2012 9:19:53 AM PDT by nickcarraway
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To: nickcarraway

I heard from the American people.....ahhhhh....They’re hurting and I wasn’t going to let that go on any longer. So....ahhhhhh..... I had o put my foot down and demand lower oil prices. I’m the president......ahhhhh....it’s my job to slap down big oil.

Guess who is going to say that.


2 posted on 06/20/2012 9:24:22 AM PDT by ryan71
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To: nickcarraway
Hail King Obama!
3 posted on 06/20/2012 9:24:41 AM PDT by DonkeyBonker
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To: nickcarraway

IF that happens, it will only enforce my beliefs that this administration has had the prices artificially high to try & stopp all cars.


4 posted on 06/20/2012 9:25:34 AM PDT by ridesthemiles
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To: ryan71

I will gladly pay $3.50 or more per gallon from now until November if it will help get BO fired.


5 posted on 06/20/2012 9:26:07 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: DonkeyBonker

This won’t save King Dip Stick!...His fate is sealed.


6 posted on 06/20/2012 9:27:35 AM PDT by AngelesCrestHighway
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To: nickcarraway

——if so, watch The One try to take credit-—


7 posted on 06/20/2012 9:27:52 AM PDT by rellimpank (--don't believe anything the media or government says about firearms or explosives--)
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To: DonkeyBonker

Hail King Obama! /sarcasm


8 posted on 06/20/2012 9:28:15 AM PDT by DonkeyBonker
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To: nickcarraway

Obama kept saying we couldn’t pump our way out of the problem of high gas prices, but it seems we are doing just that,in spite of him.


9 posted on 06/20/2012 9:28:21 AM PDT by Venturer
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To: nickcarraway
That man Obama just isn't doing his job. Oh but wait! There's an election coming.

It figures he'd keep is fat nose out of things to get the price of gas down. Watch it hit $6 a gallon within a year after his re-election.

10 posted on 06/20/2012 9:29:01 AM PDT by Bloody Sam Roberts (My dog, yes. My wife, maybe. My gun....NEVER!)
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To: Venturer

Yeah!...Obama said it was all about tire pressure!


11 posted on 06/20/2012 9:30:05 AM PDT by AngelesCrestHighway
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To: ryan71

We had a company attorney who always used to say that when you can hear the barking dog....it’s too late.


12 posted on 06/20/2012 9:33:41 AM PDT by sanjuanbob (Festina Lente)
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To: nickcarraway

The oil price was over cooked in 2008 when it was at $147 when it should have been in the 90’s. The oil price crashed with the crash of the economy in 2008 because of the decrease in demand. If you track the oil price ever since vs the Dow you will see that it tracks right with it. IMHO the only thing that will cause the oil price to crash down to really low levels will be a crash of the stock market.

Most of the new sources of oil that are coming on the market are a result of new technology’s that are very expensive and if oil prices sink too low drilling in these new fields will cease.


13 posted on 06/20/2012 9:41:37 AM PDT by Okieshooter
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To: nickcarraway

I read or heard on TV this is a BO/BS stunt for now to get votes for Nov. All bets are off after that.


14 posted on 06/20/2012 9:43:28 AM PDT by Gatún(CraigIsaMangoTreeLawyer)
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To: nickcarraway
The price of U.S.-traded oil fell to $83.27 a barrel on Monday, and global benchmark Brent crude to $96.05 a barrel; now juxtapose that against the state budgets of Iran, Russia , and Venezuela, which require more than $110-a-barrel Brent prices to break even, according to generally accepted estimates, and you'll see the problem.

Now you know why Obama begged Putin for some space/time, until after the election, to play ball. Obama, if re-elected, intends to make it administrative policy to boost oil prices.

15 posted on 06/20/2012 9:43:28 AM PDT by Go Gordon (It's barack hussein obama - because he doesn't believe in capitalism.)
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To: nickcarraway

Probably won’t happen. I can see $75ish but the cost of production is higher than the 20s.

In a panic of selling the futures may fall to the 40s but it won’t stay there.

Even Mexico has a growth rate of 4.5%. Yes, Europe and the U.S. are sucking wind right now and China seems to be poised to follow. The latter could cause a serious drop in prices.

Low prices, for the first time, are not a good thing. Low prices could help oblabla stay. To get rid of the POS I’d be happy if oil hit $200 but it won’t.

Markets are like the seasons in a way. Last summer was one of the two hottest and driest on record here in Texas. Records don’t happen very often and don’t last that long. Most things return to the norm or equilibrium when outside or artificial forces are removed.

Over the last 35 years we have endured many price crashes in oil and surfed the highs. Neither of the two events usually last very long (’86 to ‘94 was devastating, ‘98 was short lived and the reactions proved foolish, 2001 was imposed by external forces, 2008’s rapid increase was a panic and it did a lot to precipitate the Great and ongoing Recession) and people always panic and attempt to extrapolate the current point of events far into the future. They have always been wrong in the long haul.

If drilling in shale oil ends or slows much I believe production will fall pretty quickly. I believe I have more learned company in that view than there are those who think the declines in production from wells will be slow.


16 posted on 06/20/2012 9:43:58 AM PDT by Sequoyah101 (You've been screwed by your government.)
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To: Vigilanteman

Same goes for a high unemployment rate. I hate seeing people hurting and that includes family members, but if it gets the royal PITA out of the White House I’m good for awhile.


17 posted on 06/20/2012 9:46:48 AM PDT by madison10
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To: ryan71

The world economy is tanking.
Oil demand is headed down.
So in a way, Baraq has caused the price decline.
His economic policies are a disaster.


18 posted on 06/20/2012 9:49:49 AM PDT by nascarnation
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To: nickcarraway
Statement: "The Coming Oil Crash (Good News! Gas Prices Could go Down to $2 a Gallon by Autumn)"

Response: Abzolutely true.

Comment: A major point against "The Divine One" was the price of gas. Every potential voter had to face the price at the pump and that served as a reminder as to how inept the clown really is. So now he can crow as to how he lowered prices and the degenerate public will kneel in worship!

19 posted on 06/20/2012 9:59:55 AM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: nickcarraway

Well duh! It was artificially inflated to make Bush look bad and now that it is an election year, it is being depressed to aid the RATS.


20 posted on 06/20/2012 10:04:00 AM PDT by Jemian
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To: AngelesCrestHighway; Revolting cat!
Yeah!...Obama said it was all about tire pressure!

I got better mileage by removing unused gas station maps from my glove box.

21 posted on 06/20/2012 10:04:22 AM PDT by a fool in paradise (The media ignored the 40th anniversary of Bill Ayers' Pentagon bombing but not Watergate. Ask Why.)
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To: nickcarraway
Filled my Truck at $3.43 gallon diesel Filled my motorcycle at $3.21 for Reg Gas. this morning Here in Florida.
22 posted on 06/20/2012 10:04:31 AM PDT by bikerman (Obama lied,economy died.)
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To: nickcarraway
Careful what you wish for. The last time oil prices fell, payback was . . .well, watch this revealing video:

Kevin Freeman Economic Terrorism

Explores the 2008 market collapse with the electronic draw down on money market accounts as just one recent act in several acts of economic terrorism. That it took place on the seventh anniversary of 9/11 is no coincidence.

When most of us think of acts of terrorism we imagine car bombs or hijacked airliners. Kevin Freeman compels us to think again. He explores the dimly understood world of financial terrorism that ultimately underwrites the steady progress of jihad against America and its allies.

23 posted on 06/20/2012 10:05:47 AM PDT by wtd
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To: nickcarraway

Oh s##t. I hate having to pull for high gas prices until November but whatever it takes to get Barry the bastard out is fine by me.


24 posted on 06/20/2012 10:07:09 AM PDT by Marathoner (If the choice was Obama vs. Satan I'd have to flip a coin.)
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To: nickcarraway; All

If we do see $2.00 dollar a gallon gasoline, I’m going to enjoy watching an awful lot of people apologize to Representative Michele Bachmann.

“Oh we’ll never see $2.00 dollar a gallon gasoline again.”

“Why she’s just an idiot. She can’t lower gas prices. It’ll never happen.”

“I used to back her, but this preposterous claim is the last straw!”


25 posted on 06/20/2012 10:08:23 AM PDT by DoughtyOne (Republicanism: Y1 Rant Y2 Rant Y3 Rant Y4, Oh nevermind, vote for him anyway. Rinse & Repeat!)
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To: Sequoyah101
To get rid of the POS I’d be happy if oil hit $200 but it won’t.

Warren Buffet lost a billion dollars speculating on the price of oil in 2008 (running it up while Boosh was President).

He won't do that to his pal Barack Obama.

26 posted on 06/20/2012 10:09:11 AM PDT by a fool in paradise (The media ignored the 40th anniversary of Bill Ayers' Pentagon bombing but not Watergate. Ask Why.)
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To: ridesthemiles
IF that happens, it will only enforce my beliefs that this administration has had the prices artificially high to try & stop all cars.

Yep, and we can remind everyone of that factoid...

I've been putting this sticker on gas pumps:

"Somehow we have to figure
out how to boost the price of
gasoline to the [$8-$10/gal]
levels in Europe." - Barack Obama's
Energy Secretary Steve Chu. Had enough yet???

I've sized mine to fit twelve to a sheet of bumper sticker stock...
27 posted on 06/20/2012 10:10:58 AM PDT by null and void (Day 1247 of our ObamaVacation from reality - Obama is not a Big Brother [he's a Big Sissy...])
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To: Go Gordon

Iran and Russia have been pissing off the Saudis by intervening on Assad’s side in Syria. This may be the Arabs firing a warning shot in their direction.


28 posted on 06/20/2012 10:12:24 AM PDT by PapaBear3625 (If I can't be persuasive, I at least hope to be fun.)
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To: nickcarraway

“My mom out in California is elated”

...I hope that “elation” doesn’t translate into votes from others for the kenyan. Gas was less than $2.00 when he stole office.


29 posted on 06/20/2012 10:15:08 AM PDT by albie
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To: DoughtyOne

Thanks, I was hoping someone would notice.


30 posted on 06/20/2012 10:24:22 AM PDT by Balding_Eagle (Liberals, at their core, are aggressive & dangerous to everyone around them,)
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To: Balding_Eagle

You bet...


31 posted on 06/20/2012 10:28:38 AM PDT by DoughtyOne (Republicanism: Y1 Rant Y2 Rant Y3 Rant Y4, Oh nevermind, vote for him anyway. Rinse & Repeat!)
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To: nickcarraway

“Dry land is not just our destination, it is our destiny!” —”Deacon,” “Waterworld”


32 posted on 06/20/2012 10:32:06 AM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: DoughtyOne

We need six dollar oil in November to get rid of Obama


33 posted on 06/20/2012 10:32:06 AM PDT by Hojczyk
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To: Hojczyk

If the Feds do QE 3 oil will go back up to 100 dollars a barrel


34 posted on 06/20/2012 10:34:21 AM PDT by Hojczyk
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To: Hojczyk

Perhaps so.

I’m not sure $0.10 cent a gallon gas could save his ass now.

This guy is finally being seen as the empty unraveling suit that he is.


35 posted on 06/20/2012 10:37:43 AM PDT by DoughtyOne (Republicanism: Y1 Rant Y2 Rant Y3 Rant Y4, Oh nevermind, vote for him anyway. Rinse & Repeat!)
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To: Vigilanteman

I’ll up the bid to $4.50


36 posted on 06/20/2012 10:40:00 AM PDT by Balding_Eagle (Liberals, at their core, are aggressive & dangerous to everyone around them,)
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To: nickcarraway

If oil goes down that much, production will be shut down and dismantled. Bonds may shoot up initially, but general bond collapse will follow. TEOTWAWKI will have arrived.


37 posted on 06/20/2012 10:41:40 AM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: ryan71

The underlying issue here is not just lowering gas prices, but what they represent. The prices are lower because the world economy is slowing down. The faster the price falls, the faster the world is slowing down.
Given the choice, Obama would much rather have higher gas prices and stronger economic growth, than lower prices and a failing economy at election time.

This is not good news for Obama.


38 posted on 06/20/2012 10:42:11 AM PDT by WILLIALAL
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To: DoughtyOne
If we do see $2.00 dollar a gallon gasoline, I’m going to enjoy watching an awful lot of people apologize to Representative Michele Bachmann.

Good point! But before we apologize to her we need to apologize to Newt at $2.50.

39 posted on 06/20/2012 10:43:13 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: a fool in paradise

Nope, you are correct.

The price panic of 2008 was artificial. Many of us were looking at stocks and consumption and saying all along, “This is contrived somehow.”

I think all of the mess of 2008 may have been contrived. The Depression we are in now may be as well. If it is not oblabla and his ilk have let the genie out of the bottle and can’t figure out how to stuff it back in. Actually, I don’t think they want to.


40 posted on 06/20/2012 10:46:06 AM PDT by Sequoyah101 (You've been screwed by your government.)
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To: Hojczyk

Pardon my ignorance friend but what is “QE3”? Thanks in advance for any reply, It will be appreciated.


41 posted on 06/20/2012 10:54:44 AM PDT by JerseyDvl (Cogito Ergo Doleo Soetoro, ABO and of course FUBO!)
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To: Sequoyah101

If drilling in shale oil ends or slows much I believe production will fall pretty quickly. I believe I have more learned company in that view than there are those who think the declines in production from wells will be slow.
..............
Production of shale oil will rise significantly in the next couple years not just because of the rise in production in the Baaken field — but because a half dozen other big shale oil fields and maybe a dozen minor shale oil fields are going to be coming on stream.

The is a secular change in oil production


42 posted on 06/20/2012 11:04:46 AM PDT by ckilmer
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To: JerseyDvl
QE3 would be a third round of “quantitative easing.” This a mechanism for the Fed to inject money into the economy by through banks. The result is inflation in world commodity prices like oil. wiki’s description is OK.
43 posted on 06/20/2012 11:11:31 AM PDT by DrDavid (George Orwell was an optimist.)
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To: ckilmer

This is not my point.

Have a happy day.


44 posted on 06/20/2012 11:13:53 AM PDT by Sequoyah101 (You've been screwed by your government.)
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To: ridesthemiles

I wonder if it isn’t the opposite:

‘bams friends are dropping the price to lower the misery index here. Less misery=less voter dissatisfaction.

After the election it will go up, just like the last one.


45 posted on 06/20/2012 11:19:25 AM PDT by tsomer
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To: Jemian
It was artificially inflated to make Bush look bad and now that it is an election year, it is being depressed to aid the RATS.

Gas prices fell in plenty of time for the election, but the financial industry collapse took over the headlines that September.

46 posted on 06/20/2012 11:20:43 AM PDT by Constitutionalist Conservative (I'm a constitutionalist, not a libertarian. Huge difference.)
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To: JerseyDvl
Here is a good explanation of quantitative easing, heh:

http://www.youtube.com/watch?v=PTUY16CkS-k
47 posted on 06/20/2012 11:24:12 AM PDT by fr_freak
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To: nickcarraway

This isn’t all good news.

First of all, it means the recession is much worse than reported.
Second, a crash in commodities will smash a lot of people. Farmers, workers in North Dakota, etc. will be out of work.

There is a HUGE commodity bubble. When it bursts, I don’t know of any more safe harbors. The PTB will be forced to admit we are in a deep recession.


48 posted on 06/20/2012 12:02:40 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: nickcarraway
BTW, much lower oil is not likely. The Fed is inflating the dollar now, and sending it lower. The political/regulator class must be paid more debt by big government over the next few months (incl. services with government customers).

Fed Extends TWIST Through End Of 2012, Prepared To Take Further Action, Market Unhappy
http://www.freerepublic.com/focus/f-bloggers/2897402/posts


49 posted on 06/20/2012 12:03:49 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: nickcarraway

I’ll pay extra through Decemeber if it gets Obama out of office.

Actually, here in the Alaska bush we’re paying $6.40 a gallon. Don’t expect the price to drop any until the next barge load of fuel.


50 posted on 06/20/2012 12:04:19 PM PDT by hattend (Firearms and ammunition...the only growing industries under the Obama regime.)
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