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 ...
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.
IF that happens, it will only enforce my beliefs that this administration has had the prices artificially high to try & stopp all cars.
I will gladly pay $3.50 or more per gallon from now until November if it will help get BO fired.
This won’t save King Dip Stick!...His fate is sealed.
——if so, watch The One try to take credit-—
Hail King Obama! /sarcasm
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.
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.
Yeah!...Obama said it was all about tire pressure!
We had a company attorney who always used to say that when you can hear the barking dog....it’s too late.
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.
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.
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.
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.
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.
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.
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!
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.
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