Posted on 02/10/2018 10:43:27 AM PST by Oatka
[Reuters] Bit by bit, the U.S. petroleum industry is turning world oil markets inside out.
First, sharp drops in U.S. imports of crude oil eroded the biggest market that producers like OPEC had relied on for many years. Now, surging U.S. exports – largely banned by Washington until just two years ago – challenge the last region OPEC dominates: Asia.
(Excerpt) Read more at gcaptain.com ...
We export raw materials to the ChiComs and they ship us finished goods. Sounds like we are third world country now. Lose - lose.
I realize that there may be some economic/geopolitical reason for doing so, and if there is, someone please explain it for me -- but wouldn't it be better for our country (and cheaper for U.S. oil companies) to sell that oil right here at home, hopefully driving down domestic fuel prices? Instead of selling to a country that is not really our friend on the world stage.
“We” (i.e., the oil companies) are selling oil to china because the price, even net of shipping, is higher than “we” can get in the US. It is no more complicated than that.From a shipping cost POV it made more sense to export Alaskan oil to Japan, and for the East Coast to import oil from the Middle East. The US embargo of oil exports was a price extracted by the Dumbocrats for allowing construction of the Alaska Oil Pipeline. It had the effect of preventing the sale of Alaska oil to Japan, making Japan more dependent on Middle East oil exports. There is your geopolitical connection.
Now that the US allows export of oil, the US price is the world price - and vice versa. The marginal increase in the US price means more drilling of oil in the US, and more drilling in the US puts downward pressure on the world price. And lest we forget, the US shale fracking revolution is still young - meaning that the cost of fracking is readily driven lower by innovation which derives from more and more experience. Moore’s Law is an extreme example of the phenomenon, but far from the first or only example of price dropping as production experience doubles and repeatedly redoubles.
Note, BTW, that there is oil and then there is oil. The Houston refineries are designed for heavier crude than what comes from a fracked well. That may or may not mean that those refineries cannot refine fracked shale oil as well or better than they can the heavier Saudi oil - but the crucial point is that Saudi oil is worth more in Houston than in a lot of other refineries worldwide. This means that forbidding imports of Saudi oil (“energy independence," don’t you know) would be an economic hit to Houston’s refineries, forbidding their highest use. Instead, it makes sense for the US to import Saudi crude and export US crude and/or refined products.
My check went from $120/mo to $220 this month. I’m now officially an oil barron.
But hey, I’m not throwing rocks, keep it up.
Oh, and might I add;
I’m more than confident Goldman is already offering the kingdom very attractive lines of credit towards their modernization efforts given Prince Salman (the heir apparent) is all but a dictator overseeing the project.
These “efforts” surely include dividends and capital gains.
Dollars to donuts the package Goldman Sachs is offering the kingdom is nothing short of King’s ransom compared to the chump-change they loaned to Mexico. Goldman thought they were going to lose their ass when talk on the street was a default on the loan to Mexico.
Goldman got the US Gov to cover any default from Mexico with US tax payer dollars.
The Kingdom is going bankrupt.
Exactly. And the kingdom is also moderating from from ultra strict, right-wing Wahhabism to a middle of the road Muslim state. They’re actually gonna let women drive!
And if there were no other accomplishments of the Trump administration - there are many others, of course - this alone would rank Trump as No. 1 president in the last 70 years, in my book.
Can anyone recommend some oil stocks I could buy to profit form this?
Yeah and you can jack up my propane price in the process. Lose - lose.
Gee, some common sense on a Freeper thread. How unusual.
We need an IMPORT tariff on oil not an export tariff. Export tariffs are unconstitutional anyway.
I would think so. From the article:
The U.S. supplies will help reduce China’s huge trade surplus with the U.S. and may help to counter allegations from U.S. President Donald Trump that Beijing is trading unfairly.
“With the Trump administration, the pressure on China to balance accounts with the U.S. is huge… Buying U.S. oil clearly helps toward that goal to reduce the disbalance,” said Marco Dunand, chief executive and co-founder of commodity trading house Mercuria.
As the energy exports rose, China’s January trade surplus with the United States narrowed to $21.895 billion, from $25.55 billion in December, according to official Chinese figures released on Thursday.
Can we exchange debt for oil?
Nat gas prices remain so low. I wonder why. Have had exceptionally cold winter.
Your answer is helpful and explains what I wanted to know. Thank you.
From the gist of the article, "Yes".
Ping
I'm in Pa and our STAT-OIL dropped tremendously.
I suspect the commie governor we have and his taxing of those greedy gas drillers/frackers.
Oil is a small by product of the NG industry.
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