Posted on 12/17/2014 10:05:19 AM PST by blam
Sam Ro
December 17, 2014
Oil prices are surging.
The price of West Texas Intermediate crude oil on Tuesday rose to $58.98 from $54.20. Brent crude rose to $63.50 from about $58.70.
At this point, there seems to be no obvious explanation for the move.
On Tuesday, oil prices tumbled to five-year lows. WTI touched $53.60 and Brent sank to $59.86, both were the lowest levels since May 2009.
(snip)
(Excerpt) Read more at businessinsider.com ...
I saw that one but a bit out of the way for me. The Pasadena one is only a mile and a half away.
Conservatives object to taxes because they have a way of growing over time and because they are difficult to get rid of once enacted.
Establishing a break even floor would be in line with a conservative approach.
The break even level could be adjusted as data are gathered to show a statistically significant change. The policy would be protectionist but not so protectionist that foreign producers would not be able to compete in US markets.
You don’t speak for conservatives. Nor do you speak for anyone with real connections in the oil trade.
Will take a long time for a dead cat to be reduced to oil... :)
Oil prices are based in part on speculators. Banning fracking means less natural gas going forward. Less natural gas means a certain population of potential users of said gas will keep using oil. More people using oil means more demand. More demand means higher prices.
Bingo!
Short covering. Just image how much you would have made on each futures contract IF you had sold just a couple weeks ago. Now imagine a month ago.
However, I think the Saudis are more concerned about Russia and Iran than they are about US producers. I think cutting US production is NOT the main objective. Hurting Russia and Iran is. It is crushing them.
As far as price supports. I just have to say this: NO
Will you please site the authority for the feds to select what price private business may be allowed to pay from select suppliers?
We have a constitutional republic, not a kingdom, regardless of how many politicians want to forget that.
Conservative don't make up new reasons to give more power to the federal government. Why do you think tarriffs would grow but this action would not? Why not $50, $100, or a $1,000? Why not same action on all imports?
I hope to God it gets back up to over $110/bbl. I design oil derricks and I really need the overtime.
Can we stick to the topic and not personal attacks?
You claim to speak what is supported by conservative beliefs but others cannot?
Preserving American oil/gas production is in the interest of national security. A foreign power (Saudi Arabia) is waging a price war. It is not a natural occurrence of market economics but a deliberate strategy to shape a vital market to their advantage and our detriment. A non-shooting war but one that could still have a devastating impact on American jobs and our economy.
I consider myself a conservative but one of the natural functions of govt is to defend us against foreign attack. I think import tariffs to protect our domestic oil/gas industry is absolutely called for in this case, which is why Obama won’t do it.
Yes very good points indeed. And unintended consequences I had not thought of.
But sill, it seems to me that we are playing fair and OPEC is not.
And there are times when our government SHOULD step in to help private business. For example, should we allow China to manufacture and sell knock-off US goods with US brand names without regard for patents?
I’m all for limited and much smaller government, but the government does indeed play a role in protecting the interests of US companies to ensure a level playing field.
By not producing more oil, by not acting in coordination to cut production and raise global prices.
Is that your complaint? Did you have the same complaint 6 months ago? You want Cartels to raise prices and if they won't, you want the Federal Government to punish the US consumers of the same product?
Really?
Do you understand the price is dropping due to reductions in the global demand growth rate (still growing, just slower) while the US and Canada is increasing production at a faster rate, while OPEC is basically holding steady.
This is actually OPEC not being effective and the market responding.
OPEC is holding steady?
I think they slashed the price to try to destroy their biggest threat: the US fracking industry.
And as you noted, global demand is still rising, although at a slightly reduced rate.
By the way, I’m wondering: What is the Saudi’s break-even price for a barrel?
The over paid oil workers had a good run while every one else suffered. Hopefully they didn’t squander those big pay checks. It’s the customers’ turn for a little break. If the low oil prices last more than five years I’ll feel bad for them.
It's been discussed on here a lot. Depends on what you use as "cost". They can get it out of the ground for next to nothing, but they are funding all these govt social programs from the profits. If you include those costs, you see numbers of 60 and 70 USD/bbl.
Protecting Patents, upholding our laws is hardly the same case.
Let us look at a better example, more in line with your suggestion.
Sugar Tariffs -—> High Fructose Corn Syrup
Do you want more ethanol in your gasoline? What you suggest helps support it.
We do not want the government to artificially raise prices above the global market. We do not want the government to select winners and losers in industry.
Thank you. So below $60 is not sustainable long-term for them.
Seems we have here a classic game of chicken.
OPEC nations typically set prices based upon the market exchange price. Different grades of oil sell at different adders or discounts to a set exchange trade quality and location.
Saudi uses the Dubai Oman Crude’s trading price average for reference to their selling price.
Saudi is actually producing less oil than they did a year ago, but not much different, just a small percentage change. OPEC in total is producing within ~2% of their 30 MMBPD allocation for several years. With some of Libya’s disruptions ending, they have sent a bit more oil to the market, but little compared to the US increases.
I’ve also seen comments that they have financial assets “in the bank” so to speak that they could go 12-18 months of price war without much problem.
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