Not gonna happen.
Gasoline price per gallon will persist above $3 for at least a couple of years, just long enough to put the Pubbies back in control of both houses of Congress and the White House; that will be engineered by the House of Saud, which is ironic, because the House of Saud would appear at first glance to be the ones to suffer most from a decline in oil prices. The fact is, the Saudis can survive and even thrive when other OPEC members are drowning in red ink, and the House of Saud doesn’t want Iran to get rich.
Obama, on the other hand, DOES, and has been sitting on the Keystone XL project for five solid years because of that, and to keep the late Hugo Chavez and his dictatorship from going down the drain. The Venezuelan dictatorship is allied with Iran (and Russia, and Cuba — begin to see a pattern?).
Obama’s flip on the Ukraine crisis will be breathtaking, and yes, it will happen. He did the same thing in Syria, in Libya, in Iraq, in Afghanistan, and even in GTMO. This is probably inevitable, since Russia can count on the, ahem, cooperation of the EU, reliant as it is on Russian natural gas.
OPEC started de facto pricing in Euros around ten years ago, to keep their product price-stable in Europe during economic integration into a large, single market, and of course at the expense of the Russians, and regardless of what it did to the US economy.
Russia’s been concentrating on natural gas markets in Europe, and has been for decades, while ignoring technological developments which would keep it competitive and profitable in liquid petroleum. That will change.
When the Saudis turn on the Demagogic Party and their rival in OPEC, you’ll notice. And so will the Europeans. Instead of opening their own spigots wider, they’ll push into office a group of politicians who are drill-drill-drill oriented.
US natural gas production is through the roof, oil production continues to rise, and right now we have *one hand tied behind our backs* — when Keystone XL is finally okayed and built, we’ll enjoy a rise in supply.
Once ANWR is opened we’ll be about eight years away from a real oil glut, and that’s give or take various developments in use reduction, conservation, and improvements in recovery technology by the producers, and additional exploration.
With fewer US dollars going overseas to buy oil, the Euro will decline against the dollar; China’s export surplus will decline but we’ll be getting much more for our money, and the Chinese will back down from buying our debt; Russia will have incentive to push up oil production for the EU markets, because the de facto pricing will mean Europe will be paying more and more for oil.
The Russian alliance with Iran can’t and won’t survive that.
http://www.freerepublic.com/%5E/focus/news/2436271/posts?page=164#164
http://www.freerepublic.com/focus/news/1071087/posts
“” “Somewhere in the next couple of months the price advance in crude will probably have maxed out for this business cycle,” he says.””
I think there’s a simpler explanation. imho the price of oil is set worldwide while the price of natural gas is set locally. the world wide demand for oil is rising pretty steadily as more and more people enter the middle class and get cars. that’s not going to stop. meanwhile most of the world’s oil fields are old. they can barely keep up with their declines. only Iraq outside of the USA and canada is getting a big bump in production to keep up with world wide demand. while the USA is enjoying a fracking boom—it will be five years or more before other countries master the technology and bring enough volume to market to make a difference. imho the only thing USA rising production is doing is putting a cap on price rises. There will be a collapse in oil prices — just not in next couple years. These are boom times in the USA oil patch. Oil/gas is currently adding about an additional 400 billion to the economy. that number will rise to 1 trillion annually in 3-4 years.