Posted on 01/27/2015 7:04:25 AM PST by rktman
This^^^
And that has been my contention for the past 6 years as well. So in the most fundamental sense, when Conservatives yelled "Drill, baby, drill" that was the correct response. Recall also that Liberals roundly mocked Conservatives for saying this... and now they share the benefits from this action.
With a tariff and a 100% domestic supply(big assumption) we would pay whatever the cost of getting out of the ground plus refining, piping and retail. Somehwere around 50 per bbl.
Didn’t the “bootleg” oil sold by ISIS influence the price and supply of oil on the world market? When you steal the oil and sell it at discount on the world market it’s going to drive prices down.
OPEC has lost some of its control of the world market supply and are now trying to figure out how to limit oil inventories and get the price back up while still pumping and selling enough oil to maintain their economy and pay their bills.
Oil exporting countries with fixed production costs above current market prices will be suffering economic hardships as their income from oil exports decline. In the meantime not many will continue to drill for new oil or increase production. OTH, countries which import oil will enjoy a temporary economic windfall because of the lower prices.
Everyone who is in the “oil bidness” knows when to hunker down until things start to improve. There will be a loss of high paying jobs in the oil patch and other side effects negative to the economy until an equilibrium between prices and inventories are restored. World War III anyone?
I don’t think that it’s a big assumption that the USA can supply it’s own domestic demand for oil ... because the USA was already on its way to being the largest oil exporter in the world (I already posted many articles on that) ... UNTIL ... Saudi Arabia decided to “crash the party” with oil so cheap that it bankrupts American producers.
Oh ... one more thing ... don’t forget to include a SIZEABLE PROFIT to that equation, as these companies are in this business for profits, and not merely to cover costs ... :-) ...
Here’s the thing about that ... fracking NEEDS higher priced oil, and certainly higher than it is now!
Falling Oil Price slows US Fracking
http://oil-price.net/en/articles/falling-oil-price-slows-us-fracking.php
The following report http://www.eia.gov/analysis/studies/worldshalegas/pdf/overview.pdf shows worldwide estimates of shale oil and gas reserves that are technically recoverable. They are scattered all over the world, except the middle east, notably including China and Russia. The total is some 345 billion barrels of oil plus 7,299 trillion cubic feet of natural gas. Suggest you look at the map on page 5 of the report.
The Saudi’s probably are more concerned about development of this vast reserve, based on US technology, than they are about just US shale oil production.
HELLO Star Traveler;
There is nuclear, coal, wind, gas, solar, geothermal, pulp, hydro,...............
What’s wrong with oil production - let’s drive the Saudis out of the market.
Most definitely.
Although it's important to note that it is cheap for Saudi Arabia to pump oil at maybe $10 a bbl.
More importantantly is that oil is a state run business. Or maybe a better way to put it is that Saudi Arabia is an oil run state.
Over 60% of SA's GDP comes from oil.
SA has a fairly substantial welfare system and governmental system. Their government NEEDS oil at over $80 bbl to survive.
Secondly, SA needs to be careful who they pi$$ off. Just as SA has a huge % of their GDP from oil, so does Russia. Putin is a dangerous person to pi$$ off. He has more "resources" at his disposal to "influence" people and regions.
My personal feelings about the price of oil, is that we will see SA start to cut back production within the next 6 months.
Well ... unfortunately ... Saudi Arabia is running our American producers out of business. Fracking can’t exist in this current price range, which is where our recent dramatic increase in domestic oil production comes from.
I expect that oil producers will find ways to cut costs to once again become price competitive. Then then the US will be again quite competitive with the countries with the developed oil fields. We have more oil in the ground than was ever imagined.
Is that going to help the bankruptcies with various oil producers in the next few months to a year?
There has been plenty of other business that have gone under because of their lack of ability to compete with foreign imports.
I'm just curious of your opinion.
I said up above ...
Some posters here on Free Republic have said that what Saudi Arabia is doing is trying to destroy many of our oil producers here in the USA and permanently damage the oil industry here. I suggested this very thing
NOW ... if you’re one of those FReepers that I spoke about (and who think this is an act of war), that is my suggestion. If you’re not, then you can ignore it ... :-) ...
Back down to $45 and change.
May he rust in pieces.
Why?
I firmly believe oil is produced by the oceans at a rate we could never keep up with. The dead plankton etc constantly falls to the bottom and turns to ooze. In many cases it travels underground via caverns or porous strata to potential well sites onshore.
We just need new and better methods of discovering and extracting it from inner space.
I’ve heard it both ways and I’m not convinced either way ... but whichever way it is ... if you want to REMOVE those countries from their EXCESSIVE INFLUENCE upon the world (along with their despicable ideology) ... then another form of energy to replace oil is going to be required.
Yeah, meet their crony capitalism with our own.
All government price supports must be resisted.
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