Posted on 11/27/2018 8:46:02 AM PST by con-surf-ative
President Trump recently took credit for the plunge in oil prices since early October. As I noted in a recent article, it’s true that the President’s actions have contributed to the drop in oil prices, but at a cost that has been largely ignored. This week the President decided to share the credit for lower oil prices on Twitter:
(tweet omitted)
President Trump thanks Saudi Arabia for low oil prices. How President Trump Affected Oil Prices. Let’s review. The trade war with China resulted in China halting imports of U.S. oil. Prior to that, U.S. oil producers had been shipping half a million barrels a day to China. This loss of market hurt U.S. oil producers, and helped push inventories higher in the U.S. This further hurt U.S. oil producers by pushing prices down.
(Excerpt) Read more at oilprice.com ...
There is such a oversupply problem in western Canada that the price/barrel dropped to $15 fob Alberta. All the pipelines are full. No more capacity. Therefore, the next option is to ship it by rail tanker cars via the CN or CPRS railroads. The railroads like this business because the whole train(like coal) starts in one place and never stops except for crew changes until it gets to the refinery destination. Then the empty train all goes back to where it started and repeats.
The problem results when the train derails in places like Lac-Mégantic, PQ on a Saturday night kills 50 people and burns half the town to the ground. That train was going from the Bakken Shale area to Irving’s refinery in St. John’s, NB. However, at least that only wasn’t transported in one of those dangerous pipelines like Keystone.(sarc)
Oye Vey
“Basically, whatever the outcome, Trump sucks. Does that about cover it?”
Yeah that pretty much sums it up.
Pretty good summary. I agree with much of it. However, I too purchase fuel from Costco, but their lower fuel price is not an accurate reflection of the product’s actual cost. You see, Costco charges a membership fee. That membership fee represents the majority of the company’s annual profits. The cost of a hotdog and soda, and fuel, seem too good to be true until you realize your membership fee (along with everyone else’s, especially those who don’t purchase hotdogs and soda or fuel, is actually offsetting that “low fuel cost” and the “low-cost” hotdog and soda.
POTUS knows the parameters of local drillers to stay in business. $35 per barrel is a baseline break-even average. Anything north of that and drillers are making money.
Today WTI is hovering about $51 bbl which means wildcatters will keep working.
What POTUS won’t tolerate is Saudi dumping so that domestic oil prices crash below $25 bbl which bankrupts drillers. This is what Saudi Prince Allaweed tried doing during the Obamination era.
Things will be fine.
In case one hasn’t studied the history of Donald Trump, take note that he is a master at trade, finance, taxes, regulation, insurance, banking. He testified numerous times to Congress on matters of the economy, taxation, regulation. Members were hanging on his every word. The man knows more than 99.9% of everyone else when it comes to business.
Lower fuel prices translate to lower inflation. As the tariffs kick in, the fear of inflation is offset by lower energy prices. The Fed will have to come up with a real whopper to crash the Trump economy for 2020 by continuing to raise interest rates which is what they are now doing.
Going forward the USA is in a sweet spot, the sweetest I’ve seen in my lifetime. The USA is now the No. 1 oil producer in the world and can at anytime kick the Saudis in the *ss. This is huge but the liar media will not take it up as they are so in the tank to see the Trump economy get derailed in time for 2020.
“You see, Costco charges a membership fee.”
Yes, they do, but if you use their Credit Card, they give you the following cash back benefits:
“Cash back rewards: Using the Costco Anywhere Visa Card by Citi, you can earn 4 percent cash back on the first $7,000 spent on gas annually (then 1 percent), 3 percent cash back at restaurants and on eligible travel purchases, 2 percent cash back on all other purchases at Costco and Costco.com and 1 percent cash back on all other purchases.”
So in addition to having gasoline prices that are the lowest I’ve seen here, we also get a 4% discount on all the gas we buy each year, which at the moment totals $3,881.04 or a discount of $155.24!
Costco personnel know us by our first name. I guess that means we are getting rebates.
Are they blaming low Oil Prices for GM ending Chevy Volt production too.
4% Rebate with Executive Membership and a Costco Visa Card.
Costco Gas is at least 10 to 20 cents a Gallon cheaper here than at ARCO.
For the record, I am a very strong Trump supporter. I agree that Trump uses all resources at his disposal to reach his desired result on trade, commerce, regulation, etc. However the point of the article, with which I agree, is that higher energy prices are a net positive to the US economy, given that we are now a net exporter of crude oil and refined products.
Trump is viewing the oil market through the lens of 1973, and not recognizing current reality that a strong domestic energy industry is vital to the US economy at large. When people complain that gas costs $3.00 per gallon, I want to ask whether the extra 0.25 they might save on gas is worth hundreds of thousands of high paying oil and gas jobs that will go away if prices remain at this level.
The industry is still growing at the moment because capital was allocated 6 to 12 months ago based on $60 to $70 per barrel prices. Once this fiscal cycle plays out, look for dramatically reduced capital budgets, much smaller production growth and a huge number of layoffs. Many, many people reliant on the industry and their families will be hurt by this disruption. We’ve seen this movie before and it is very ugly and totally unnecessary.
That’s the ticket! Have that card as well, but not sure I’m going to keep it unless I can break even with the annual cost. I think I’m at about $75. You’re well ahead of me. But what’s that card cost, $150? But yeah, all my gas there.
I understand your point. It is valid. Why not sell USA oil on a two-tiered system? One price for domestic sale and the other price for export? I think just about every other oil producing country in the world does this.
Yes, oil producers are hurt when they have “too much” supply for any reason.
On the other hand, many others in the economy benefit when oil producers have greater supply without an equally increasing demand.
And yes, due to tarriffs the balance of trade may show less imports from China, but on oil and a few other things it will show less exports to China as well, and all in all not likely making a huge dent in the balance of trade.
The tarriffs ignore the command and control nature of the mercantilits state-capitalist economy run by the dictatorship in China, where without even resorting to tarriffs the government and party have broad and deep tentacles all over the economy with which to command changes in imports, or anything else they choose.
I do applaud what Trump is trying to do with respect to China. I am just not sure that tarriffs have the power to do it in the long run.
The reason hat plant closed was Ford stupidity. The Lincoln Town Car used to be made at that plant but the Lincoln Mercury division tanked the town car which sold out every model year thanks to Limo companies Ford sold that plant to GM which produces the entire Impala Lineup and the crappier Chevy Volt clunker which does not sell hardly anything why is that ? Simple crappy service at GM dealerships so Americans started buying good service car manufacturers like Hyundai and Honda.....GM cars suck and there service is even worse. The 2 H man outdo GM on all vehicles except trucks and even there Dodge is starting to kick there butt the Dodge has Cummings Diesels which are low on maintenance and medium on price IMHO and that of my grandsons...So I buy a Hyundai for serviceability and extras built in and a Dodge Truck with diesel to pull my motor home from lo tax Florida to visit my grand-kids in hi Tax New York...They will learn I am sure...
CHEAP LABOR COERCION GOOD!
CHEAP PRODUCT PRICES BAD!
Natural economy bad. Coerced economy good.
Big Business loves Big Government helping to coerce prices of labor ever so low. Big Business loves CHEAP LABOR.
Allow product prices to fall naturally, Big Business, CoC Chamber of Commerce cries like a loser.
https://creditcards.usnews.com/citi/costco-anywhere-visa-card
The Costco Citi Visa is $0 per year. There is Costco Membership Fee, but that’s different. We have A Costco Business Membership. I think it’s a little more, but you can go into the store early and miss the hoards if you need to.
#OrangeManBad
You are taking surface information and ignoring layered information. That’s where POTUS has understanding that you lack.
Things and facts in layered information are used in a deal to offset matters on the surface.
despite its name, Oil Price shills for so-called “renewables”. a high oil price is needed to make them economically viable.
ROBERT RAPIER: New Tech From Iceland Can Turn Carbon Dioxide Into Fuel
Published 24 October 2018 | viewed 9,519 times
I wrote this column in Iceland, where I recently traveled on a working vacation
2011: PeakProsperity: Transcript for Robert Rapier: The Scientific Challenges to Replacing Oil with Renewables
(Robert Rapier is presently the Chief Technology Officer for Merica International, a renewable energy company)
https://www.peakprosperity.com/page/transcript-robert-rapier-scientific-challenges-replacing-oil-renewables
The U.S. Naval Research Laboratory (NRL), Material Science and Technology Division, has been granted the first U.S. patent for a method to simultaneously extract carbon dioxide and hydrogen from seawater. This single process provides all the raw materials necessary for the production of synthetic liquid hydrocarbon fuels.
https://www.nrl.navy.mil/news/releases/nrl-seawater-carbon-capture-process-receives-us-patent
Don’t get too excited. New Tech takes decades to build out infrastructure. Meanwhile, POTUS has the eye on the prize for what’s available to deal with in the here and now. This article posted here is pablum packaged by bullsh*tters.
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