Plunging Oil Prices and The WW3 Connection
Post by FlySolo at ATS.
VIENNA – OPEC oil ministers meeting in Vienna on Thursday are in a bind. Prices are plunging – and in the short term, the cartel may not be able to do much about it.
Expectations that the group would not cut output to support the market saw the global price of oil slump another $1.89 on Thursday to $75.86 a barrel, extending its losses since June, when it was as high as $115.
That drop has been driven by a boom in shale production in the United States as well as weakness in some major world economies, causing supply to outpace demand.
So this is what I’ve been hearing. There is a surplus. However, all OPEC needs to do is stop producing oil which would result in driving up the prices again, as always. So why do they keep pumping?
Instead they appear to favour the opposite strategy – maintain output to the point where oversupply drives prices below the level making shale oil production economical. That, at least in theory, would force shale producers to cut back, reducing the glut and drive prices upward again.
That’s the plan? Stay low to ‘theoretically’ and hopefully make it less lucrative to produce shale oil? This to me sounds like all out economical war. While other weaker nations may suffer from the low-cost of a barrel, the main target would be the US economy. But even so, it’s not a very good tactical plan. The shale oil productions companies which survive the price drop will prove to be the dominate ones to contend with seeing they will own the larger market shares once competitors fall out.
At any rate, the answer given by OPEC as to why they’re holding out doesn’t seem complete for some reason. Until you dig a little deeper.
OPEC policy ensures US shale crash, says Russian Tycoon
In Russia, where Lukoil is the second-largest producer behind state-run OAO Rosneft (ROSN), the industry is much less exposed to oil’s slump, Fedun said. Companies are protected by lower costs and the slide in the ruble that lessens the impact of falling prices in local currency terms, he said.
Even so, output in Russia, the biggest producer after Saudi Arabia in 2013, is likely to fall slightly next year as lower prices force producers to rein in investment, Fedun said.
“The major strike is against the American market,” Fedun said.
So what’s happening here? OPEC keeps pumping oil in the hopes of crushing american markets. State of emergency in Ukraine as Russia cuts off coal at the beginning of winter and then we have this:
Very few people understand what Putin is doing at the moment. And almost no one understands what he will do in the future.
No matter how strange it may seem, but right now, Putin is selling Russian oil and gas only for physical gold.
We have Russia leading in a chess match.
n this brilliantly played by Putin economic combination the physical gold is rapidly flowing to Russia, China, Brazil, Kazakhstan and India, the BRICS countries, from the reserves of the West. At the current rate of reduction of reserves of physical gold, the West simply does not have the time to do anything against Putin’s Russia until the collapse of the entire Western petrodollar world. In chess the situation in which Putin has put the West, led by the US, is called “time trouble”.
Time Trouble. How appropriately named. Essentially, Putin has played the states at their own game. While the states have over inflated the dollar while suppressing the value of gold, Putin is exchanging worthless petro dollars for hard gold right from the west. Not worthless ‘paper-gold’ IOUs either.
Thus, in exchange for Russian oil, gas and uranium, the West pays Russia with dollars, purchasing power of which is artificially inflated against oil and gold by the efforts of the West. But Putin uses these dollars only to withdraw physical gold from the West in exchange, for the price denominated in US dollars, artificially lowered by the same West.
And that’s CHECK. Your move Obama.
So getting back to the oil surplus. We’re headed for ww3, I think the writing on the wall should be pretty clear by now. Once the petro dollar tanks, the gold standard comes back and there isn’t a ounce to be found, it’s all over but the crying.
Death from above. So in summary, I really don’t think it has much to do with the shale oil excuse; a red herring. WW3 is around the corner so drill baby drill.