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 got better mileage by removing unused gas station maps from my glove box.
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.
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.
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!”
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.
Yep, and we can remind everyone of that factoid...
I've been putting this sticker on gas pumps:
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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.
“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.
Thanks, I was hoping someone would notice.
You bet...
“Dry land is not just our destination, it is our destiny!” —”Deacon,” “Waterworld”
We need six dollar oil in November to get rid of Obama
If the Feds do QE 3 oil will go back up to 100 dollars a barrel
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.
I’ll up the bid to $4.50
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.
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.
Good point! But before we apologize to her we need to apologize to Newt at $2.50.
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.
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