"Ceterum censeo 0bama esse delendam."
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
S.A. breaks even at a lower point than a lot of other producers, so by not cutting production they’re wagering that OTHERS facing higher break-even points will have to cut production:
That would mean S.A.’s market share would climb, permitting them to make more money.
Basically S.A. is saying they’re sick of being made the sucker, with other OPEC guys cheating and selling through less visible channels.
Yeah, they probably don’t mind screwing Russia, Iran and the USA.
The demand for petroleum distillates is very inelastic, which means the quantity demanded doesn’t change much relative to price changes. However, the big winner here is industry, espeically those where fuel is a large part of total cost (e.g., airlines, oil-fired generator plants, etc.). My guess it’s not going to be too long before these industries hedge their bets and start arbitraging the price. That will put a floor on the fall.
The countries that are hurting the most right now also can’t cut production because they need whatever money they can get. Right now countries like China are stockpiling oil, but even that will stop when all capacity is full. At that point, only the cheapest oil will sell. I think production may be cut when whole countries go offline, like Venezuela.
With lowered prices, business will start picking up and demand will increase and prices will eventually rise again. It’s inevitable. It will all come back into a natural balance again.
I bet we could drown Saudi in oil.
it won’t be us we are all about oil
Iran is in the drivers seat.....they now are in defacto control of Iraq, since without them the suni ISIS would be beheading them Shiite Iraqis by the thousands. Thus we see the Iranians selling as much oil as they can.....knowing that every penny the cost of gas goes down, hurts their arch enemy the Saudis.
My question is where are the Chinese going to get oil from when the Persian Gulf gets closed down? Because the Saudis need to stop this oil slide, they don’t have more staying power than the strong American Dollar nowadays. Saudis close the Persian Gulf through some ISIS proxy action and what will the Chinese do?
Chinese Navy Practicing in the Indian Ocean by chance?
Obama.
BS...there is no “US”...the oil industry is so diverse and spread over areas of production it cannot be controlled. Free enterprise is the reason oil is falling in price...low demand and high supplies. The Saudis and others can no longer control prices...and sure cant control demand!
If we want stability..we have to be the big supplier. Wont happen till we get a new pres.
Very interesting. Thanks to all posters.
The geopolitical shift in alliances and toppling of certain dictators may well justify this phase of American Might being exercised via the old Military-Political-Economic trinity of Cold War vintage.
Ah, the smell of regime change is as sweet as Napalm in the morning!
Horizontal drilling and fracking have greatly altered the supply equation. Few suppliers will sell oil for long if it costs more to extract it than they get for selling it. Saudi Arabia, Russia, and Venezuela and others have low extraction costs, but only when you consider the direct costs. They also have extremely high costs associated with the fact they run their country off the revenue generated by oil sale. When you factor this in, their production costs are likely to be even higher than the costs associated with fracking and horizontal drilling. It remains to be seen whether or not the frackers will beat the socialists. I'll place my bets on the frackers.
What a typically stupid article.
The "U.S." doesn't determine oil output. Hundreds of individual companies determine their own production. Now, maybe Saudi Arabia might blink, but American decisions will be based on the profitability of continued production.
Nothing else.
Statements such as this illustrate why what 'experts' say should be viewed cynically if at all.