CHAT Question about Oil Price

twincougars

Deceased
My wife and I were discussing the price of gasoline going down by leaps and bounds. She looks to me for explanations, so I offered this, saying that it is just an assumption, but I could be wrong. I told her I had heard that Russia could not make their payroll if the price per barrel went below a certain level (forgot what). I had read this in a post to some forum. I said that Russia and some other countries wree conspiring to go off of the petrodollar, and that would have a devastating effect on our economy. We are in a cold war situation with Russia and doing various things to "punish" Russia (supposedly for the Ukrainian situation, but I think that is BS). So the US, with the help of its ME allies, conspired to lower the oil prices to squeeze Russia. Now this may be totally off the wall, but I'd like some input from those of you who know a lot more about the situation than I do.
 

Dozdoats

On TB every waking moment
The actual target of the manipulated decline in the price of oil is IMHO the US shale oil producers. The Saudis and others are trying to make the production of shale oil unprofitable and thereby destroy the competition it offers.

Time will tell. Meanwhile, enjoy it while you can - it will not last.
 

pirate9933

Veteran Member
The actual target of the manipulated decline in the price of oil is IMHO the US shale oil producers. The Saudis and others are trying to make the production of shale oil unprofitable and thereby destroy the competition it offers.

Time will tell. Meanwhile, enjoy it while you can - it will not last.

I live on the edge of the Eagle Ford oil, shale and natural gas deposit. Starts just south of San Antonio and goes on for miles. It's one of the largest deposits south of prudhoe bay. Once the price goes below about $40 a barrel, it stops being cost effective to get the oil out via fracking and so on. The HUGE amount of dollars in oil loans will then go unpaid. The screwing of Russia is just an added benefit to us. Basically the arabs are screwing the U.S., Russia, China etc.
 

Rastech

Veteran Member
Demand has also fallen massively since 2008. At that time there was a shortage of refining capacity. Now, just in the UK we have closed four oil refineries.

Also QE and TARP was basically free money for the banks to play the stocks and commodities markets (so bubbles, bubbles, and more bubbles).

The free money tap has now been turned off (so bubbles will deflate).

I remember a few years back, the Saudi oil minister at the time saying the real price for oil should be about $12 a barrel.

Frankly, with synthetics now become extremely viable (via F-T and Plasma Gasification for example), I don't see expensive oil having much of a future.

With a hyper deflationary crash, oil could even get to be under $5 a barrel (which still doesn't mean many people would be able to afford it).
 

TXKajun

Veteran Member
I agree with dozdoats (OPEC trying to kill fracking) plus I agree Russia is collateral damage like pirate said. Butt! (And it's a big BUTT!! LOL), someone's gonna make a ton of $$$ (started to say a whole buttload of $$, butt that was too many butts. :) )when the price starts rising, finally. Last time oil crashed down, it ended up going up to, what, $120+/bbl? Wonder what the next top will be?

Anywho, I sold my old Ford Ranger that got 14 mpg in town and 19 on the highway and bought a 2013 Camry that gets 28 mpg in town and 35 on the highway. Bought a few oil stocks, too, so I'm about as ready as can be for the future increases.

I keep in mind, what goes down must go up. And vice-versa.

Kajun
Spelling intentional.
 

homecanner1

Veteran Member
Gov. Cuomo just banned Fracking in NY State, deserves its own thread elsewhere


N.Y. / REGION

Cuomo to Ban Fracking in New York State, Citing Health Risks
By JESSE McKINLEYDEC. 17, 2014

Gov. Andrew M. Cuomo of New York Credit Nathaniel Brooks for The New York Times
ALBANY — The Cuomo administration announced Wednesday that it would ban hydraulic fracturing in New York State, ending years of uncertainty by concluding that the controversial method of extracting gas from deep underground could contaminate the state’s air and water and pose inestimable public-health risks.

“I cannot support high volume hydraulic fracturing in the great state of New York,” said Howard Zucker, the acting commissioner of health.

That conclusion was delivered publicly during a year-end cabinet meeting called by Gov. Andrew M. Cuomo in Albany. It came amid increased calls by environmentalists to ban fracking, which uses water and chemicals to release natural gas trapped in deeply buried shale deposits.

The state has had a de facto ban on the procedure for more than five years, predating Mr. Cuomo’s first term. The decision also came as oil and gas prices continued to fall, in part because of surging American oil production, as fracking boosted output.


New York Towns Can Prohibit Fracking, State’s Top Court RulesJUNE 30, 2014
Still Undecided on Fracking, Cuomo Won’t Press for Health Study’s ReleaseDEC. 16, 2013
The decision has been fraught for Mr. Cuomo, a Democrat.

In June 2012, he flirted with approving a limited program in several struggling Southern Tier counties along New York’s border with Pennsylvania. But later that year, Mr. Cuomo bowed to entreaties from environmental advocates, announcing instead that his administration would start the regulatory process over by beginning a new study to evaluate the health risks.

As months and years passed, the governor repeatedly suggested that the Health Department’s report was near completion, but its findings did not surface until Wednesday.

The delays angered environmentalists and oil companies alike. Advocates for fracking have argued that it could bring jobs to economically depressed areas atop the Marcellus Shale, a gigantic subterranean deposit of trapped gas that extends across much of New York State, Pennsylvania and West Virginia.

But the governor has also faced strong opposition from groups worried about the effects of fracking on the state’s watersheds and aquifers, as well as on tourism and the quality of life in small upstate communities.

Dozens of towns and cities across New York have passed moratoriums and bans on fracking, and in June, the state’s highest court, the Court of Appeals, ruled that towns could use zoning ordinances to ban fracking. Opponents have also consistently protested at the governor’s public events and during his successful re-election campaign, where his Republican opponent, Rob Astorino, called for legalizing fracking.



http://www.nytimes.com/2014/12/18/n...-new-york-state-citing-health-risks.html?_r=0
 

Dozdoats

On TB every waking moment
Missed seeing it before...

Video worth watching :

http://finance.yahoo.com/video/t-boone-pickens-where-oil-014100777.html

T. Boone Pickens on where oil prices will settle

Mon, Dec 15, 2014 8:41 PM EST 6:08
Fox Business Videos

Oil and gas tycoon T. Boone Pickens and FBN’s Neil Cavuto discuss the outlook for oil prices.
=========================

A high-points transcript of TBP's comments for those who can't do video:

Don't get too excited over plunging oil prices, there comes a point of diminishing returns.

There's too much oil ... enjoy this while it lasts ... demand is down by half due to global slowdown ... there will be a big buildup in inventories first quarter next year, and prices are seeing that ... middle of next year, inventories will start to decline and prices will start going back up ... back to $90/100/barrel in 12 to 18 months ... rig counts are going down ... this is an oversupplied market, and it's driving prices down ... it isn't OPEC that is refusing to cut production, it's the Saudis, and they are making enemies hourly including OPEC countries.
 

kochevnik

Senior Member
Everything you need to know is in this chart. You'll see a million theories, all bullshit. The traders control the price of oil - the trading market is many multiples of the actual physical market. The same guys that have been screwing with the stock market for many years have also been using that free money to screw with the oil markets.

Hence oil at a low of $33 and and a high of $147 BOTH during the year 2008 - when nothing changed as far as supply and demand.

They move it up and down because they make money every time it moves.


Supply and demand have nothing to do with it. Supply has exceeded demand since 2008 and oil did nothing but stay high.

You could 'slightly' argue that politics have to do with it, but someone has to move the market by buying and selling and politics is in no way as interesting to traders as earning money.

And as Dennis said, there have been multiple threads covering all this in the last 2 weeks :)
 

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