Oil is Plunging...Good or bad for economy? (1 Viewer)

[msommer]

It also does a lot of damage to Iran and Russia. We can pretty easily handle the price drop, they can't. This is devastating the Russian economy. They are already back in recession.

Maybe US orchestrated the drop in price to damage Russia and back Putin down?

We didn't necessarily orchestrate it but SA definitely bumped output because it would economically squeeze both Iran and Russia (Assad's backers).

Nope. Saudi oil production is down a bit this year. It's been pretty stable about 10m bopd the last few years. In the last three years US oil production has gone from 6m bopd to just under 9m bopd

They have fought OPEC to maintain consistent output despite increases in the US. They definitely know what they are doing here.

Yes, and your point is?

Factually they are not dumping pil on the market. The US is.

 

[jonessed]

It also does a lot of damage to Iran and Russia. We can pretty easily handle the price drop, they can't. This is devastating the Russian economy. They are already back in recession.

Maybe US orchestrated the drop in price to damage Russia and back Putin down?

We didn't necessarily orchestrate it but SA definitely bumped output because it would economically squeeze both Iran and Russia (Assad's backers).

Nope. Saudi oil production is down a bit this year. It's been pretty stable about 10m bopd the last few years. In the last three years US oil production has gone from 6m bopd to just under 9m bopd

They have fought OPEC to maintain consistent output despite increases in the US. They definitely know what they are doing here.

Yes, and your point is?Factually they are not dumping pil on the market. The US is.

My point is exactly what I said.

 

[Ditka Butkus]

As long as I can put or keep more money in Hip National...I couldn't care less.

 

[lombardi]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

I find irony in both sides. First the left who fought and continues to fight tooth and nail to stop fracking and new oil exploration now trying to give Obama credit for this energy boom that private enterprise has ushered in. Second the right who wants to scream and wail about how Obama drove up gas and oil prices for 6 years and now that it's coming down, letting the other side of their mouth talk about how it's actually bad for the economy for fuel to drop in price. Both sides are being completely disingenuous.

Of course cheaper energy is good for the economy, it always has been. No matter what market changes some people win and some people lose. Don't worry about the oil companies, they'll be just fine. Everyone else gets to ship every single thing that hits a truck, train, or ship for less money. Everything made of plastic or any other oil based material is cheaper. More jobs. How can this be bad for anyone not invested in oil?

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us. Forget what it does to the economy directly, stability and security do more for the economy than almost anything. The less we depend on the Middle East and the more control we have over our own raw materials apart from Chinese and Russian influence the better off we are in every way. That's the REAL story here.

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

 

[msommer]

It also does a lot of damage to Iran and Russia. We can pretty easily handle the price drop, they can't. This is devastating the Russian economy. They are already back in recession.

Maybe US orchestrated the drop in price to damage Russia and back Putin down?

We didn't necessarily orchestrate it but SA definitely bumped output because it would economically squeeze both Iran and Russia (Assad's backers).

Nope. Saudi oil production is down a bit this year. It's been pretty stable about 10m bopd the last few years. In the last three years US oil production has gone from 6m bopd to just under 9m bopd

They have fought OPEC to maintain consistent output despite increases in the US. They definitely know what they are doing here.

Yes, and your point is?Factually they are not dumping pil on the market. The US is.

My point is exactly what I said.

Why do you think what you said is pertinent to what I said?

 

[Sand]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us. Forget what it does to the economy directly, stability and security do more for the economy than almost anything. The less we depend on the Middle East and the more control we have over our own raw materials apart from Chinese and Russian influence the better off we are in every way. That's the REAL story here.

Yep, yep, and yep. From a geopolitical independence viewpoint not being beholden to bad actor states is a great idea.

Factually they are not dumping pil on the market. The US is.

I hate this term. The US, unlike Saudi Arabia, isn't a monolithic identity. "We" aren't dumping, individual companies are producing as they can.

 

[cstu]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

 

[jonessed]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

 

[msommer]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

 

[jonessed]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

 

[Jackstraw]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

I find irony in both sides. First the left who fought and continues to fight tooth and nail to stop fracking and new oil exploration now trying to give Obama credit for this energy boom that private enterprise has ushered in. Second the right who wants to scream and wail about how Obama drove up gas and oil prices for 6 years and now that it's coming down, letting the other side of their mouth talk about how it's actually bad for the economy for fuel to drop in price. Both sides are being completely disingenuous.

Of course cheaper energy is good for the economy, it always has been. No matter what market changes some people win and some people lose. Don't worry about the oil companies, they'll be just fine. Everyone else gets to ship every single thing that hits a truck, train, or ship for less money. Everything made of plastic or any other oil based material is cheaper. More jobs. How can this be bad for anyone not invested in oil?

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us. Forget what it does to the economy directly, stability and security do more for the economy than almost anything. The less we depend on the Middle East and the more control we have over our own raw materials apart from Chinese and Russian influence the better off we are in every way. That's the REAL story here.

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

If you completely ignore externalities like damaging the planet irreparably. But that's just minor details man.

 

[jonessed]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

I find irony in both sides. First the left who fought and continues to fight tooth and nail to stop fracking and new oil exploration now trying to give Obama credit for this energy boom that private enterprise has ushered in. Second the right who wants to scream and wail about how Obama drove up gas and oil prices for 6 years and now that it's coming down, letting the other side of their mouth talk about how it's actually bad for the economy for fuel to drop in price. Both sides are being completely disingenuous.

Of course cheaper energy is good for the economy, it always has been. No matter what market changes some people win and some people lose. Don't worry about the oil companies, they'll be just fine. Everyone else gets to ship every single thing that hits a truck, train, or ship for less money. Everything made of plastic or any other oil based material is cheaper. More jobs. How can this be bad for anyone not invested in oil?

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us. Forget what it does to the economy directly, stability and security do more for the economy than almost anything. The less we depend on the Middle East and the more control we have over our own raw materials apart from Chinese and Russian influence the better off we are in every way. That's the REAL story here.

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

If you completely ignore externalities like damaging the planet irreparably. But that's just minor details man.

 

[msommer]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

:mindblown:

What does excess capacity have to do with the current situation? May I remind you we are talking about stable Saudi production and plunging world prices

 

[tommyboy]

good for us, bad for Russia, Iran, Saudi Arabia

 

[jonessed]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

:mindblown:What does excess capacity have to do with the current situation? May I remind you we are talking about stable Saudi production and plunging world prices

You implied that they had to keep production high for economic reasons. They don't. Their massive market share coupled with their excess capacity means they can tailor prices. They are the only country that can do this. The U.S. supply isn't centrally controlled and countries like Russia and Iran have to run at full tilt.

 

[msommer]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

:mindblown:What does excess capacity have to do with the current situation? May I remind you we are talking about stable Saudi production and plunging world prices

You implied that they had to keep production high for economic reasons. They don't. Their massive market share coupled with their excess capacity means they can tailor prices. They are the only country that can do this. The U.S. supply isn't centrally controlled and countries like Russia and Iran have to run at full tilt.

They cannot control prices nearly as much as they could in the 70'ies/80'ies.

Saudi oil revenues in 2013 was USD 274 bn, about 30% of OPEC (revenues, costs for extraction and exploration, interest etc. not deducted)

Jan-Jun 2013 was 130 bn, jan-jun 2014 124 bn in both case average oil price usd 108 (Brent, but related).

Now Brent trades at USD 67. EIA estimated in late oct that 4th qtr oil price average would be aprox USD 80 - that looks optimistic.

Obviously Saudi could have sold some or all of it on futures but eventually they will mature.

Assuming that they haven't there should be a significant shortfall in 2014 oil revenues to the tune of 25-30bn for 2014 and to the tune of usd 100bn for 2015. They do have a sovereign wealth fund to suck from so there is that.

Now they are unlikely to have budgeted with an oil price at above usd 100/barrel, but still it's thinning the margins significantly

 

[George Jefferson Airplane]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

 

[George Jefferson Airplane]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

:mindblown:What does excess capacity have to do with the current situation? May I remind you we are talking about stable Saudi production and plunging world prices

You implied that they had to keep production high for economic reasons. They don't. Their massive market share coupled with their excess capacity means they can tailor prices. They are the only country that can do this. The U.S. supply isn't centrally controlled and countries like Russia and Iran have to run at full tilt.

They cannot control prices nearly as much as they could in the 70'ies/80'ies.

They are absolutely controlling what is going on with oil prices right now. They can produce oil at $5 a barrel, they still hold most of the cards regardless of how much the U.S. produces. If they decide to cut their production tomorrow, oil prices go up and there is nothing anyone can do.

 

[George Jefferson Airplane]

Despite falling oil prices, the Organization of Petroleum Exporting Countries (OPEC) voted on November 27th not to cut production in order to boost prices.

The key to this decision appears to have been the attitude of Saudi Arabia, which has long been the first among equals in the coalition. Not surprisingly, the decision led to further oil price declines, and led many observers to conclude that OPEC has largely lost the ability to upwardly influence the price of petroleum. But this determination ignores the wider geopolitical considerations that may be convincing Saudi Arabia to be perfectly content, for now, with lower prices.

With about 20 percent of the world's proven oil reserves and producing between 10 and 13 percent of the global oil usage, Saudi Arabia is the world's leading oil producer ahead of the U.S., China, Iran and Canada. Perhaps more importantly, with its developed and easily accessible oil fields, Saudi Arabia has some of the lowest "lifting costs" in the world. Some estimate that it only costs the Saudis less than $5 to extract a barrel of oil from its fields. This is stark contrast to the much higher costs in rival countries and offshore and of shale producers. This permits the Saudis to withstand a protracted price slump far easier than other countries. The Saudis can use this ability as a weapon to achieve its strategic ends.

Modern U.S./Saudi relations were shaped towards the end of WWII by negotiations between President Franklin D. Roosevelt and the Saudi King Ibn Saud. In return for Saudi cooperation over oil, the United States guaranteed Saudi Arabia military protection. Despite the clear ideological differences between a conservative Wahabbi Sunni Kingdom and a Western democracy, this policy has largely held for some 68 years. Saudi Arabia exercised moderation and consistency over oil supplies from the Arab Gulf. In return, the United States led an impressive Allied military defeat of an Iraqi threat to Saudi Arabia in Gulf War I.

While the current dip in energy prices clearly does hurt Saudi Arabia, it hurts her enemies far more, particularly Iran and Russia, which has been a key enabler of Iranian power and an international pariah on its own. Putting pressure on Russia has also become a key strategic interest of Washington.

For many oil exporting nations, the tax revenues generated from petroleum constitute a major portion of government budgets and have become essential to the maintenance of long-term solvency. Nations like Russia, with oil generating 50 percent of tax revenues in 2013, according to the Ministry of Finance, are assumed to have a 'Budget Break Even Cost' (BBEC) of around $105 per barrel based on Citi Research's data. Obviously the current price, less than $70 per barrel, is placing a great deal of strain on President Putin's finances. Iran has a BBEC of some $131 oil. Recovering from recent sanctions, Iran has few currency reserves. Therefore, oil at $70 will necessitate an early cut in government spending, risking civil discontent and possible regime change.

Saudi Arabia is assumed to have a lower BBEC of some $98 per barrel. And although current prices are lower than that, over decades Saudi Arabia has accumulated vast foreign exchange reserves. As a result, many observers believe she can sustain her economic budget for a considerable time with oil selling at below $93 a barrel. Meanwhile, countries such as Russia, Iran and, particularly, Venezuela, which already is nearing default on its debt, must start cutting government spending to reflect depleted oil revenues. These outcomes are firmly in the interests of both Saudi Arabia and her longtime strategic partner, the United States.

And although U.S. consumers are now enjoying the benefits of lower fuel costs, which will help spark consumer demand, the threat to the U.S. energy industry should not be overlooked. U.S. oil companies have invested heavily in horizontal oil drilling and so-called fracking to increase well yields. U.S. domestic oil production has risen significantly over the past five years and now approaches 8 million barrels per day based on data from the U.S. Energy Information Administration (EIA). However, much of this investment was made on the basis of $100 oil. If the price stays below $70 for long, the continued viability of some smaller U.S. oil companies might be threatened, particularly in Texas and South Dakota. Citigroup Inc.'s recent forecast that the U.S. would pump 14.2 million barrels per day by 2020 could prove illusive and result in job losses.

However, there are more serious strategic concerns currently in play. The Obama Administration's recent engagement with Iran may be of great concern to the Saudis, who consider Iran to be a mortal threat. Currently, the U.S. and Iran are in protracted negotiations over Iranian nuclear capabilities. The U.S. appears to be willing to acquiesce to Iranian desires in exchange for more cooperation against ISIS.

These concerns may have escalated this week when it was announced that Iran had recently conducted air strikes against ISIS insurgents within Iraqi territory. U.S. Secretary of State John Kerry reacted to these revelations as a "welcome development." Although ISIS should be considered an enemy to both the U.S. and Iran, American acceptance of Iranian military intervention in Iraq can be seen as a clear shift in Washington's policy towards Tehran.

If such is the case, the Saudis may begin to feel 'dumped' by Obama, and may be tempted to turn more forcefully towards China, the world's largest oil importer, offering cheap oil in return for strategic protection against a new American-backed Iranian regional threat.

The effects of international recession and the U.S. 'oil boom' were slow to create a production glut because, until recently, production from Iran, Russia, Iraq and Libya was curtailed by sanctions and war. Cheap oil likely will protect and increase Saudi Arabia's oil market share.

The real costs of Obama's dropping the U.S.'s 68-year friendship with Saudi Arabia in favor of Iran are becoming increasingly apparent. If Saudi Arabia is forced closer to China, taking with her other Arab Gulf States (OAPEC), the long-range implications could be extremely serious for America and Europe.

Read more: http://www.europac.net/commentaries/why_opec_will_tolerate_cheap_oil#ixzz3LQXB1qWf

 

[Sand]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

Mildly bad as their breakeven is said to be about $80-90 a barrel.

Also very good for Europe (except maybe Norway) who have to import huge amounts of oil.

 

[msommer]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

That doesn't even make sense. Russia isn't part of OPEC and Saudi Arabia, by far OPECs biggest power, is pulling the strings.

Indeed. By doing nothing while US produced oil grows. Because secretly they want lower oil prices so there can be unhappiness in Saudi when social benefits in decrease!

What are you talking about? Saudi Arabia is the only OPEC member with excess capacity. They have more control over the price of oil than anyone elseThey are clearly trying to put pressure on the economies of Russia and Iran. There's some argument that they are also trying to put pressure on American shale, but that's tougher to gauge.

:mindblown:What does excess capacity have to do with the current situation? May I remind you we are talking about stable Saudi production and plunging world prices

You implied that they had to keep production high for economic reasons. They don't. Their massive market share coupled with their excess capacity means they can tailor prices. They are the only country that can do this. The U.S. supply isn't centrally controlled and countries like Russia and Iran have to run at full tilt.

They cannot control prices nearly as much as they could in the 70'ies/80'ies.

They are absolutely controlling what is going on with oil prices right now. They can produce oil at $5 a barrel, they still hold most of the cards regardless of how much the U.S. produces. If they decide to cut their production tomorrow, oil prices go up and there is nothing anyone can do.

Try to get with the times, George

 

[Sand]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

Not national parks, but land and offshore spaces that the feds control (but I'm sure you knew that).

 

[Sammy3469]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

Mildly bad as their breakeven is said to be about $80-90 a barrel.

Also very good for Europe (except maybe Norway) who have to import huge amounts of oil.

That's their breakeven for the government budget, not the breakeven in turns of what it takes to get it out of the ground.

And Saudi will keep it this low until all the US oil sands/fracking concerns built on junk debt are taken out on a stretcher. Have fun North Dakota.

and Obama can most definitely take some credit as Kerry was lobbying the Saudis for this over the summer:

http://news.yahoo.com/kerry-saudi-king-discuss-oil-supply-u-official-002958735.html

 

[Sand]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

Mildly bad as their breakeven is said to be about $80-90 a barrel.

Also very good for Europe (except maybe Norway) who have to import huge amounts of oil.

That's their breakeven for the government budget, not the breakeven in turns of what it takes to get it out of the ground.

And Saudi will keep it this low until all the US oil sands/fracking concerns built on junk debt are taken out on a stretcher. Have fun North Dakota.

IMO this is more about Iran than anything else. I wonder who is going to snatch up all these assets that may go under? The guys with cash piles are going to be sharpening their pencils.

 

[hxperson]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

Mildly bad as their breakeven is said to be about $80-90 a barrel.

Also very good for Europe (except maybe Norway) who have to import huge amounts of oil.

That's their breakeven for the government budget, not the breakeven in turns of what it takes to get it out of the ground.

And Saudi will keep it this low until all the US oil sands/fracking concerns built on junk debt are taken out on a stretcher. Have fun North Dakota.

IMO this is more about Iran than anything else. I wonder who is going to snatch up all these assets that may go under? The guys with cash piles are going to be sharpening their pencils.

Will probably be the majors that scoop them up, presuming oil stabilizes at a price were these plays have solid IRR's at their cost of capital.

 

[FlapJacks]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

drilling in our national parks?

 

[FlapJacks]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

I find irony in both sides. First the left who fought and continues to fight tooth and nail to stop fracking and new oil exploration now trying to give Obama credit for this energy boom that private enterprise has ushered in. Second the right who wants to scream and wail about how Obama drove up gas and oil prices for 6 years and now that it's coming down, letting the other side of their mouth talk about how it's actually bad for the economy for fuel to drop in price. Both sides are being completely disingenuous.

Of course cheaper energy is good for the economy, it always has been. No matter what market changes some people win and some people lose. Don't worry about the oil companies, they'll be just fine. Everyone else gets to ship every single thing that hits a truck, train, or ship for less money. Everything made of plastic or any other oil based material is cheaper. More jobs. How can this be bad for anyone not invested in oil?

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us. Forget what it does to the economy directly, stability and security do more for the economy than almost anything. The less we depend on the Middle East and the more control we have over our own raw materials apart from Chinese and Russian influence the better off we are in every way. That's the REAL story here.

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

If you completely ignore externalities like damaging the planet irreparably. But that's just minor details man.

you guys are killing it today

 

[George Jefferson Airplane]

good for us, bad for Russia, Iran, Saudi Arabia

How is it bad for Saudi Arabia?

Mildly bad as their breakeven is said to be about $80-90 a barrel.

Also very good for Europe (except maybe Norway) who have to import huge amounts of oil.

That's their breakeven for the government budget, not the breakeven in turns of what it takes to get it out of the ground.

And Saudi will keep it this low until all the US oil sands/fracking concerns built on junk debt are taken out on a stretcher. Have fun North Dakota.

and Obama can most definitely take some credit as Kerry was lobbying the Saudis for this over the summer:

http://news.yahoo.com/kerry-saudi-king-discuss-oil-supply-u-official-002958735.html

 

[cstu]

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us.

I 100% agree with this, but I've always said that I want to do it in the least environmental damaging way. That means holding off on off-shore drilling and drilling in Alaska as long as we can. Those resources will still be there and we will need them in the future. Let the ME suck their wells dry while we keep our in reserve.

 

[cstu]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

Not national parks, but land and offshore spaces that the feds control (but I'm sure you knew that).

Can't a guy use a figure of speech around here without it being nitpicked?

For the record though, he does oppose drilling in national parks.

 

[Otis]

I think it's bad for the Oconomy.

We've got guys in today converting the oil heat in our house to gas heat, and will have to figure out a way to sell off the thousand gallons of oil in our in-ground tank before we have it abandoned.

 

[Sand]

The answer to whether it's good or bad for the economy depends on if you're a Republican and want to blame Obama or a Democrat and want to give Obama credit for something

The most important thing Obama and Congress can do right now is support Domestic production and make sure we do everything we can to keep these American and Canadian companies pumping!

Yeah, the big O can't take credit for this as public land use for oil drilling has ground to a halt during his reign. He hasn't supported domestic production in the slightest. But the geopolitical effects are in his favor as this really puts some pressure on Russia, Iran, and Venezuela.

So he has OPEC's back against the wall without increased drilling in our national parks?

Not national parks, but land and offshore spaces that the feds control (but I'm sure you knew that).

Can't a guy use a figure of speech around here without it being nitpicked?

Where, exactly, do you think you are?

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us.

I 100% agree with this, but I've always said that I want to do it in the least environmental damaging way. That means holding off on off-shore drilling and drilling in Alaska as long as we can. Those resources will still be there and we will need them in the future. Let the ME suck their wells dry while we keep our in reserve.

Well right now we've certainly pushed the envelope enough with supply to keep prices low for a while. But, IMO, in 20 years we'll be in the fusion age. (yes, yes, )

 

[cstu]

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us.

I 100% agree with this, but I've always said that I want to do it in the least environmental damaging way. That means holding off on off-shore drilling and drilling in Alaska as long as we can. Those resources will still be there and we will need them in the future. Let the ME suck their wells dry while we keep our in reserve.

Well right now we've certainly pushed the envelope enough with supply to keep prices low for a while. But, IMO, in 20 years we'll be in the fusion age. (yes, yes, )

I'm not as optimistic about fusion in the near future but do think we can make safe nuclear plants using nuclear waste:

“If you don’t have electric power, or if you don’t have any operators on site, the reactor will just coast to a stop, and the salt will freeze solid in the course of a few hours,” she says.

The truth is that if we want to get off of oil, we can.

Advanced nuclear is not only safe but less expensive than fossil fuels.

 

[cstu]

Nuclear energy facilities are more expensive than some other electricity options to build. Why undertake such a project?

In general, large baseload plants like nuclear and coal are more expensive to build but cheaper and more efficient to operate over the long-term than a conventional gas turbine. The Energy Information Administration (EIA) compared the total system levelized cost for a wide range of generating sources, factoring in the capital cost to build the facility, operating and maintenance costs, transmission investment and efficiency.

EIA estimated the total system cost for an advanced nuclear energy facility to be $108 per megawatt-hour of electricity produced, compared with solar energy at $144 per MWh; and offshore wind at $221 per MWh. Onshore wind is less costly, at $86 per MWh, but it’s also less efficient.

The estimated total system cost for natural gas plants varied widely, depending on the type, from a low of $65 per MWh to a high of $130. The variable costs for a natural gas plant are highly sensitive to fluctuations in fuel price, since fuel accounts for nearly 90 percent of its production cost. Fuel represents just 31 percent of a nuclear energy facility’s production cost, and the price is relatively stable.

 

[flapgreen]

Thanks?

 

[Sand]

And actually none of that matters to me. What matters to me is that every ounce of crude we suck out of the sand it one less ounce we need to depend on foreign enemies to sell us.

I 100% agree with this, but I've always said that I want to do it in the least environmental damaging way. That means holding off on off-shore drilling and drilling in Alaska as long as we can. Those resources will still be there and we will need them in the future. Let the ME suck their wells dry while we keep our in reserve.

Well right now we've certainly pushed the envelope enough with supply to keep prices low for a while. But, IMO, in 20 years we'll be in the fusion age. (yes, yes, )

I'm not as optimistic about fusion in the near future but do think we can make safe nuclear plants using nuclear waste:

“If you don’t have electric power, or if you don’t have any operators on site, the reactor will just coast to a stop, and the salt will freeze solid in the course of a few hours,” she says.

The truth is that if we want to get off of oil, we can.

Advanced nuclear is not only safe but less expensive than fossil fuels.

No argument with the safe nuclear. Was just at a technical meeting with some Southern Company folks (they just managed to permit an expansion in Georgia - the first like that in forever). The note from one of their high up technical guys was that getting a new plant (of any type) permitted would be "the biggest lift" accomplished in any career. Slim chance with Republicans in office. Snowball making it to the ninth level of hell's chance with Democrats in office.

Disagree on fusion. There are four good competing options out there driving toward net positive energy (none of them the National Ignition Facility). The future is tantalizingly close.

 

[shader]

Oil down 4.5% today. That's another huge move. Gotta think some oil companies are getting nervous right now.

I'm loving it personally. Have to drive 500 miles tomorrow and getting reimbursed at .56 cents a mile. Cheap prices are putting a lot of that back in my pocket.

 

[MikeIke]

I think it's bad for the Oconomy.

We've got guys in today converting the oil heat in our house to gas heat, and will have to figure out a way to sell off the thousand gallons of oil in our in-ground tank before we have it abandoned.

I'll give you six dollars for it

 

[shader]

By the way, I think we are going to hit a point sometime, maybe that's now, where oil stocks or oil indexes are at a "deal of a lifetime" value. I don't when but it's almost impossible to call bottoms or tops, so if i were an investor, I'd be buying oil stocks and indexes as fast as I could.

 

[lod01]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

 

[St. Louis Bob]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Buy this, I am when it seems to bottom out. Looks like there is a ways to go though.

 

[mr roboto]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

Futures? I know large companies have done it in the past (Southwest Airlines).

 

[St. Louis Bob]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

Futures? I know large companies have done it in the past (Southwest Airlines).

My link

 

[lod01]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

Futures? I know large companies have done it in the past (Southwest Airlines).

Yeah, they can do it. I was thinking his idea is that he buys some sort of gas card from Walmart or BP, for instance, at existing prices and can use it later on when prices go back up.

Quite the idea too. Buy a bunch of these 'cards' and hold them and then sell them to others later on.

 

[lod01]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Buy this, I am when it seems to bottom out. Looks like there is a ways to go though.

If that goes below 20 which is looking quite probable, it sure seems like an easy double or even triple.

Is it one of those ETFs that degrade over time?

 

[St. Louis Bob]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Buy this, I am when it seems to bottom out. Looks like there is a ways to go though.

If that goes below 20 which is looking quite probable, it sure seems like an easy double or even triple.

Is it one of those ETFs that degrade over time?

No, only leveraged (2x, 3x, etc.) ETF's do that. This follows the price of US gasoline pretty closely.

 

[CBusAlex]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Just get a bunch of trash cans and fill them with gas. You can use it later or sell at a profit when prices go back up.

 

[lod01]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Buy this, I am when it seems to bottom out. Looks like there is a ways to go though.

If that goes below 20 which is looking quite probable, it sure seems like an easy double or even triple.

Is it one of those ETFs that degrade over time?

No, only leveraged (2x, 3x, etc.) ETF's do that. This follows the price of US gasoline pretty closely.

Seems like free money if you can hit it near the bottom. Of course, what would the bottom of this be if oil hits $10 a barrel again.

Interesting $10/barrel prediction I just found from 2009: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aox.KsSOudpA

 

[lod01]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

Futures? I know large companies have done it in the past (Southwest Airlines).

Yeah, they can do it. I was thinking his idea is that he buys some sort of gas card from Walmart or BP, for instance, at existing prices and can use it later on when prices go back up.

Quite the idea too. Buy a bunch of these 'cards' and hold them and then sell them to others later on.

There was a way to do this like 10 years ago, when prices went up I remember hearing about people who'd had old gas cards. But I don't think the programs are still around, are they?

If gas cards came out now, I would be very leery of them. It would be a huge red flag like someone is damn sure the price of oil is not going back up for a very long time.

 

[msommer]

So is there a way I can "lock in" to gas prices now? Are there any programs to pre-pay for gas at the current price then draw down off the account later?

Nice thought but I don't think so. They haven't figured out how to do something like this that ends up blowing up in your face, which is the only way it would happen.

Futures? I know large companies have done it in the past (Southwest Airlines).

Yeah, they can do it. I was thinking his idea is that he buys some sort of gas card from Walmart or BP, for instance, at existing prices and can use it later on when prices go back up.

Quite the idea too. Buy a bunch of these 'cards' and hold them and then sell them to others later on.

There was a way to do this like 10 years ago, when prices went up I remember hearing about people who'd had old gas cards. But I don't think the programs are still around, are they?

If gas cards came out now, I would be very leery of them. It would be a huge red flag like someone is damn sure the price of oil is not going back up for a very long time.

Probably they would use it as a hedge against the price falling further. In every hedge there is a loser...