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PostPosted: Mon Jan 05, 2015 2:17 am
 


As they say in Vegas All in lol. Oil gambling is what is happening world wide by all Oil producing nations.


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PostPosted: Mon Jan 05, 2015 2:25 am
 


As I understand it, it's increased pumping that is driving prices down.

Innovations in the oil retrieval process and higher prices per barrel were making previously unreachable oil, viable.

Some didn't like that. They eventually began pumping more oil to pressure the new guys out of the biz.

Or as the first article suggests with a little added complexity...

Quote:
The U.S. has suddenly become the world’s largest combined producer of oil and natural gas.

That fact — along with a desire to weaken hostile Iran and Russia — has prompted the oil-rich Gulf sheikdoms to keep pumping oil even as the price falls. In their game of petro-chicken, the desperate sheiks hope that either their poorer enemies will run out of cash or that fracking in the U.S. will become unprofitable and cease.


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PostPosted: Mon Jan 05, 2015 5:07 am
 


Those same Sheiks are also trying to edge out the more expensive North American oil producers, as well.

These people are not our friends.


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PostPosted: Mon Jan 05, 2015 9:42 am
 


Jabberwalker wrote:
Yup. We've just discovered that there is an infinite supply of oil, after all.


Of course it's not infinite, but it's far more plentiful than the Chicken Littles like Jimmy Carter have warned.


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PostPosted: Mon Jan 05, 2015 3:16 pm
 


So, the "It just happened", folk who were strutting about on the first page seem to be having a problem coming up with an alternative reason explaining what caused the drop in oil prices. The "Free Enterprise caused it" story of the two articles was stridently denounced, but we're still waiting for a better explanation.

Very well, not to worry guys. Your comrades in Russia and Venezuela are always ready to help out.

Quote:
The ‘Oil War’

“Did you know there’s an oil war? And the war has an objective: to destroy Russia,” said Venezuelan President Nicolas Maduro in a live television speech last week. “It’s a strategically planned war … also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse. It’s the United States that has started the war,” Maduro said, and its strategy was to flood the market with shale oil and collapse the price.

Russia’s President Vladimir Putin agrees. “We all see the lowering of oil prices,” he said recently. “There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.” The evil Americans are at it again. They’re fiendishly clever, you know.

We are hearing this kind of talk a lot these days, especially from countries that have been hit hard by the crash in the price of oil. Last Thursday, Brent crude hit $55 per barrel, precisely half the price it was selling for last June. The Obama administration’s announcement last week that it is preparing to allow the export of some U.S. oil to foreign markets may send it even lower (U.S. crude oil exports have been banned since 1973).

Countries that depend very heavily on oil exports to make ends meet are obviously going to get hurt when the oil price collapses. President Putin, who has let Russia get itself into a position where more than half its budget revenue comes from oil and gas sales (some estimates go as high as 80 percent) is in deep trouble; the value of the ruble has halved, and the economy has already slipped into recession.
Venezuela, where government spending is certainly more than 50 percent dependent on oil exports, is in even deeper trouble and, like Putin in Russia, President Maduro of Venezuela sees this as the result of an American plot. Various commentators in the West have taken up the chorus, and the conspiracy theory is taking root all over the developing world.

So let us consider whether there really is an “oil war”. The accusation is that the United States is deliberately “flooding the market” with shale oil, that is, with oil that has only become available because of the fracking techniques that have become widespread, especially in the U.S., over the past decade. Moreover, Washington is doing this for political purposes, not just because it makes economic sense for the United States to behave like this.

In order to believe this conspiracy theory, however, you really have to think that a rational U.S. government, acting in its own best economic interests, would do the opposite: suppress the fracking techniques and keep American oil production low, in order to keep its imports up and the oil price high. But why on earth would it want to do that?

By 2012, over a million fracking operations were performed in U.S. wells, but also in 2012, last year’s events in Ukraine were unforeseen and the United States and Russia were still on relatively good terms. Many oil-exporting countries were worried about the prospect that rising U.S. oil and gas production would shrink American imports and thereby cut their own profits, but it was still seen as a supply-and-demand problem, not a strategic maneuver.

So did the U.S. develop fracking to hurt its enemies? The dates just don’t work for Russia: fracking was already making U.S. production soar years before Washington started to see Moscow as an enemy. As for Venezuela, it continues to be the fourth-largest exporter of oil to the United States, at a time when the glut of oil on the market would let Washington cut Venezuela out of the supply chain entirely.

And Barack Obama is not opening the flood-gates for massive American oil exports that will make the oil price fall even lower. The U.S. still imports a lot of oil, and will go on doing so for years. He has only authorized the export of a particular kind of ultra-light oil that is in over-supply on the domestic market; only about one million barrels of it, with actual exports not starting until next August.

If this is a conspiracy, it’s a remarkably slow-moving one.


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PostPosted: Mon Jan 05, 2015 11:16 pm
 


N_Fiddledog wrote:
Surely you don't actually believe Saudis just woke up one morning and said "Let's drive down the price of oil, just because..."


Actually they did.

They have been trying for close to a decade to get back the market share they lost to us after the Americans decided oil sands oil was better than Saudi oil a little while after 9/11.

IIRC Ethical Oil by Ezra Levant talked about some of the methods they used to try and get rid of us as a competitor. While I don't care much for Levant, I'll admit that book had some very compelling arguments and facts.




N_Fiddledog wrote:
You give no reason why the Saudis and their buddies might do this.


Why do I need to do this - your own article did it for me.

N_Fiddledog wrote:
As for Saudi Arabia, government officials have made it abundantly clear they are willing to keep on pumping oil and to let prices fall further. It’s part of an urgent gamble that lower prices will kneecap those rivals that have usurped OPEC’s dominance, such as the Canadian oil sands and America’s fracking industry, which both have higher operating costs than Saudi producers. At the end of December, Saudi oil minister Ali al-Naimi said he won’t budge from this commitment to maintain output and defend Saudi Arabia’s market share, even if oil prices fall to US$20 a barrel.


They want to get rid of the competition - oils sands and shale oil.

Still, that doesn't support the National Review's conjecture that American oilmen caused this drop in prices largely by themselves.

Tangentially, I can see a correlation (they started fracking and cut even more market share away from Saudi Arabia and it became the proverbial straw that broke the camel's back), but it was oil sands oil that displaced the Saudis in the first place over a decade ago.

If the National Review should be thanking anyone, it should be Canada, not the johnny-come-latelys in North Dakota.


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PostPosted: Tue Jan 06, 2015 1:27 am
 


Let's see if I follow you.

You say they claimed that competition initiated an incentive for the previous holders of the monopoly on oil pricing to react. In this case the guys keeping oil prices high were the Arabian states. There was no competition. Then there was. These Arab oil state guys reacted to the competition by increasing oil production - thus dropping oil prices. Supply and demand, right?

In other words the article was saying free enterprise was responsible.

So you admit the article said that, but then you say no wait, they didn't say that. They said only American oilmen were responsible. So the article did say it was the free enterprise system that won the day, but it also didn't say that. Is that what you're saying?

I don't follow you, but to me it's clear. The article is claiming the free enterprise system did what it's supposed to do. It supplied competition and the market reacted. Free market capitalism saved the day again.

Doesn't matter anyway. The important thing we know for an absolute fact is, the drop in oil-prices had absolutely nothing to do with Obama and the Progressive anti-oil agenda. We're agreed on that, right? Because to me that's the main point.


Last edited by N_Fiddledog on Tue Jan 06, 2015 1:49 am, edited 2 times in total.

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PostPosted: Tue Jan 06, 2015 1:47 am
 


And, it was not just the National Review expressing the belief innovative new methods of getting oil were forcing the Arabs to compete.

Macleans also thought so. That article is also on the previous page.

Quote:
As for Saudi Arabia, government officials have made it abundantly clear they are willing to keep on pumping oil and to let prices fall further. It’s part of an urgent gamble that lower prices will kneecap those rivals that have usurped OPEC’s dominance, such as the Canadian oil sands and America’s fracking industry, which both have higher operating costs than Saudi producers.


But if you want to say it was not specifically American oil men setting lower prices, but rather the natural flux of behaviors possible within the capitalist system I don't think the National Review or Macleans will have a problem with it. I know I won't.


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PostPosted: Tue Jan 06, 2015 10:32 am
 


N_Fiddledog wrote:
Let's see if I follow you.

You say they claimed that competition initiated an incentive for the previous holders of the monopoly on oil pricing to react. In this case the guys keeping oil prices high were the Arabian states. There was no competition. Then there was. These Arab oil state guys reacted to the competition by increasing oil production - thus dropping oil prices. Supply and demand, right?

In other words the article was saying free enterprise was responsible.

So you admit the article said that, but then you say no wait, they didn't say that. They said only American oilmen were responsible. So the article did say it was the free enterprise system that won the day, but it also didn't say that. Is that what you're saying?

I don't follow you, but to me it's clear. The article is claiming the free enterprise system did what it's supposed to do. It supplied competition and the market reacted. Free market capitalism saved the day again.

Doesn't matter anyway. The important thing we know for an absolute fact is, the drop in oil-prices had absolutely nothing to do with Obama and the Progressive anti-oil agenda. We're agreed on that, right? Because to me that's the main point.


It's obvious you are misunderstanding me.

I'm not taking exception to the tone of the article, but its content, which I think I more than adequately explained is erroneous on many facts.

If you don't believe me take some time and re-read the NR article. There is no mention of the oilsands nor production anywhere but in the USA. I expect that kind of rah-rah bias from right-wing American sources, but you are apparently oblivious to them. Too much kool-aid I guess...


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PostPosted: Tue Jan 06, 2015 11:22 am
 


No it's not that I don't understand you. It's that you don't understand the two articles.

The first paragraph of the first one makes it clear.

Quote:
Even with renewed demand from a global economic resurgence, energy prices continue to fall. The U.S. has suddenly become the world’s largest combined producer of oil and natural gas.

That fact — along with a desire to weaken hostile Iran and Russia — has prompted the oil-rich Gulf sheikdoms to keep pumping oil even as the price falls. In their game of petro-chicken, the desperate sheiks hope that either their poorer enemies will run out of cash or that fracking in the U.S. will become unprofitable and cease.


If you don't understand that what's being described there is a process not a single event, I can't help you.


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