Author Topic: Oil at $10 a barrel?  (Read 9529 times)

Offline Solar

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Oil at $10 a barrel?
« on: January 12, 2015, 06:45:56 AM »
It appears that OPEC thinks the faster they push the barrel lower, the sooner it will recover.
They are under the illusion they have control over world oil prices and have the ability to wait out an American collapse in production.
I say their play is suicide, or the last desperate move of a dying entity, or in the least, one huge bluff.

http://www.bloomberg.com/news/2015-01-09/why-opec-is-talking-oil-down-not-up-after-48-selloff.html
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Offline Dori

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Re: Oil at $10 a barrel?
« Reply #1 on: January 12, 2015, 07:08:30 AM »
It appears that OPEC thinks the faster they push the barrel lower, the sooner it will recover.
They are under the illusion they have control over world oil prices and have the ability to wait out an American collapse in production.
I say their play is suicide, or the last desperate move of a dying entity, or in the least, one huge bluff.

http://www.bloomberg.com/news/2015-01-09/why-opec-is-talking-oil-down-not-up-after-48-selloff.html

Wouldn't lower energy prices here increase our economy?  Energy is one reason we've lost so much manufacturing. 





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Offline Solar

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Re: Oil at $10 a barrel?
« Reply #2 on: January 12, 2015, 07:47:38 AM »
Wouldn't lower energy prices here increase our economy?  Energy is one reason we've lost so much manufacturing.
Yes and no. Energy is what economies run on, the life blood of all manufacturing, but if there is no Mkt demand for products, there is no drive for production, so the price of oil will continue to fall.

I do not expect to see a global recovery until after 2016, when the world will breathe a sigh of relief that adults are once again in charge of the American economy..
The only reason we're in a global recession/depression, is all due to crony capitalists and the Marxist in the WH.

We are still setting up for the perfect storm for Conservatism's return to dominance.
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Online supsalemgr

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Re: Oil at $10 a barrel?
« Reply #3 on: January 12, 2015, 08:08:44 AM »
Wouldn't lower energy prices here increase our economy?  Energy is one reason we've lost so much manufacturing.

Yes it would, but it would have a negative impact on the oil industry and fracking. I lived in the mid south in the 70's and saw the boom and the bust from the high prices then. However, once the infrastructure is in place it is there. I remember oil rigs being capped in the Gulf and once the prices went back up those rigs were put back into production. Another positive is that these operations are not just harvesting oil, but natural gas as well. This is our wild card. The Russians and Iranians are big losers in this deal.
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Offline Solar

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Re: Oil at $10 a barrel?
« Reply #4 on: January 12, 2015, 08:57:12 AM »
Yes it would, but it would have a negative impact on the oil industry and fracking. I lived in the mid south in the 70's and saw the boom and the bust from the high prices then. However, once the infrastructure is in place it is there. I remember oil rigs being capped in the Gulf and once the prices went back up those rigs were put back into production. Another positive is that these operations are not just harvesting oil, but natural gas as well. This is our wild card. The Russians and Iranians are big losers in this deal.
Exactly! That was a point I mentioned in another thread, that oil is merely an plus while harvesting Ng for the world Mkt, completely circumventing Russian dominance in their stranglehold over Europe's need for gas.
Sure, we may curtail oil production for the time being, but these wells will not cease to exist as long as there is demand for Ng.

I think the Saudis are gambling with their very way of life in their hopes that they can wait us out.
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Offline Gator Monroe

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Re: Oil at $10 a barrel?
« Reply #5 on: January 12, 2015, 01:10:14 PM »
99cents a Gallon in 29 States would be really nice again :popcorn:

Online supsalemgr

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Re: Oil at $10 a barrel?
« Reply #6 on: January 12, 2015, 01:13:36 PM »
99cents a Gallon in 29 States would be really nice again :popcorn:

Obama and environmentalist wackos would not like that. Bye bye solar and wind.
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zewazir

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Re: Oil at $10 a barrel?
« Reply #7 on: January 12, 2015, 10:15:21 PM »
Sounds like the ideal situation to me. Buy theirs when it's cheap, and make our own when it's expensive. Cheaper energy means less spent on it, which frees up cash for other things. Increased demand in those areas of the economy creates jobs, more than offsetting the jobs lost from shale oil rigs shutting down. When prices go back up, shale oil production starts back up. I don't believe the cycle will take so long we'll lose the shale oil infrastructure and have to start over. Get us back on a REAL, producing economy. Tone down the regulations to what is actually needed, and cut back corporate taxes - to zero preferably - and industry will be able to absorb, and even take advantage of when oil prices do go back up.

This crap of the government giving money they don't have to their chosen voting block, so they can go out and spend it on foreign made junk, and calling it a "healthy economy" has GOT to STOP!

Online supsalemgr

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Re: Oil at $10 a barrel?
« Reply #8 on: January 13, 2015, 05:01:27 AM »
Sounds like the ideal situation to me. Buy theirs when it's cheap, and make our own when it's expensive. Cheaper energy means less spent on it, which frees up cash for other things. Increased demand in those areas of the economy creates jobs, more than offsetting the jobs lost from shale oil rigs shutting down. When prices go back up, shale oil production starts back up. I don't believe the cycle will take so long we'll lose the shale oil infrastructure and have to start over. Get us back on a REAL, producing economy. Tone down the regulations to what is actually needed, and cut back corporate taxes - to zero preferably - and industry will be able to absorb, and even take advantage of when oil prices do go back up.

This crap of the government giving money they don't have to their chosen voting block, so they can go out and spend it on foreign made junk, and calling it a "healthy economy" has GOT to STOP!

Absolutely correct. The infrastructure was built on dollars from the high price. It can be taken out of production and preserved for when the price goes back up. The current situation comes from a combination of the US producing much more, world demand is down and all other producers are pumping like crazy trying to preserve their cash flow.
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Offline TboneAgain

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Re: Oil at $10 a barrel?
« Reply #9 on: January 13, 2015, 08:59:08 AM »
Absolutely correct. The infrastructure was built on dollars from the high price. It can be taken out of production and preserved for when the price goes back up. The current situation comes from a combination of the US producing much more, world demand is down and all other producers are pumping like crazy trying to preserve their cash flow.
OPEC members in general have little besides oil to offer on international markets. (Who needs a boatload of sand?) They have fashioned convoluted internal economies based on the ability to sell their oil externally at $80+/barrel. THAT is why they're "pumping like crazy."
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Offline sensualblighter

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Re: Oil at $10 a barrel?
« Reply #10 on: February 18, 2015, 10:31:06 PM »
OPEC’s decision not to cut production and raise prices shocked observers.   :mad:



Offline Solar

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Re: Oil at $10 a barrel?
« Reply #11 on: February 19, 2015, 05:44:40 AM »
OPEC’s decision not to cut production and raise prices shocked observers.   :mad:
:lol: :lol: :lol:
I find it funny when these commies discovered they had lost complete control over oil production, all because of free mkt enterprise. :thumbsup:
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Offline Solar

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Re: Oil at $10 a barrel?
« Reply #12 on: February 23, 2015, 11:07:00 AM »
More dire news for OPEC. :biggrin:

The recent surge in oil prices is just a "head-fake," and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report on Monday as it lowered its forecast for crude.
Despite global declines in spending that have driven up oil prices in recent weeks, oil production in the U.S. is still rising, wrote Edward Morse, Citigroup's global head of commodity research. Brazil and Russia are pumping oil at record levels, and Saudi Arabia, Iraq and Iran have been fighting to maintain their market share by cutting prices to Asia. The market is oversupplied, and storage tanks are topping out.
A pullback in production isn't likely until the third quarter, Morse said. In the meantime, West Texas Intermediate Crude, which currently trades at around $52 a barrel, could fall to the $20 range "for a while," according to the report. The U.S. shale-oil revolution has broken OPEC's ability to manipulate prices and maximize profits for oil-producing countries.
"It looks exceedingly unlikely for OPEC to return to its old way of doing business," Morse wrote. "While many analysts have seen in past market crises 'the end of OPEC,' this time around might well be different," Morse said.
Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45-$55 range are unsustainable and will trigger "disinvestment from oil" and a fourth-quarter rebound to $75 a barrel, according to the report. Prices this year will likely average $54 a barrel.
http://www.bloomberg.com/news/articles/2015-02-09/citi-oil-could-plunge-to-20-and-this-might-be-the-end-of-opec-
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Offline edward222

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Re: Oil at $10 a barrel?
« Reply #13 on: April 05, 2015, 08:03:24 PM »
Obama and environmentalist wackos would not like that. Bye bye solar and wind.

How I wish it will happen :).

Offline Possumpoint

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Re: Oil at $10 a barrel?
« Reply #14 on: April 22, 2015, 03:23:26 PM »
Yes and no. Energy is what economies run on, the life blood of all manufacturing, but if there is no Mkt demand for products, there is no drive for production, so the price of oil will continue to fall.

I do not expect to see a global recovery until after 2016, when the world will breathe a sigh of relief that adults are once again in charge of the American economy..
The only reason we're in a global recession/depression, is all due to crony capitalists and the Marxist in the WH.

We are still setting up for the perfect storm for Conservatism's return to dominance.
I think that you are under an illusion that any member or members of the two major parties in this country has the political will and wherewithal to achieve meaningful change in the financial future of this country. I don't care if they are conservatives or members of the tea party or what. Once Nixon took us off the gold standard the fate of this country's economy was sealed. No major economy has ever survived that action.

Once politicians and/or central banks are allowed to print fiat money the die is cast. We'll be okay till investors start to feel we can't pay our debts. Once that happens and it is just starting, inflation will rise its ugly head. Our national debt cannot survive with interest rate increases. We already borrow to pay the bills. Borrowing to pay the interests is financial death.

We are past the point where meaningful action by this country's leaders will have any significance.  Actions needed to correct the situation would be so drastic that they are politically unacceptable and would be blocked by the voters. There is no will to eliminate the Federal Reserve or return to the gold standard. Rising taxes, eliminating fat and fluff, dropping SS, Medicare and welfare dependents would not pass Congress. We'll ride this runaway train till it jumps the track. Protect yourself as best as you can.

 

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