Price of Oil

Off Topic Politics & World Issues
61

[quote]theuofh wrote:

[quote]jjackkrash wrote:

I don’t really have that big of the problem letting the Saudi’s burn through their reserves when prices are low.

[/quote]

I’m OK with it as well and looking forward to them being broke and friendless.

I’ve seen various theories speculating that Saudi Arabia’s reserves are declining. Either they are bluffing now, have some plan B options, or have a vast amount of oil left. The rulers are approaching senility currently, so I’m not going to pick among those options.
[/quote]

I’m no Saudi expert, but I’m under the impression they’re trying to radically transform their country. Could be an indication that reserves are declining and realizing that sitting on their asses and relying on foreign labor and intellectual capital isn’t going to cut it for eternity. Unless they want to go back to a tribal bedouin lifestyle, which would be perfectly fine by me. Less terrorists and less financing for terrorists.

62

What I’m interested in seeing is how this effects the dozens of LNG liquefaction and export projects either under construction or in planning phases. LNG supply contracts can get complicated and many times tied to crude oil prices. Narrowing oil-to-gas spread does not bode well for all of these projects. That in turn effect reduces volatility, demand, and prices for natural gas; which hurts producers and mid-stream companies. These LNG projects represent a large investment in the US economy as well as job creation. The energy markets are like the human body, everything is intricately related.

Not to mention the effects on natural gas liquids, which were/are booming in the USA but could see a decline b/c of crude price drops. Lots of projects from the 100s of millions to billions are being proposed right now to support the production/transportation/exports/consumption of NGLs, and lower crude prices puts all those at risk. Not that I’m complaining about my gasoline expenses b/c I commute a fair amount.

63

[quote]BPCorso wrote:
I agree with most of your post, though. I do want to point out that from what I’ve seen wholesale diesel prices at both the rack and trading hubs have been dropping a lot. I’m too lazy to compare percentages with retail gasoline but there’s been a marked decrease in diesel prices across the country. BUT retail diesel has not dropped much (although it has) relative to retail gas and wholesale diesel. But retail diesel prices aren’t all that important compared to wholesale diesel.[/quote]

It used to be for every gallon of gas they refined it threw off a gallon a diesel as a waste product. But now I suspect to get the low sulfer/clean diesel the refining process is different and more complicated than gas. I haven’t really looked into this though, but I know that shit sure doesn’t like to budge even when gas moves sharply and my truck takes 35 gallons every time I go fill up.

64

[quote]BPCorso wrote:

[quote]theuofh wrote:

[quote]jjackkrash wrote:

I don’t really have that big of the problem letting the Saudi’s burn through their reserves when prices are low.

[/quote]

I’m OK with it as well and looking forward to them being broke and friendless.

I’ve seen various theories speculating that Saudi Arabia’s reserves are declining. Either they are bluffing now, have some plan B options, or have a vast amount of oil left. The rulers are approaching senility currently, so I’m not going to pick among those options.
[/quote]

I’m no Saudi expert, but I’m under the impression they’re trying to radically transform their country. Could be an indication that reserves are declining and realizing that sitting on their asses and relying on foreign labor and intellectual capital isn’t going to cut it for eternity. Unless they want to go back to a tribal bedouin lifestyle, which would be perfectly fine by me. Less terrorists and less financing for terrorists. [/quote]

I think it would actually mean more terrorists. Terrorists are usually young men who can’t get a job or a girl or anything to look forward to. If the Saudi way of life collapsed there would be a lot more young men in that category.

65

Meh… I’ll chime in.

The majority of you were sitting here posting pictures of Putin without a shirt, making fun of Obama, now in hindsight what do you think?

Look at the situation now, and ask yourselves what the impact will be with the U.S. sanctions and Saudi Arabia saturating the market with oil, driving the price down so low people won’t fuck with shale?

Think about who has power in this particular situation… What does it mean that we are allies with Saudi Arabia, a nation that is an Islamic State and for the most part has it’s version of Sharia Law? You cowboys don’t seem to like the idea of being owned by the Saudi’s, what with them owning a good bit of Fox and all of our politicians dem and repub being in bed with them.

It’s good for us financially but it should tell us a different story about the world in general, especially about who wields power… A nation that is an Islamic State, that practices Sharia law is our strongest financial ally in the world. That right there is fucked. Especially being every time some shit happens with destabilization, there is some form of Islamic group ready to pounce with ideas of Sharia Law, backed by who fucking knows?

66

[quote]BPCorso wrote:

Not debating the point that the Saudi’s have a fuckton of easily extracted oil, but it’s important to note that countries like Saudi keep reserve information under lock and key.

Not like the USA or Canada where we have several organizations monitoring reserve levels on an annual basis as well as laws for energy companies to provide sensitive data to the government for tracking purposes. Our notion of Saudi reserve levels and cost of production is just a guess and the Saudi’s have every reason in the world to want people to believe their reserves are larger than what’s actually in the ground.[/quote]

However much they think they have this is what they choose to produce; attached graph is Saudi production. They feel confident enough to produce at current levels. Of course the Gulf states’ oil was critical in both World Wars - Stalin stayed on in Iran breaching his own agreement to remove forces. And they tried to use a choke on production as a means of economic warfare against the United States by OAPEC after Nixon sold some arms to Israel during the Yom Kippur War. During the Tanker Wars in the 80’s Iran blocked Iraq from exporting and the whole situation was unstable because of the radicalism of the Iranians and the desperation of the war effort(Iran-Iraq War).

67

And remember, a dollar in the family’s bank account is more valuable to the economy than a dollar in an oil company’s bank account. More likely to be spent quickly instead of going to a foreign investor.

68

[quote]Severiano wrote:
A nation that is an Islamic State, that practices Sharia law is our strongest financial ally in the world. [/quote]

Who ever said the US government had “our” best interests in mind?

People in government love power and it should be no surprise when they consort with barbarians and n’er-do-wells to advance themselves.

69

[quote]jjackkrash wrote:

[quote]BPCorso wrote:
I agree with most of your post, though. I do want to point out that from what I’ve seen wholesale diesel prices at both the rack and trading hubs have been dropping a lot. I’m too lazy to compare percentages with retail gasoline but there’s been a marked decrease in diesel prices across the country. BUT retail diesel has not dropped much (although it has) relative to retail gas and wholesale diesel. But retail diesel prices aren’t all that important compared to wholesale diesel.[/quote]

It used to be for every gallon of gas they refined it threw off a gallon a diesel as a waste product. But now I suspect to get the low sulfer/clean diesel the refining process is different and more complicated than gas. I haven’t really looked into this though, but I know that shit sure doesn’t like to budge even when gas moves sharply and my truck takes 35 gallons every time I go fill up.
[/quote]

Yea man, I only have a shallow understanding of petroleum products and really don’t have an idea why there’s such a disparity between price decreases for retail and wholesale diesel (note, I’m comparing ultra low sulfur to ultra low sulfur so apples to apples).

BTW, I wasn’t trying to be an ass by saying retail diesel prices isn’t that important compared to wholesale diesel. That was in response to a comment about how diesel is important to lots of sectors in our economy (mining equipment, farm equipment, etc). That diesel is purchased wholesale and in much greater quantities than retail diesel. Obviously doesn’t help people like you who use diesel for their personal vehicles and don’t have access to rack pricing.

70

[quote]SexMachine wrote:

[quote]BPCorso wrote:

Not debating the point that the Saudi’s have a fuckton of easily extracted oil, but it’s important to note that countries like Saudi keep reserve information under lock and key.

Not like the USA or Canada where we have several organizations monitoring reserve levels on an annual basis as well as laws for energy companies to provide sensitive data to the government for tracking purposes. Our notion of Saudi reserve levels and cost of production is just a guess and the Saudi’s have every reason in the world to want people to believe their reserves are larger than what’s actually in the ground.[/quote]

However much they think they have this is what they choose to produce; attached graph is Saudi production. They feel confident enough to produce at current levels. Of course the Gulf states’ oil was critical in both World Wars - Stalin stayed on in Iran breaching his own agreement to remove forces. And they tried to use a choke on production as a means of economic warfare against the United States by OAPEC after Nixon sold some arms to Israel during the Yom Kippur War. During the Tanker Wars in the 80’s Iran blocked Iraq from exporting and the whole situation was unstable because of the radicalism of the Iranians and the desperation of the war effort(Iran-Iraq War).
[/quote]

Yea, I’m generally with you. Especially re: using production as economic warfare. Even if the USA is cutting imports from the GCC, we still have a lot of allies that are dependent on it so it’s a delicate situation even if the USA ever achieves “north american energy independence”.

71

[quote]BPCorso wrote:

[quote]jjackkrash wrote:

[quote]BPCorso wrote:
I agree with most of your post, though. I do want to point out that from what I’ve seen wholesale diesel prices at both the rack and trading hubs have been dropping a lot. I’m too lazy to compare percentages with retail gasoline but there’s been a marked decrease in diesel prices across the country. BUT retail diesel has not dropped much (although it has) relative to retail gas and wholesale diesel. But retail diesel prices aren’t all that important compared to wholesale diesel.[/quote]

It used to be for every gallon of gas they refined it threw off a gallon a diesel as a waste product. But now I suspect to get the low sulfer/clean diesel the refining process is different and more complicated than gas. I haven’t really looked into this though, but I know that shit sure doesn’t like to budge even when gas moves sharply and my truck takes 35 gallons every time I go fill up.
[/quote]

Yea man, I only have a shallow understanding of petroleum products and really don’t have an idea why there’s such a disparity between price decreases for retail and wholesale diesel (note, I’m comparing ultra low sulfur to ultra low sulfur so apples to apples).

BTW, I wasn’t trying to be an ass by saying retail diesel prices isn’t that important compared to wholesale diesel. That was in response to a comment about how diesel is important to lots of sectors in our economy (mining equipment, farm equipment, etc). That diesel is purchased wholesale and in much greater quantities than retail diesel. Obviously doesn’t help people like you who use diesel for their personal vehicles and don’t have access to rack pricing. [/quote]

No offense taken. I choose to drive my truck for my daily because I love the ride and having access to 800 ft. lbs. of torque and I can afford the fuel costs. It still hacks me off a bit though how expensive diesel is when it should be cheaper than gas.

As an aside, my buddy has the exact same truck and cut out the diesel-fluid-exahust system, went to straight pipe, and chipped it. He literally gets 4 to 5 mpg better than me in comparable driving conditions, i.e., unloaded or loaded on the same road. I know because our families camp and road trip together. It doesn’t make sense to me that 10mpg loaded is more environmentally friendly than 15 mpg loaded, even if my system on paper looks “cleaner” because it throws out less particulate matter per gallon.

72

[quote]BPCorso wrote:

[quote]SexMachine wrote:

[quote]BPCorso wrote:

Not debating the point that the Saudi’s have a fuckton of easily extracted oil, but it’s important to note that countries like Saudi keep reserve information under lock and key.

Not like the USA or Canada where we have several organizations monitoring reserve levels on an annual basis as well as laws for energy companies to provide sensitive data to the government for tracking purposes. Our notion of Saudi reserve levels and cost of production is just a guess and the Saudi’s have every reason in the world to want people to believe their reserves are larger than what’s actually in the ground.[/quote]

However much they think they have this is what they choose to produce; attached graph is Saudi production. They feel confident enough to produce at current levels. Of course the Gulf states’ oil was critical in both World Wars - Stalin stayed on in Iran breaching his own agreement to remove forces. And they tried to use a choke on production as a means of economic warfare against the United States by OAPEC after Nixon sold some arms to Israel during the Yom Kippur War. During the Tanker Wars in the 80’s Iran blocked Iraq from exporting and the whole situation was unstable because of the radicalism of the Iranians and the desperation of the war effort(Iran-Iraq War).
[/quote]

Yea, I’m generally with you. Especially re: using production as economic warfare. Even if the USA is cutting imports from the GCC, we still have a lot of allies that are dependent on it so it’s a delicate situation even if the USA ever achieves “north american energy independence”. [/quote]

The Western Block needs energy and military security. Russia can use their energy dominance as leverage in their irredentist foreign policy schemes in Europe. North America is a different situation of course. There’s plenty of oil and gas in the US and Canada. But forces within the system are working to undermine the energy industry and divert vast sums from the public treasury to green schemes, Eco slush funds, lawsuits etc. The environmentalist movement is utterly subversive and regressive. I’m actually acutely aware of real environmental issues like deforestation, water quality and the extinction of species. But the environmentalists for the most don’t tackle these things. They’re a blight on the landscape.

73

[quote]on edge wrote:

[quote]BPCorso wrote:

[quote]theuofh wrote:

[quote]jjackkrash wrote:

I don’t really have that big of the problem letting the Saudi’s burn through their reserves when prices are low.

[/quote]

I’m OK with it as well and looking forward to them being broke and friendless.

I’ve seen various theories speculating that Saudi Arabia’s reserves are declining. Either they are bluffing now, have some plan B options, or have a vast amount of oil left. The rulers are approaching senility currently, so I’m not going to pick among those options.
[/quote]

I’m no Saudi expert, but I’m under the impression they’re trying to radically transform their country. Could be an indication that reserves are declining and realizing that sitting on their asses and relying on foreign labor and intellectual capital isn’t going to cut it for eternity. Unless they want to go back to a tribal bedouin lifestyle, which would be perfectly fine by me. Less terrorists and less financing for terrorists. [/quote]

I think it would actually mean more terrorists. Terrorists are usually young men who can’t get a job or a girl or anything to look forward to. If the Saudi way of life collapsed there would be a lot more young men in that category.[/quote]

Hmmmm… good point. I guess that’s sort of like Yemen. Poor country in the desert, no natural resources and a lot of pissed off people. There are lot of terrorists in Yemen.

There’s still the issue with financing though. Complete guess, but I’m thinking Yemeni terrorists are being funded by rich people or institutions in the rich Gulf states.

74

[quote]SexMachine wrote:

[quote]BPCorso wrote:

[quote]SexMachine wrote:

[quote]BPCorso wrote:

Not debating the point that the Saudi’s have a fuckton of easily extracted oil, but it’s important to note that countries like Saudi keep reserve information under lock and key.

Not like the USA or Canada where we have several organizations monitoring reserve levels on an annual basis as well as laws for energy companies to provide sensitive data to the government for tracking purposes. Our notion of Saudi reserve levels and cost of production is just a guess and the Saudi’s have every reason in the world to want people to believe their reserves are larger than what’s actually in the ground.[/quote]

However much they think they have this is what they choose to produce; attached graph is Saudi production. They feel confident enough to produce at current levels. Of course the Gulf states’ oil was critical in both World Wars - Stalin stayed on in Iran breaching his own agreement to remove forces. And they tried to use a choke on production as a means of economic warfare against the United States by OAPEC after Nixon sold some arms to Israel during the Yom Kippur War. During the Tanker Wars in the 80’s Iran blocked Iraq from exporting and the whole situation was unstable because of the radicalism of the Iranians and the desperation of the war effort(Iran-Iraq War).
[/quote]

Yea, I’m generally with you. Especially re: using production as economic warfare. Even if the USA is cutting imports from the GCC, we still have a lot of allies that are dependent on it so it’s a delicate situation even if the USA ever achieves “north american energy independence”. [/quote]

The Western Block needs energy and military security. Russia can use their energy dominance as leverage in their irredentist foreign policy schemes in Europe. North America is a different situation of course. There’s plenty of oil and gas in the US and Canada. But forces within the system are working to undermine the energy industry and divert vast sums from the public treasury to green schemes, Eco slush funds, lawsuits etc. The environmentalist movement is utterly subversive and regressive. I’m actually acutely aware of real environmental issues like deforestation, water quality and the extinction of species. But the environmentalists for the most don’t tackle these things. They’re a blight on the landscape.[/quote]

Good points. I’m like you – support the environment and efficiency but am pragmatic about it. The movement is anti-anything related to oil and natural gas, even projects/programs/initiatives/whatever that make sense and reduce greenhouse gas emissions or increase efficiency. They are definitely the type that can’t be reasoned with. And they’ve been highly effective in brainwashing people and demonizing those that dare question any of their logic.

75

[quote]BPCorso wrote:

[quote]on edge wrote:

[quote]BPCorso wrote:

[quote]theuofh wrote:

[quote]jjackkrash wrote:

I don’t really have that big of the problem letting the Saudi’s burn through their reserves when prices are low.

[/quote]

I’m OK with it as well and looking forward to them being broke and friendless.

I’ve seen various theories speculating that Saudi Arabia’s reserves are declining. Either they are bluffing now, have some plan B options, or have a vast amount of oil left. The rulers are approaching senility currently, so I’m not going to pick among those options.
[/quote]

I’m no Saudi expert, but I’m under the impression they’re trying to radically transform their country. Could be an indication that reserves are declining and realizing that sitting on their asses and relying on foreign labor and intellectual capital isn’t going to cut it for eternity. Unless they want to go back to a tribal bedouin lifestyle, which would be perfectly fine by me. Less terrorists and less financing for terrorists. [/quote]

I think it would actually mean more terrorists. Terrorists are usually young men who can’t get a job or a girl or anything to look forward to. If the Saudi way of life collapsed there would be a lot more young men in that category.[/quote]

Hmmmm… good point. I guess that’s sort of like Yemen. Poor country in the desert, no natural resources and a lot of pissed off people. There are lot of terrorists in Yemen.

There’s still the issue with financing though. Complete guess, but I’m thinking Yemeni terrorists are being funded by rich people or institutions in the rich Gulf states.[/quote]

Terrorism flourishes in Yemen because it’s a tribal society where no centralised government exists for all intents and purposes, and the actors are tribal chiefs and warlords. It’s the same problem across the Muslim world. In Afghanistan and the North West Frontier Province, there has never been any centralised control over the Pashtun tribes. They’re fiercely independent. The Arabs in the peninsular are likewise autonomous, tribal societies ruled by tribal chiefs, warlords and so on. These lawless, warlords are constantly waging war/terrorism in their own countries and occasionally some of them, for religious and ideological reasons, turn their attention to directly attacking the US and her allies and interests. This is the problem. Do we try to pacify all these lawless tribes? Try to win most of them over to some sort of compromise for coexistence?

History shows that jihad ebbs and flows throughout the ages and changes forms. But it will always be on the landscape on one form or another. For example, here in Australia we had an Islamic fundamentalist attack on civilians(a group of picnickers) back in 1914 and left notes calling for a jihad against infidels and Great Britain. The notes they left read remarkably like the stuff Islamic terrorists say today. The attackers were Afghan camel workers and they used the Ottoman Sultan’s jihad proclamation against Great Britain at the opening of The First World War, as authority and justification for murdering these civilians. Back in the days of the Caliphate it was a centralised operation and calls to jihad came right from the top.

76

[quote]BPCorso wrote:
There’s still the issue with financing though. Complete guess, but I’m thinking Yemeni terrorists are being funded by rich people or institutions in the rich Gulf states.[/quote]

There’s a good Vice documentary on Yemen.

If I recall, there was an Al Qaeda cell and the Houthi rebels. The Houthi’s don’t like Al Qaeda and were actually doing pretty well at fighting them. I think they are also allied with Iran.

They are also not fond of the Saudi’s or the USA because the Saudi’s attempted to exterminate them with American bombs.

77

[quote]theuofh wrote:

[quote]BPCorso wrote:
There’s still the issue with financing though. Complete guess, but I’m thinking Yemeni terrorists are being funded by rich people or institutions in the rich Gulf states.[/quote]

There’s a good Vice documentary on Yemen.

If I recall, there was an Al Qaeda cell and the Houthi rebels. The Houthi’s don’t like Al Qaeda and were actually doing pretty well at fighting them. I think they are also allied with Iran.

They are also not fond of the Saudi’s or the USA because the Saudi’s attempted to exterminate them with American bombs.

[/quote]

There’s also a long running Marxist insurgency tied in with the neighbouring Omani Marxist insurgency and there are separatists as well. It’s quite a mess and has been for a long time. The British were fighting secretly(at the time) in Oman in the 1970’s against rebels.

79

CA Governor Jerry Brown suspended environmental impact laws for the High Speed Rail. It seems Unions and political kickbacks are more important than pollution and the environment when it’s a Democratic project.

http://www.mantecabulletin.com/section/38/article/119328/

80

Is it time to consider a tariff on oil imports? Perhaps only seabound imports?