Posted on 11/27/2014 3:06:00 PM PST by TigerLikesRooster
Oil prices in freefall as OPEC fails to agree output cut
by Geoffrey Smith @Geoffreytsmith November 27, 2014, 11:31 AM EST
Oil futures fall nearly 8% to their lowest in five years as Saudi Arabia tries to squeeze U.S. shale industry.
Oil prices fell to their lowest level in over five years Thursday as the cartel that produces one third of the world’s output failed to agree on measures to tackle the current glut.
In what had been billed as their most important meeting in decades, ministers from the Organization of Petroleum Exporting Countries agreed to keep their self-imposed output ceiling at 30 million barrels a day, but promised each other they would cheat less on their agreed quotas.
(Excerpt) Read more at fortune.com ...
P!
Mr greenie isnt gonna like this a bit
This is great, prices drop lower and lower. Guess what America still produce oil because eventually the bastards will stop producing and selling and here in America we keep going on. Russia is losing millions because of the oil issue. So the Russians will strive to cause problems because there supplies will be depleted as they cannot be profiting if the price drops and drops. The cost of Ukraine and Crimea are devastating the Russian economy. Lets face it Russia and the Arabs are toast.
Pfffht.
Short memories. Oil bottomed at $35 a few years back and the effect on our oil production was temporary and minimal. My nat gas royalty checks went down and the well was shut in for a couple months.
I was fine with that. I’d rather they produce the gas at a better price, in the meantime it’s money in the bank.
This won’t last too long, there are other countries that will hurt much more than we will. In the meantime Americans can enjoy more disposable income.
The people panicking are the pushers of wind and solar. They just got a lot less competitive.
It’s kind of like those “we will rebuild” jokes after a 2.7 level earthquake.
This is all strategic.
The big guns in OPEC are looking to kill off the smaller producing entities in the US and other places by lowering the prices.
The smaller guys must have oil at $90-$100 to be profitable. OPEC can withstand some temporary pain while they go bankrupt, and they will be the last one standing when the dust clears. When you are a big monopoly, you have flexibility when it comes to how you wield your power.
Conflict free oil is the answer.
The US Dollar index is up at 88.00 and hasn’t been that high since June 2010.
Gold is less than $1200/troy oz. and silver about $16.50/oz.
The fact that Obama didn’t interrupt the Macy’s parade to claim credit for this singular bit of positive economic news in his 6 year stretch of misery is proof positive that he’s seething about this.
Oil is too important a commodity to allow boom / bust cycles do harm.
We fight wars over oil.
Let’s stabilize the price of oil so we don’t have to fight these wars in the future.
Someday, our military and transportation will not use as much oil, but until then we have to ensure a price environment friendly to producers.
I can hear the gnashing now. Government subsidies to the wealthy etc. But would you rather go to war?
You are correct. It is a significant lack from the White House. It was not supposed to happen this way.
I suspect they thought the unrest in the Middle East would disrupt supplies and cause oil prices to skyrocket, helping destabilize the U.S.
Didn’t happen. God’s plans are not Man’s plans...
Well good, perhaps the ME funding of Islamic terror will dry up!
Not good. If the oil price is pushed lower, what do you think Russia will do? They will create a military crisis which will cause a rise in oil and gold as a means to boost their economy and crash the Western markets.
I don’t think playing chicken is a good thing.
There will be many defaults to sour investors against reinvesting in fracking in the future. Startup costs are also high in shale plays.
They can't destroy that, and be the last ones standing.
/johnny
Obama will up the foreign aid to those countries probably
Oil companies don't go to war. Governments do.
/johnny
Ha! {:0)
Any serious study on the history of global oil supply and pricing will reveal that there has ALWAYS been a boom and bust cycle ever since Edwin Drake drilled the first well.
The Texas Oil Boom of the early 20th century took prices down to $0.03/bbl at one point.
http://www.texasalmanac.com/topics/business/oil-and-texas-cultural-history
In my lifetime, the post WWII development of Middle East oil fields kept prices low until they copied the Texas Railroad Commission model and created OPEC.
You may as well try to repeal the law of gravity rather than the laws of economics.
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