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Is Saudi Arabia Setting The World Up For Major Oil Price Spike?

CanadaJohn said:
I could be wrong, but I believe the Saudis saved America and the West's collective ass numerous times by blocking oil price increases and production cuts in OPEC over the years, particularly when Hugo Chavez was roaming free and **** disturbing.

Obama and the left want to subsidize and promote inefficient, ineffective, and overpriced green energy substitutes so why not subsidize America's burgeoning oil and natural gas production, keeping the prices low and product flowing? Can't two play the game you claim is in progress now?
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I thought we were already doing that??
 
Dittohead not! said:
I thought we were already doing that??
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There are clearly some tax advantages and "corporate welfare" that oil and natural gas companies enjoy, but nothing like those in the solar and wind industries. If you really want people to get on the green energy bandwagon, wouldn't it be wiser to subsidize fossil fuel production, for internal use, until such time as the green options become economically viable?
 
CanadaJohn said:
There are clearly some tax advantages and "corporate welfare" that oil and natural gas companies enjoy, but nothing like those in the solar and wind industries. If you really want people to get on the green energy bandwagon, wouldn't it be wiser to subsidize fossil fuel production, for internal use, until such time as the green options become economically viable?
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Personally, I think the wisest course would be to quit subsidizing any sort of industry.

But, that's just me.
 
Dittohead not! said:
Personally, I think the wisest course would be to quit subsidizing any sort of industry.

But, that's just me.
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That's fair, but then are people going to roll back salaries to pre-subsidization levels? And it depends on the strategic interests of the state and what those subsidies provide. A North American auto industry is considered strategically important - as is oil and natural gas. Agriculture is strategically important as another example.

But I agree it would be better if all facets of the economy had to stand unaided and live or die.
 
CanadaJohn said:
That's fair, but then are people going to roll back salaries to pre-subsidization levels? And it depends on the strategic interests of the state and what those subsidies provide. A North American auto industry is considered strategically important - as is oil and natural gas. Agriculture is strategically important as another example.

But I agree it would be better if all facets of the economy had to stand unaided and live or die.
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And, if the auto industry were not subsidized, if oil and gas and agriculture were not subsidized, those things would still exist. The less efficient ones may go out of business, but we'd still have cars, oil, gas, and agricultural products.
 
Dittohead not! said:
And, if the auto industry were not subsidized, if oil and gas and agriculture were not subsidized, those things would still exist. The less efficient ones may go out of business, but we'd still have cars, oil, gas, and agricultural products.
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Yes we would, but as I said labour costs would also be greatly reduced. Do you think Toyota, as an example, would be paying the wages they are and charging the prices they are if the the North American auto industry didn't have subsidized wages/benefits and inflated prices? The other subsidy, that isn't mention is tariffs - they artificially increase the price of goods and wages internally.
 
Dittohead not! said:
I hope you're right about that.

I'd much rather be dependent on Canada, where people are at least sane.
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But, when OPEC bumped its production spot prices dropped, which shows that any major producers can impact the commodities market. It probably rattled futures speculators.
 
countryboy said:
Lib definition of "strawman" = "facts that destroy my argument". :roll:
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You can tell when someone loses an exchange when they shift from one fallacy to another. In this case, strawman to ad hom. The last word is all yours.
 
Dittohead not! said:
Personally, I think the wisest course would be to quit subsidizing any sort of industry.

But, that's just me.
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Yup.

Anytime we subsidize anything it distorts the market and we end up with less than optimal results.
 
FWIW, the U.S. oil rig count has fallen by roughly half, even in the face of record production.

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Current market fluctuations are driven by speculation, and not supply and demand fundamentals. Barring unforeseen events on the production side, crude oil is likely to test record lows before OPEC reduces supply.
 
Kushinator said:
FWIW, the U.S. oil rig count has fallen by roughly half, even in the face of record production.

426795-14289185169430635-Economics-Fanatic.png


Current market fluctuations are driven by speculation, and not supply and demand fundamentals. Barring unforeseen events on the production side, crude oil is likely to test record lows before OPEC reduces supply.
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I think there is some misunderstanding on what the rig count means.
A single land rig could add between 2 to 6 producing wells to the list per year, depending on depth and location.
While there is a list of customers wanting wells put in, the rig count increases, and prices go up.
As the list get shorter, we do not need so many rigs to satisfy demand.
 
longview said:
I think there is some misunderstanding on what the rig count means.
A single land rig could add between 2 to 6 producing wells to the list per year, depending on depth and location.
While there is a list of customers wanting wells put in, the rig count increases, and prices go up.
As the list get shorter, we do not need so many rigs to satisfy demand.
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Does this mean that businesses contract or expand to meet demand?
 
longview said:
I think there is some misunderstanding on what the rig count means.
A single land rig could add between 2 to 6 producing wells to the list per year, depending on depth and location.
While there is a list of customers wanting wells put in, the rig count increases, and prices go up.
As the list get shorter, we do not need so many rigs to satisfy demand.
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What is your point? A lower rig count means less employment, tax receipts, and greater government expenditure.
 
US oil companies get enough subsidies to remain in business indeffinately, regardless of sales. Sure, they might take some hits to profit, and start scaling down. But they won't go under.


And even if they did, that would just create opportunity for the next guy to cash in on oil, when the prices go back up.
 
Kushinator said:
What is your point? A lower rig count means less employment, tax receipts, and greater government expenditure.
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My point is that the rig count has little relationship to the number of producing wells,
or the volume of production.
 
longview said:
My point is that the rig count has little relationship to the number of producing wells,
or the volume of production.
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From the horses mouth:
The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.
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Kushinator said:
From the horses mouth:
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The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.
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and what does any of that say about the price or supply of oil?
It is talking about the oil services industry, which is hurting big time right now.
Fuel Fix » Baker Hughes increases layoffs to 10,500
Fuel Fix » Halliburton cuts 9,000 jobs as oil slump takes toll
 
Kushinator said:
Which is my point. OPEC has successfully reduced long term production of it's competitors. The other member i was having an exchange with was chirping about rig count being near "record highs".
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No, things are not good, almost this same pattern happened in 1985, and it was ugly in Houston.
 
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