Goodbye, OPEC
America is on the way to energy dominance
https://www.washingtontimes.com/news/2018/apr/29/goodbye-opec/
Posted on 05/01/2018 12:51:15 PM PDT by Kaslin
We are in the process of switching over to the Summer blend. The additives, etc. are more expensive.
This is at least one cause.
Analysts are calling for higher prices going forward compared to past years.
“Moreover, what good does it do to export oil if it keeps the supply down and the prices up in the US?”
It doesn’t “keep the supply down”. Just the opposite.
The price of oil has little to do with supply/demand and much more to do with the supply/demand and value of the dollar...
... the dollar has been tanking vs. the Euro since late 2016.
THAT’S why oil prices are “up”.
(real oil prices don’t change that much, but the value of the dollar does.)
If tomorrow we went back on the gold standard, oil prices would tank.
“So with this surge of shale products, why are our gas prices surging?”
The dollar is sinking.
“Maybe the U.S. should now be chairman of OPEC.”
We should put tariffs on all OPEC oil.
What would a sinking dollar have to do with domestic gas prices. Imported oil, yes. But we’re in the grand scheme of things a net exporter.
“What would a sinking dollar have to do with domestic gas prices.”
Kind of a silly question. Gas comes from oil, oil prices are global.
“Imported oil, yes. But we’re in the grand scheme of things a net exporter.”
No. We are a net exporter of ‘petroleum products’ which includes NatGas, (which has little to do with US gasoline prices), not crude oil.
I thought so too, but (former) FReeper thackney (sp?) modified my thinking. It seems that Houston’s refineries are optimized for Saudi oil - hence, those refineries are of more economic utility processing Saudi oil than they are when processing shale oil. That makes discouraging import of Saudi oil somewhat of a foot-shooting exercise.It is perhaps more clear that we should drain the Strategic Petroleum Reserve (since it’s a lot less “strategic” now), selling it now at what we presume is a high price. In expectation of buying it back at a lower one as “Drill, Baby, Drill” works its magic. In fact, the government might do well to use the money to buy oil futures, guaranteeing US producers a profitable market for oil production at the start of the oil price crash we want them to induce by “over” production in reaction to the price spike.
“I thought so too, but (former) FReeper thackney (sp?) modified my thinking. It seems that Houston’s refineries are optimized for Saudi oil - hence, those refineries are of more economic utility processing Saudi oil than they are when processing shale oil. That makes discouraging import of Saudi oil somewhat of a foot-shooting exercise.”
Interesting, yes I think Saudi oil is very high quality/easy to refine, compared to shale.
In terms of putting tariffs on OPEC oil, for me, it’s more a political than economical issue. We’re sending our wealth “over there” and “over there” is a bad place with bad people who want to destroy us. So let’s build refineries (we need more) that can handle our domestic needs and keep the wealth here.
“It is perhaps more clear that we should drain the Strategic Petroleum Reserve (since it’s a lot less “strategic” now), selling it now at what we presume is a high price. In expectation of buying it back at a lower one as “Drill, Baby, Drill” works its magic. In fact, the government might do well to use the money to buy oil futures, guaranteeing US producers a profitable market for oil production at the start of the oil price crash we want them to induce by “over” production in reaction to the price spike. “
Good idea, I doubt the gov is smart enough to act on it. And I think you’re right, oil prices are destined to fall and stay low, so long as we’re producing and growing production.
Right now, I think Soros is doing everything he can to crash the dollar to make gas prices rise here in the US, to hurt Trump.
Although I admit, that’s pure speculation on my part.
I have the opposite impression - that shale oil is very light (has to be to squeeze thru small pores/cracks in the shale) and probably is easier to refine than the Saudi product. If I’m right in that assumption, Houston refineries could easily refine shale oil but it would not exploit the full capability of those refineries.If that’s the way of it, Houston can outbid other places for Saudi oil and still make a profit selling the refined product from that oil cheaper than it could sell product from shale oil because the shale oil would command a higher price.
Hence - again assuming that my impression is right - impeding the import of Saudi crude to Houston would put upward pressure on US refined product prices. It seems ironic that economic rationality could favor importing Saudi oil and exporting shale oil at the same time - but there it is. Under the assumed conditions, the worst thing to do would be to artificially inhibit export of US oil, because sending that oil to its highest use (in or out of the US) is our (only) lever to push down the world price for oil.
And any downward pressure on the world price of oil helps the US and its allies, and hurts Russia and OPEC.
America is on the way to energy dominance
https://www.washingtontimes.com/news/2018/apr/29/goodbye-opec/
Did you read the article?
Good luck.
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