In this tweet, Ted Cruz accurately explains the problem with cheap gasoline, it just sets the stage for a return to $4 gasoline .......... but I really don't think this group of 12 Senators has much leverage. Cruz talks tough, but its more for his constituents than any real hope of getting something done ....
https://twitter.com/JavierBlas/statu...713668097?s=19
I think most people do support the application of reliable sustainable non-oil energy sources...but there's a reason they haven't caught on in mass yet... When they become more efficient and are cheaper than oil and gas, the transition will happen naturally. Frankly anyone that really supports renewables should be cheering for higher oil and gas prices as it increases the financial incentive to develop and adopt new technology.
Did monopolies allow for a truly free market in any field before the Sherman Anti-Trust act went into effect? No...which was why Standard Oil and other monopolies were split up. The US legislated the destruction of those monopolies to allow for a free market to exist. Do you think it would be fair for all US producers to collude with each other and curtail production to raise the price? If you think the oil market is free with OPEC+ in the mix... read The Prize.
Well, US domestic producers need to curtail production instead of increasing production. Problem with that, its like herding cats.
I can understand how KSA is weary of losing market share to US domestic.
And yes, cheap fossil fuel prices for the consumer are the climate change alarmist's nightmare. Its the last thing they want to see. When the enviro left protests O&G infrastructure projects, they trying to limit oil or NG reaching the market, and they hope to put upward pressure on prices. .. i.e. Dakota Access protests.
That was on it's way to happening before any of this started. Capital markets have nearly been shut off and companies were drilling relentlessly to service debt and keep the lights on but there would've been no way to continue on that path without capital. Bankruptcies and consolidation would've taken care of it on there own with prices below $45-$50 for a year or so.
Some people would rather gas light and pretend they know things despite likely never had oil on their hands. so I’ll speak slow with small words so he can understand.
You can’t drill a hole and yay oil!
It’s very difficult that requires a ton of engineers and scientists, people who if they leave the industry won’t come back.
The brain drain of American shale will set us back another 5-10 years before a recovery is even possible. In the mean time, super spikes in pricing will come.
Can’t tell if you really believe your opinions are infallible or are just trying to convince others. Believe it or not, there are one or two people without a vested interest in oil companies who can understand the energy business, economics in general, history, and the politics of power. You may be shocked that some may even be as smart as you believe you are. Heaven forbid they challenge the notion that there is a future that relies less on fossil fuels and oil Companies.
By the way, my family has had oil income for over 50 years, my dad retired from lifelong work for a major oil company, my ex father in law was head of R&D for a major oil company, I have invested in wells myself and I have many good friends in the business at various levels. So, as I guess you would say, I have oil on my hands, so I suppose that qualifies me to be smart. Lol. But, I also have done business all over the world and been directly involved in alternative energy projects planning in Europe, the Middle East, Africa and South America. I don’t owe my soul to either American oil or alternative energy and refuse to put my head in the sand.
Russia said ready to cut production by 1.6M bbl/day
The OPEC oil cartel and nations including Russia have agreed to boost oil prices by cutting as much as 10 million barrels a day in production, or a tenth of global supply. More countries, including the United States, were discussing Friday their own cuts in what would be an unprecedented global pact to stabilize the market.
The agreement between OPEC and partner countries aims to cut 10 million barrels per day until July, then 8 million barrels per day through the end of the year, and 6 million a day for 16 months beginning in 2021.
https://apnews.com/5cbd700de930cfbdea411e084d976385
Interesting multi-thread...
"know there's a lot of other stuff going on, but surprised not to see more commentary about how weird it is for the U.S. president to be trying to organize an oil cartel"
https://twitter.com/paulkrugman/stat...35997359955970
Paul Krugman might be one of the most clueless people I’ve ever seen in relation to the oil markets. He’s just looking to attack Orangeman cause Orangeman= always bad.
This on the other hand is spot on.
https://www.nytimes.com/2020/04/10/o....co/rzmrrKpTuN
For a guy in the industry you sure are negative about it. It’s booms and it’s busts, this is a big bust but it’ll be back, it always will. “Oklahoma is dead forever, CLR is going to 0”. This whole thing will end up being a blessing in the long run, everyone and their dog knew all this PE money was going to lead to a disaster. This is going to force all the operators who had no business operating out and there’s still good acreage that will now be discounted and available to good operators. Southern Oklahoma is gonna be hot hot hot when prices go up again. Enough with the doom and gloom.
Bethany McLean is one of the best business writers around and has been for years.
From that article:
In reality, the dream was always an illusion, and its collapse was already underway. That’s because oil fracking has never been financially viable. America’s energy independence was built on an industry that is the very definition of dependent — dependent on investors to keeping pouring billions upon billions in capital into money-losing companies to fund their drilling. Investors were willing to do this only as long as oil prices, which are not under America’s control, were high — and when they believed that one day, profits would materialize.
Even before the coronavirus crisis, the spigot was drying up. Now, it has been shut off.
...the amount of oil coming out of a fracked well declines steeply after the first year — more than 50 percent in year two. To keep growing, companies have to keep plowing billions back into the ground.
All we know for sure is that fracking company executives and private equity financiers have made a fortune by touting the myth of energy independence — and they won’t be the ones who have to pick up the pieces.
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