• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

$60 a barrel for oil to arrive in the US soon?

JP Hochbaum

DP Veteran
Joined
Feb 7, 2012
Messages
4,456
Reaction score
2,549
Gender
Male
Political Leaning
Independent
"What is now happening is the end game: an orchestrated wave of noise that is drawing in speculative money. This is enabling the producers who are actually in the know to hedge by selling production forward during what they confidently expect will be a temporary – and pre-planned – managed fall in the oil price.

But the US has been quite happy to let the EU – as useful idiots – take the economic hit. The high oil prices caused by all this noise and nonsense are actually a net benefit to Iran – which rattles its sabre loudly as elections approach.

The effect of a managed decline in oil prices to, and probably over-correcting well through, $60 a barrel – which is coming fairly soon – will be extremely beneficial to the US in two ways."

Chris Cook: The Oil End Game « naked capitalism
 
"What is now happening is the end game: an orchestrated wave of noise that is drawing in speculative money. This is enabling the producers who are actually in the know to hedge by selling production forward during what they confidently expect will be a temporary – and pre-planned – managed fall in the oil price.

But the US has been quite happy to let the EU – as useful idiots – take the economic hit. The high oil prices caused by all this noise and nonsense are actually a net benefit to Iran – which rattles its sabre loudly as elections approach.

The effect of a managed decline in oil prices to, and probably over-correcting well through, $60 a barrel – which is coming fairly soon – will be extremely beneficial to the US in two ways."

Chris Cook: The Oil End Game « naked capitalism

WHO is Chris Cook again?

And why doesn't he know what lift costs are in the US and Canada?
 
WHO is Chris Cook again?

And why doesn't he know what lift costs are in the US and Canada?

You could ask him directly in that blog. Also it says who he is in the blog.
 
$60? I don't think so. We will see. I say $80.
 
Who are the culprits? Wall Street speculators. Speculators are responsible for $40 per barrel.
 
The info is somewhat dense for an average guy like me, and the comments section are similarly peppered with pro and con positions of people with economics educations far in excess of mine. Anybody smart that could dumb it down for a guy like me?
 
The info is somewhat dense for an average guy like me, and the comments section are similarly peppered with pro and con positions of people with economics educations far in excess of mine. Anybody smart that could dumb it down for a guy like me?

I will attempt to do so :), I too am just slightly above laymen, but I converse with Chris Cook and trust his judgement.

In a nutshell the Iran sanctions have forced Iran to sell its oil to countries willing to buy from them (China and Russia), and they must do so at a discount because of their low bargaining position.

The Saudi Arabians have responded to Iran's lost oil supply by producing more for countries in Europe and other places, increasing our supply. But in the meantime Europe is being hit with higher oil prices (from speculation), and thus they are using less oil (less demand drives down prices). So they now have less demand and even more supply.

Couple that with the oncoming speculation crash, we could see a drop in oil like we have with the housing market.
 
Good site, it makes some valid points and this wouldn't be the first huge yo yo in oil prices. I would however prefer oil drops AFTER obama is defeated due in part to high gas prices.

So you don't mind if people suffer for your political desires. Gotcha.
 
A little pain now beats alot of pain later, Obama will drag us over a cliff and if we need to pay some high gas prices to get him to jump off the cliff alone, so be it.

I may disagree with your reasoning, but at least your motivations are right in my opinion.
 
If we ever see $60 a barrel again, it will be because demand has crashed and the economy is cratering again.

People b**** about the oil companies and speculators all the time, but it is actually OPEC that is the biggest factor in determining the price of oil.
 
No... our government will kill millions of people in Iran before oil gets too high in price in the U.S. The reason is that they fear what the public will do way more than they fear another war hurting America's reputation.
 
Good site, it makes some valid points and this wouldn't be the first huge yo yo in oil prices. I would however prefer oil drops AFTER obama is defeated due in part to high gas prices.

Agreed.

It would be a huge mistake for the oil executives to drop oil prices prior to election day.
 
Agreed.

It would be a huge mistake for the oil executives to drop oil prices prior to election day.

I have long said the republican minded people would run the country into the ground if that meant getting Obama out of office. It would surprise me none to see the big oil fat cats hold us hostage for their political gains.
 
I have long said the republican minded people would run the country into the ground if that meant getting Obama out of office. It would surprise me none to see the big oil fat cats hold us hostage for their political gains.

If you had the slightest clue about anything oil related, you would know that the "big oil fat cats" do not set the price of oil.
 
If we ever see $60 a barrel again, it will be because demand has crashed and the economy is cratering again.

People b**** about the oil companies and speculators all the time, but it is actually OPEC that is the biggest factor in determining the price of oil.

Not true. OPEC is completely meeting demand. What else do you expect them to do?
 
Speculators are afraid of war with Iran. Last year, slight fears about a conflict in Bahrain pushed prices way up. This year will be no different.
 
The oil markets are completely manipulated and orchestrated, and the conductors of the orchestra have the benefit of having already held a rehearsal in 2008.

It would have been nice if Mr. Cook had identified these manipulators.

Or did I miss something?
 
Not true. OPEC is completely meeting demand. What else do you expect them to do?

OPEC is meeting demand at the current market price. If they were to increase production, it would lower the price of oil, and more would be consumed.

As a cartel, I expect them to restrict production just enough to drive up prices so that they can maximize their profit, without sending prices so high that we are encouraged to switch to alternative sources of energy.

And that's exactly what they do.
 
You could ask him directly in that blog. Also it says who he is in the blog.

I don't think he knows what he is talking about.

He sounds like an energy broker not an oilman.

And, for all we know the Chinese are squeezing Iran for a lower ppb..... so Iran may not be benefitting.

Iran has little refinery capacity that's why they IMPORT $6 billion a year in gsoline and the whole country has been on gas rationing since 2007.
 
"What is now happening is the end game: an orchestrated wave of noise that is drawing in speculative money. This is enabling the producers who are actually in the know to hedge by selling production forward during what they confidently expect will be a temporary – and pre-planned – managed fall in the oil price.

But the US has been quite happy to let the EU – as useful idiots – take the economic hit. The high oil prices caused by all this noise and nonsense are actually a net benefit to Iran – which rattles its sabre loudly as elections approach.

The effect of a managed decline in oil prices to, and probably over-correcting well through, $60 a barrel – which is coming fairly soon – will be extremely beneficial to the US in two ways."

Chris Cook: The Oil End Game « naked capitalism

Nope, since the production cost of Canadian oil sands is around 60 dollars a barrel.

This also means that anything over that is speculator/profit extra...
 
OPEC is meeting demand at the current market price. If they were to increase production, it would lower the price of oil, and more would be consumed.

Do you expect the farmer to grow 15 more acres of corn than there is a market for? What are they supposed to do with all of this extra oil that isn't being used?

As a cartel, I expect them to restrict production just enough to drive up prices so that they can maximize their profit, without sending prices so high that we are encouraged to switch to alternative sources of energy.

They are not restricting production.

And that's exactly what they do.

No, they are not. Oil is high because it's now not just a commodity but an investment vehicle. If you want to lower the price remove those who are only in it as an investment.
 
Barring a significant slowdown in global economic growth, the price of oil is unlikely to fall below $60 per barrel this year, much less in the very near term (matter of weeks or months). Global demand for crude oil is currently forecast to increase 0.9% in 2012. The difference between production and consumption is continuing to narrow and forecast to continue to do so. The blogger's opinion that the price of crude oil will fall "well through, $60 a barrel – which is coming fairly soon..." represents a fundamental misread of the structural supply-demand dynamics that currently prevail. "Fairly soon" would imply weeks or, at most, a few months for such a development, something that would collide not just with supply-demand dynamics, but also seasonality.

A price that falls toward $75-$80 later this year would not be unreasonable were a combination of reduced risk premia associated largely with Iran and slower global economic growth to play out, particularly in the fall and beyond. However, the reality that developing economy oil consumption continues to grow faster than efficiency gains/substitution in developed economies should provide a fairly firm floor. Even $75-$80 oil later this year is not assured unless a more significant reduction in global economic growth began to manifest itself. A price below $60, especially "well through" that level is unlikely this year, much less over the next few weeks/months.
 
If you had the slightest clue about anything oil related, you would know that the "big oil fat cats" do not set the price of oil.

Oh, then it must be all Obama's fault then. I get it. :roll:
 
Back
Top Bottom