Erl

[BarryBobPosthole]

Any time you see a commodity go up or down as much as oil has the past six years you have to ask yourself, WTF? The fact we're around $50, which is where we were then is just half the story. It got up way over $100. And the supply nor the demand has fluctuated very much at all. So still I wonder.....what drives it?

I think there's collusion going on and I think its to squeeze old Putin's nuts. Which doesn't bother me a bit. Well maybe a little. At least it will when they collude it back up over a hunnerd.

BKB

[Big Muddy]

I figured the recent drop in prices was due to the new GOP-heavy Congress, taking over this month....they have vowed to push the Keystone legislation thru, even with Obummer's veto....I figure all the oil companies are thinking the price of oil is gonna plummet, so they are competing to sell off their reserves, and trying to make as much profit as they can, now, before the Keystone becomes reality, and really cut deeper into their profits....jmho.

[Captain]

Bingo!

[Chicken Dinner]

Nah, it's our friends the Saudis opening up the pipes in order to squelch the US oil boom. The only reason we're probably not complaining is because it squeezes Putin's nuts worse than ours. As for me, I'm all for burning up their oil reserves at cheap prices and saving ours for future use.

[Thumper]

I'm with CD ... the Republican majority makes the Saudis nervous. Keystone isn't profitable if the price of oil isn't over the moon. The Saudis have enough oil on hand to play the supply/demand game and squeeze anybody's nuts they want ... Putin's OR our shale supporters. If the Saudis drive the price of oil down to the point shale isn't profitable, their competition goes bust and they're back in complete control.

[LJ3]

I miss Herb.

[Buckrub]

Nah, it's our friends the Saudis opening up the pipes in order to squelch the US oil boom. The only reason we're probably not complaining is because it squeezes Putin's nuts worse than ours. As for me, I'm all for burning up their oil reserves at cheap prices and saving ours for future use.

Listen to this man.

Saudi Arabia refuses to concede market share to the booming shale business, and are determined to run them out of business. It's working, they're laying off tons, losing money...........you can only afford to frac shale at X dollars a barrel price, and X is high. There is no question it is a conspiracy, but it's an open one....Saudi says publicly that they are conspiring to keep market share at all costs. They've said they are firm even at $20 a barrel.

[Thumper]

Just found this blurb on the net from Bloomberg:

The last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. In 1986, the Saudis opened the spigot and sparked a four-month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market.

So while no one expects the Saudis to ramp up output now like they did then and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives.

“1986 was the big price collapse and the industry did not see it coming,” said Michael Lynch, president of Strategic Energy and Economic Research in Winchester, Massachusetts, who has covered the oil sector for 37 years. “It put a lot of them out of business. You just don’t forget it. It’s part of the cultural memory.”

Yes the Saudi's are trying to drive American oil producers out of business. The fact that this move will also hurt ISIS and Iran is an added bonus.



And this:

In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again,” said Fedun, who’s made a fortune of more than $4 billion in the oil business, according to data compiled by Bloomberg. “The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish.”

[Thumper]

I mentioned this months ago when someone mentioned how gas prices kept falling. Of course, on the flip side of the coin, it made my BIL/sister multi-millionaires. He was a tiny, little fish in a huge pond in Houston. He was buying seals and gaskets, then repackaging them to sell to the industry (refineries, chemical plants, etc). He was working out of one small corner of his one-car garage. The '86 bust hit, the big boys went out of business or simply left town and he was the only one left. The oil/chemical companies that managed to stay afloat didn't have a parts supplier left ... OTHER than my BIL! He kept 'em up and running until oil prices recovered, then the big boys moved back in town to open shop. By this time the BIL was a HUGE fish in that HUGE pond and the oil/chemical companies told the returning industry to stuff it up their collective asses. My BIL was there when they needed him and the others abandoned ship like drowning rats.

Sis and BIL retired in their early 50's (still manage the Board of Directors) ... are living the good life ... and my nephew is still running the family business. Lynn and I spent Thanksgiving with them and I was there when he called my nephew to tell him to tighten his belt. He said this looks like the mid-80's all over again and he'd better prepare right now for some lean times ... or go the same route his competitors did when he was a nobody in the business. So far, I think his prediction is right on.

The real bummer? This is going to make that clown Obama look like a genius in the years to come. Unemployment in the energy industry is going to skyrocket and the unemployment rate will get blamed on the Republicans.

[BarryBobPosthole]

When prices hit rock bottom might be a good time to invest in it. There ain't no way in hell that a Republican OR Democratic congress is going to let the US energy sector go bust. This is where we see all that money behind candidates start to become visible. Just watch.

BKB

[Chicken Dinner]

Not to mention if prices go too low and we squeeze Putin's nuts too hard, we'll have a marginally balanced Russian oligarch with nothing to lose on our hands.

[Big Skyz]

I live just a few hundred miles outside the oil patch. I lived in the heart of it of 12 years. I was just on the phone last night and this morning with a couple of my friends that still work in the oil field over there. Both said lay offs are occurring right and left. They said everyone is scaling back and reducing their work forces and work load. Some sanity just might get restored to the paradise lost that I left behind.

[BarryBobPosthole]

Not to mention if prices go too low and we squeeze Putin's nuts too hard, we'll have a marginally balanced Russian oligarch with nothing to lose on our hands.

Kind of like 1940!
BKB

[Buckrub]

I'll bite.

What happened in 1940?

[Thumper]

I'll bite.

What happened in 1940?

The Winter War?

[Captain]

I'll bite. What happened in 1940?

Chuck Norris, Ringo Star, John Lennon and Raquel Welsh were born....

[Thumper]

The '40 Ford! ;)


http://image.rodandcustommagazine.com/f/featuredvehicles/1105rc_1940_ford_coupe/32294935/1105rc_05_o%201940_ford_coupe%20.jpg

[BarryBobPosthole]

1940 is when the US put the full court press on economic sanctions against Japan. That is actually what pushed into attacking us. There is some evidence that it was done very intentionally with exactly that in mind.

And what was the Studebaker model everyone roddedup? J5?
BKB

[Buckrub]

1940 is when the US put the full court press on economic sanctions against Japan. That is actually what pushed into attacking us. There is some evidence that it was done very intentionally with exactly that in mind.

And what was the Studebaker model everyone roddedup? J5?
BKB

ah. Thanks.

[LJ3]

Innersting posthole. What book did you read? Spill it! You gained street creds with Six Frigates and I need another book in the hopper.

[Chicken Dinner]

Working through Six Frigates now. Good read. What's next?

[BarryBobPosthole]

Wow, glad you liked it!

I do have a suggestion and its a really quick read. Its called 'A Tour on the Prairie' and it is a first hand account written by Washington Irving (he of Legend of Sleepy Holow fame) of a trip he made to Oklahoma in 1830 or so. At that time the borders of the Arkansas Territory were rolled back to what they are now and everything west of there was very much 'wilderness'. At least that was their viewpoint. I'd like someone else to read it just to compare notes with.
He and his 'particular friend' who is said to be some swedish royalty person, traveled to Fort Gibson and hooked up with a company of Arkansawyers who called themselves 'Bean's Rangers', met up with Sam Houston there and then they all took off on a couple month camping trip that made a big loop through the Crosstimbers area over to the edge of the Great Prairie and hunted all along the way. They found and killed every type of game you can imagine, elk,deer,bear, turkeys, bison, and even wild horses.
Its kind of funny that he refers to it as wilderness quite a bit even as they run into white settlers and indians all along the way. But I thought it was a cool trip even though I ended up ....well let's trade notes on it after you read it.

BKB