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| Economy | |
| Oil down 9% past month, heading toward $70/barrel | |
| 2014-11-27 | |
| Oil prices hit a four-year low on Thursday North Sea Oil at ~$75, West Texas Intermediate at ~$72 before markets open as hopes for an OPEC agreement on the first production cut since the financial crisis grew smaller. Saudia Arabia, the largest among OPEC members, hinted it would not vote for the cut in output -- in a bid to retain market share and hold off competition from U.S. shale production. $70/barrel if sustained would mean gasoline at $2.50 to $2.70 for most of USA
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| Posted by:lord garth |
| #19 Whatis needed is a tariff Government is recursive. Any more resources diverted to it will benefit only it and politicians. As it is it is already an overbearing, overfed, oversize behemoth that does not need any more despite what any possible policy remedy may indicate. |
| Posted by: badanov 2014-11-27 16:37 |
| #18 Proceeds must not flow into the general fund. nice try, with good intent. Those $ will disappear into the EPA for Climate Control regs |
| Posted by: Frank G 2014-11-27 15:20 |
| #17 The cartel did this before, in the 70s, to kill off the US synfuels investments. And it did - careers were destroyed, and management looked elsewhere for investment and new business. What is needed is a tariff to keep the price of imported oil above $75/bbl. Proceeds to go to nuclear fusion research, especially non-tokomak, advanced fission, e.g. thorium reactors, and next gen solar, e.g. "black" screen printed photovoltaics. Proceeds must not flow into the general fund. |
| Posted by: KBK 2014-11-27 15:18 |
| #16 |
| Posted by: 3dc 2014-11-27 14:06 |
| #15 |
| Posted by: 3dc 2014-11-27 14:05 |
| #14 BBC on oil price crash after today's OPEC failure Shale threat Analysts suggest the strategy of maintaining output may be aimed at retaining dominance of the market in the face of increasing shale oil production in the United States. The shale boom has been one of the drivers behind the decline in the oil price. But as the oil price dips, shale becomes less economical to produce. If oil prices are allowed to remain low for some time that could cap shale production over the longer term. So keeping oil prices low may in fact make sense for Opec. "The Saudis want Opec to remain relevant,'' said analyst Phil Flynn, speaking before the end of the meeting in Vienna. "The only way in their mind is to subdue the US shale producer." |
| Posted by: 3dc 2014-11-27 14:03 |
| #13 The Saudis are betting they can starve tar and shale out of existence but I think they are playing a losing hand. Methinks that, although valid, is more an ancillary intent. |
| Posted by: Pappy 2014-11-27 13:47 |
| #12 Bill, the $2.50 figure is just the O&M costs - its a bit higher if you factor in depreciation of the both the well and pipeline infrastructure more importantly, the entire Saudi govt depends on the revenue from the oil sector (same is true to varying extents of Iran, Venezuela, Russia, Gabon and Nigeria) and at $70/barrel, the Saudis have a major budget shortfall as do those other countries; while the Saudis have lots and lots of reserves, that's not true of the other countries |
| Posted by: lord garth 2014-11-27 12:24 |
| #11 Also, if the oil companies would write off the development costs of crude from shale and tar sand as "sunk costs," the actual cost of production is much lower than the $75 a barrel being tossed around in the media, which explains why shale and tar sand are continuing in the face of the declining sell price of crude in the open market. The Saudis are betting they can starve tar and shale out of existence but I think they are playing a losing hand. Some new oil fields in South Texas are still ramping up production and those cost even less to produce oil. |
| Posted by: Bill Clinton 2014-11-27 12:16 |
| #10 West Texas light crude hit $70 and change last night. Because Saudi Arabia has no production costs, i.e., they nationalized US infrastructure and wells, etc., the cost of putting a barrel of oil at Dover, DE to the Saudis is about $2.50 a barrel. Because the price of oil is artificially inflated by OPEC, it is essentially a bubble and as such will experience periodic collapses. With as many put options as there are out there on crude oil, expect the bench mark price to head further south. |
| Posted by: Bill Clinton 2014-11-27 12:12 |
| #9 $3.54 in Anchorage but drop in crude price hits state coffers |
| Posted by: Alaska Paul 2014-11-27 12:09 |
| #8 ...$2.43 here in SC. Mike |
| Posted by: Mike Kozlowski 2014-11-27 11:51 |
| #7 Not to worry - the California state legislature will find a way to jack up the tax to compensate. |
| Posted by: Pappy 2014-11-27 11:47 |
| #6 $2.78 in Sacramento. Lowest I've seen in California since I have lived here. |
| Posted by: DarthVader 2014-11-27 11:25 |
| #5 $2.84 in Will County, Illinois, yesterday. |
| Posted by: Steve White 2014-11-27 10:53 |
| #4 $2.459 at the QT |
| Posted by: AlmostAnonymous5839 2014-11-27 10:51 |
| #3 $2.77 on a reservation north of Seattle, about 35-60 cents more out in town. WA has I believe 2nd highest collection of taxes on gas in the country. |
| Posted by: USN, Ret. 2014-11-27 10:45 |
| #2 Was about 2.369 on the Res yesterday. |
| Posted by: Procopius2k 2014-11-27 10:15 |
| #1 I paid $2.689/gal unleaded regular at Sam's Club yesterday, lowest price in many years. Weather around here is so foul I've no desire to drive anywhere. |
| Posted by: Anguper Hupomosing9418 2014-11-27 09:51 |