Lakshmi.Saevel said: »
Garuda.Chanti said: »
Ragnarok.Nausi said: »
Lakshmi.Saevel said: »
Venezuela is suffering economic collapse as we speak, they were hurt by the low international oil prices far more then Russia was. They have become so far into the hole that national bankruptcy is seen as inevitable within the next five years. Because of this they can no longer provide free Oil to their close alley Cuba who relies on the selling of that oil at international rates in order to fund their socialist government programs. US Oil shale has done in a few years what the US foreign policy has utterly failed to do over decades. Economics always wins.
Drill baby drill was a misguided over simplified tool of palin rhetoric that in reality has no impact on today's record US oil production, and the current plummet of oil prices.
At least that's what I got in the other forum, by the libs at ffxiah.com, supply and demand doesn't work..
Supply exceeds demand so prices drop. It currently costs more to extract shale oil then the price of crude.
I might mention that cheap oil has hurt the Russian economy more than all our sanctions. And that the Saudis don't like Russia at all.
Demand is still WAY ahead of supply, just not by as staggering an amount as before. Previously the economic expansion of China and India were casting demand to skyrocket. Now that the USA is supplying much of it's own oil needs and China's economy has started to slow down, the projected future demand isn't nearly what it was before and so prices are dropping. The value of oil itself hasn't changed but it's price can no longer be inflated by a cartel of producers. What we are seeing now is the market balancing itself as a prime exporter is a free market nation.
OPEC isn't going to cut it's production because the new exporter isn't a member, they can't force the USA to cut back production to maintain their high price standard and so the only option left for them is to keep producing and hope for the best. US shale is profitable down to $40 USD a barrel, yes technology has advanced that much. The economies of the other oil exporting nations are based on 75~100 USD per barrel prices. They all have state owned oil companies that take the proceeds and funnel it into social programs and wealth for their own populations. For them, such low prices is causing massive debt and an inability to support their populations at the current standard of living.
The idea that they can just "wait it out" and cause US shale industry to explode is very bad economics. No matter what they do the genie is already out of the bottle, nothing they do will make the technical / economic feasibility of shale oil go away. If they force the prices so low that shale becomes economically unfeasible they would have to maintain them at that low rate, otherwise shale production would start back up again. So can they maintain their own oil based economies at less then $40 USD per barrel permanently?
So everyone sit back and eat some popcorn, your about to witness rearranging of global power structures. And this is only the beginning, there are several other disruptive technologies being developed and in some places actually implemented.
I agree that the US no longer has to deal with outside cartel oil/gas producers we have the capabilities to stop buying foreign but the R's and D's do not want to do that. If we could get the discussion in congress to sell 5% of Alaska oil alone we could pay off our entire debt. Your right about the shale of the US. In Ohio alone there is roughly 7 new rigs worth 150mil a piece being made because of what was found underneath by the Virginia oil company. Ohio is becoming kinda like North Dakota, Alaska, Texas. It has been beneficial to local economies creating lasting jobs. This is one example we could do the same thing with other fields as well in the US but only under the right leadership. Which would be for the people and not big everything, and would be for innovation and the advancement of prosperity benefiting all. It would not be isolationism we could still have free markets.
Never count the US out we are perhaps 4-5% of the global population in such a small geographical area of the world.