Posted on 10/06/2015 3:00:59 PM PDT by Hojczyk
Here's the rub: A new normal price of even $60 remains economically devastating for OPEC at large, for the Middle East, and, in particular, for Russia. But a $60 price (it's still $45 at press time) would re-ignite a profit-seeking land rush in America's shale fields. Russian oil experts likely remember that the rise of America's shale began when oil was below $60. And it was wildly profitable back then with technology and techniques that were half as efficient as those now available.
Thus the emerging global petroleum pricing problem for Russia is severely constrained by the sheer quantity of oil that hundreds of American businesses can produce at prices that are unacceptable to the former swing suppliers. The U.S. has reversed, in short order, its four-decade slide in production, and is now back to the former peak oil production level of 1970. And far more is possible.
And worse yet for revenue-hungry Russia and OPEC, low oil prices are not economically fatal for America at large. Despite the fact that the shale boom has kept the U.S. out of a sustained recession since 2008, the oil and gas sector comprises less than 10 percent of the total U.S. economy. But for Russia and OPEC nations, oil accounts for 25 to 50 percent of each country's entire national GDP, and from 70 to 95 percent of all exports.
Of course, low prices can drive financially challenged companies into bankruptcy or into the hands of acquirers. But America has seen this kind of "creative destruction" before. U.S. businesses are already high-grading the players, the assets and the technologies; they are poised to re-ignite an oil (and gas) production boom in an emerging Shale 2.0 revolution. But this boom can't change one key geopolitical fact: The Middle East and Russia are selling to oil-importing nations. America is not.
It's time for the U.S. government to send a powerful message to the world. Policies need to be forged to support more American production. And collaterally, Congress needs to move forward on legislation that will end the misguided decades-old law banning American firms from selling oil into world markets.
We are far past the time to acknowledge the realities of geography and oil technology. Let's use the advantages the U.S. has in both.
NO
No, but their influence just went up a lot.
YES!
The biggest problem with Obama is that he thinks oil can be easily replaced by windmills and solar panels. He thinks this is all obsolete. He doesn’t see the middle east with the same eyes China and Russia do.
Maybe people should stop thinking about oil as a commodity and investment and start thinking of it as a tool ... a way and means to manufacturing (f’rinstance) ... transportation
Hell, he doesn’t see America with the same eyes China and Russia do. He sees us as an arrogant superpower which needs to be taken down a few pegs. They still see as a potentially formidable foe if we only had the right leadership.
If solar and wind energy were economically feasible, don’t you think every house in this country would have had it installed 50 years ago? The sad truth is that, by the time the homeowner has finally paid for the system and realize some fiscal benefit...its time to replace it.
http://www.freerepublic.com/focus/f-news/3344773/posts
Russia ready to meet OPEC to talk oil prices CNBC ^ | Oct 5, 2015 |
Holly Ellyatt Posted on 10/5/2015 8:13:52 AM by thackney
Russia is ready to meet with members of the Organization of Petroleum-Exporting Countries (OPEC) -- as well as non-member oil producers -- to discuss the situation facing global oil markets, according to the country's oil minister.
Alluding to a possible meeting with the 12-member oil producer group OPEC, Energy Minister Alexander Novak said Saturday "if such consultations are to happen, we are ready to take part," Reuters reported, although he did not say when and if such a meeting may take place. In addition, he told reporters that a meeting between officials from Russia and Saudi Arabia was being planned for the end of the month to discuss energy issues and other projects.
Following the report, oil prices rose on Monday.
Benchmark Brent crude was trading 70 cents higher at $48.72 a barrel Monday morning after ending up 44 cents on Friday.
U.S. crude was 57 cents higher at $46.11 a barrel after settling up 80 cents.
Asked whether any meeting between Russia and OPEC could occur in the forthcoming months, the organization would not make any official comment, but the Russian and Saudi Arabian energy ministries were preparing remarks for CNBC.
The comments seem to contradict one of Novak's energy ministry colleagues, however, who said on Friday that he was not aware of any such meetings and that Russia would stick with its plans not to cooperate with OPEC.
Russia's economy has not only been hit hard with the fall in oil price. International sanctions imposed on the country for its annexation of Crimea and role in the pro-Russian uprising in Ukraine have also seen it isolated from the world stage in terms of exports.
As long as those policies are basic regulations, taxes and fees similar to other industries and no subsidies, okay.
And collaterally, Congress needs to move forward on legislation that will end the misguided decades-old law banning American firms from selling oil into world markets.
Absolutely. Export our expensive light sweet while import cheap heavy sour that our refineries are already optimized to used. More BTU's per barrel for us, more drilling and production for us, lower gasoline prices, more world supply.
Obola has no intention of advancing the interests of the United States in any way, shape, or form.
I hope the russkies nuke the saudis. We should have on 9/12.
Not yet but it wouldn't surprise me if that is not on Putin's Bucket List.
Actually, it may not be a bad thing. We would simply be forced to develop our own resources.
OPEC is a toothless tiger...
None of their members follow the pricing agreements and cheat all the time...
One virtue to the American economy with choking off most of the flow of oil from the Middle East, is that the resulting higher prices finally create the total oil independence long sought for the US and North America.
In fact, if the legal restrictions on export of US oil to the world market were repealed, we could become a net oil-EXPORTING country, and sharply decrease our balance-of-trade deficits, simultaneously.
In fact, the mix of “fossil fuel” energy sources should be shifted from petroleum to natural gas, which we are producing in HUGE abundance right now. We could ship natural gas in the form of LNG to ports all over the world, perhaps in many instances more cheaply and reliably than the localities most dependent on these supplies. Or by using reforming techniques already developed and now coming on line, export some very high-grade finished hydrocarbon fractions ready for direct consumption, again using this vast supply of natural gas.
We are not going to replace hydrocarbon fuels in our energy mix for at least another century. And maybe even longer.
“..Obola has no intention of advancing the interests of the United States in any way, shape, or form.”
Yes, and just watch what happens if a Republican wins the White House in 2016. It will be ultra-Anti-American SCORCHED EARTH for America making today’s horror story look like child’s play. America’s domestic enemy NUMBER ONE.
And the Chinese are there, trying to have an oil source that doesn’t sell to the US and Europe.
Either way, ISIS must be taken out. We had our chance and blew it. We are so blind and inept that we think it is merely a battle of supporting the correct terrorists. It is just embarrassing to be an American in 2015.
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