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Grevcon 8
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The Saudis are bankrupting their competitors that can't produce oil so cheaply. Once those competitors are bankrupt they'll raise prices and cash in. They're being very upfront about the whole thing. Capitalism at work and they're proud of it. Helps the rest of us in the short term too. Could really get the economy going so we can handle it when prices go back up too.
 

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Notice prices per bbl have hovered just over 50$, the point at which unconventional oil plays in the US become profitable. There's some speculation that Saudi is playing their hand boldly knowing that it won't effect the US, there allies, nearly as quick as Russia, African nations, Brazil, Venezuela etc.

At one tipping point, some countries or plays will be shut down, reducing the surplus vs. demand from a million or so bbls per day to a deficit. Immediately bringing prices back to 100$/bbl. to give perspective, the US produces ~9 million bbls/day. Unconventional being just less than half that. If we or anyone else in the world stop exploiting plays, that's more than enough to effectively create a fresh shortage to demand.
 

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Gitter Done!
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The oil companies will not let a good crisis go to waste, so when the EU, US, England, and saudi arabia put sanctions on russia the oil companies saw a way to squeeze in and get a lot of new sales in. Prices dropped to also put a pinch on putin and russia, the ruble has dropped in value and russians hurried to clean out the shelves of most stores.
Since it will take the romonov family and other billionaires to bail out russia since the IMF won't, russia is going into hyperinflation.

Now that Europe will buy its oil from other countries at a bargain price, its a sales pitch that is selling oil at a sale price. The oil will go back up again, but for now enjoy the low prices.
 

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The Saudis are pumping more gas to lower the price. They were getting stung by the surge in US production. Since US production is more expensive than theirs, they are hoping to cause us to produce less and keep buying theirs. Pure market capitalism.

This plays right into our hands politically as well. The sanctions on Russia are really starting to hurt since Russia's oil revenue has dropped dramatically. Ruble is in the toilet and swirling around.
 

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I think we are focused on the wrong thing with Russia. Russia isn't a huge oil producer but is the worlds largest exporter of Natural Gas. The impact of reduced oil cost doesn't impact Russia like the reduced rate per BTU in natural gas is. As of today, Natural gas is down by nearly 32%. Putin was using natural gas as a strangle point for Europe as they control nearly 80% of the flow to Eastern Europe. The reduced rate, in essence, neutered the great Russian bear.
 

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Sinner w/ a great Savior
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Oil prices are caught in a perfect storm. The dollar is up (way up) and not expected to fall any time soon, which makes for cheaper oil. Oil production is up and not expected to abate any time soon, demand is down globally and not expected to rise any time soon, and there are no serious Middle East crises to cause the price to spike.

Enjoy it while it lasts, because it likely won't. I expect it'll rise again in about a year. Thing is though, low prices are predicted to cause a 1/2 to 1 percent drop in United States GDP:
http://www.survivalistboards.com/showthread.php?t=375976
 

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gas & diesel prices

I got it for $1.87 gal. yesterday. Most places here are around $1.92.

Diesel is still $3.49 or so. What's up with that? Up until a couple years ago, diesel was always .10¢ per gallon more than regular gas.
Perhaps the demand for gas has fallen faster than the demand for diesel. Several weeks ago, Zerohedge had an interesting article on supply/demand curves.

When oil is refined (distilled), you get a fixed % of each type of fluid/gas, ranging from 'tar' to butane and everything in between. It's my understanding you can just choose to make less gas and make more diesel.
 

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The Saudis are bankrupting their competitors that can't produce oil so cheaply. Once those competitors are bankrupt they'll raise prices and cash in. They're being very upfront about the whole thing. Capitalism at work and they're proud of it. Helps the rest of us in the short term too. Could really get the economy going so we can handle it when prices go back up too.
once they are bankrupt?

when oil isnt economically recoverable they stop recovering it. when it is, they start right back up again.

so what you are saying is the saudis are selling their limited resources today, so the people they dont like can sell at a far higher price a little down the road.

that makes perfect sense... :rolleyes:
 

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Retired thinker
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Not to change the subject but what is the price of home heating oil? Last time I used it (about 4 years ago) it was around $4 a gallon and I dreaded the onset of winter. That hits many people, especially seniors on fixed income hard in addition to many businesses that rely on heating oil. I hope this short term bonanza has found its way to heating oil. Any info on that? I don't see anything on the news about it in my area.
 
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