Posted on 10/26/2014 7:02:45 AM PDT by thackney
We have heard the story before: political turmoil in the Middle East, disruption of global oil supplies by members of OPEC.
In the past, the unrest in Iran would be causing oil prices to spike up. Instead they have been falling by more than 25%. Gas prices at the pump have fallen to less than $3 a gallon in many markets.
That's quite a change from the past 40 years, when OPEC and other foreign oil producers have wielded oil as a political and economic weapon to slow down and even cripple the U.S. economy.
Saudi Arabia was by far the world's biggest producer. In those years we were highly dependent on foreign oil and captive to OPEC supply disruptions, which led to a wild ride of oil price gyrations.
No more. OPEC is becoming a toothless tiger.
And the underappreciated reason for this bullish turn of events is the U.S. energy revolution and the technologies that made this all possible.
Thanks to horizontal drilling and other smart drilling technologies, we have unlocked a treasure chest of shale oil and gas and other unconventional domestic sources, so America now has an almost unlimited supply.
My company, Continental, has been a major player in drawing oil and gas from the Bakken Shale in North Dakota and the South Central Oklahoma Oil Province (SCOOP), where we have created tens of thousands of jobs and driven the unemployment rate to the lowest in the country.
Meanwhile, oil and gas output in Texas, Oklahoma, West Virginia and Pennsylvania has more than doubled in six years.
What all this means is that America is no longer a bit player in global energy production. Now our country is well-positioned for energy independence by the end of the decade and then for world energy supremacy for decades....
(Excerpt) Read more at news.investors.com ...
The problem as I see it for OPEC countries is they don’t diversify the investment of their oil profits by putting in other business to employ people. When you sit back and just support the people from oil profits and they all sit home and do nothing thinking “hey we have oil, why work”, when the oil price bites the bullet, you’re in deep dodo. If you have sand, put in a glass plant. build refineries and export the final product. Do anything with those oil profits to employ people and not giving it all for welfare support and market investing. Any country that’s dependent on a single product is very vulnerable.
We import almost as much crude oil as we produce ourselves.
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_m.htm
the Saudis capable of producing over 10 million barrels per day they can still control the price of crude to a certain extent.
Saudi is the only one that makes significant cuts in production to raise prices. Other OPEC countries will make cuts sometimes to support higher prices but not as much.
I have been told that the Saudis are pushing crude prices down
Saudi, Iran and Kuwait have all lowered price to a discount from the Oman trading exchange.
They blame their current high rate of production, near ten million barrels per day I have heard on not wanting to lose market share but in reality its the above.
If you are asking what I think is Saudi's motivation, international politics are not my specialty. But Saudi sells oil to make money to pay for everything they spend money on. Maximizing that is probably their only goal, but they do have a long term viewpoint.
Huge? That would not be my description. Not as a comparison to global rates of oil production.
I understand they area they control used to produce 350,000 bpd and now produces 50~60,000 bpd. Removing oil from the market will put more pressure on raising prices than selling a portion of that production at discounts.
I don't see any way that discounted oil, through illegal channels reduces global prices. In total, I see their actions reducing global supply and increasing prices, slightly.
Supply is down by their actions. The fact that your neighbor buys a stolen TV doesn't affect what you will pay for it.
When will we be hearing from THE ONE, taking credit for the drop in oil prices?
Thanks much appreciated.
From you first link I see where Alaska is down to half a million barrels per day. How many are necessary(BEP) to keep the pipeline viable? Any danger of losing the production from the pipeline?
Alaska North Slope Crude Oil Production
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MANFPAK2&f=M
Isn’t part of the problem that the enviros won’t allow a connector to the pipeline to come on line that could bump up production big time? I read somewhere there is all kinds of crude up there but the enviros keep suing to keep it from being drilled.
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