Big Guy Posted August 23, 2015 Report Share Posted August 23, 2015 Fareed Zakaria has written has interesting commentary on his opinion of the cause and effects of the recent oil crisis; https://www.washingtonpost.com/opinions/the-consequences-of-the-oil-bust/2015/08/20/7c98defe-4770-11e5-846d-02792f854297_story.html I was especially interested in the idea that it is Saudi Arabia trying to force American shale and tight oil companies out of business. Their overproduction is also hurting them but they “know it hurts them but they hope it will hurt everyone else more.” If that is true, then It seems to me that the world is allowing the Saudi's much too much leeway in creating economic havoc. I thought the USA had the major influence in that region through military sales. Why is the rest of the world allowing the Saudi's to create so many problems? Are they really that powerful? Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 (edited) If that is true, then It seems to me that the world is allowing the Saudi's much too much leeway in creating economic havoc. I thought the USA had the major influence in that region through military sales. Why is the rest of the world allowing the Saudi's to create so many problems? Are they really that powerful? Please revisit your underlying assumptions, as they are not correct. The "rest of the world" allows lots of things, including military sales from Canada to Saudi Arabia. There is no organized UN effort to sanction excessive oil production. http://www.theglobeandmail.com/news/politics/canadas-arms-deal-with-saudi-arabia-shrouded-in-secrecy/article22547765/ Edited August 23, 2015 by bush_cheney2004 Quote Link to comment Share on other sites More sharing options...
On Guard for Thee Posted August 23, 2015 Report Share Posted August 23, 2015 If that is true, then It seems to me that the world is allowing the Saudi's much too much leeway in creating economic havoc. I thought the USA had the major influence in that region through military sales. Why is the rest of the world allowing the Saudi's to create so many problems? Are they really that powerful? The Saudi's with the help of the US are that powerful. They're in cahoots to put Putin out of business, since oil is about all he's got. Quote Link to comment Share on other sites More sharing options...
Freddy Posted August 23, 2015 Report Share Posted August 23, 2015 Fareed Zakaria has written has interesting commentary on his opinion of the cause and effects of the recent oil crisis; https://www.washingtonpost.com/opinions/the-consequences-of-the-oil-bust/2015/08/20/7c98defe-4770-11e5-846d-02792f854297_story.html I was especially interested in the idea that it is Saudi Arabia trying to force American shale and tight oil companies out of business. Their overproduction is also hurting them but they “know it hurts them but they hope it will hurt everyone else more.” If that is true, then It seems to me that the world is allowing the Saudi's much too much leeway in creating economic havoc. I thought the USA had the major influence in that region through military sales. Why is the rest of the world allowing the Saudi's to create so many problems? Are they really that powerful? The spice must flow. He who controls the spice, controls the universe. Dune. Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 23, 2015 Report Share Posted August 23, 2015 There is no organized UN effort to sanction excessive oil production. No, there's just piranhas nodding and winking amongst themselves while taking a chunk out of one another on occasion. It's in their nature. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 No, there's just piranhas nodding and winking amongst themselves while taking a chunk out of one another on occasion. It's in their nature. Nothing wrong with that. Saudi Arabia is a regional power with interests that may or may not align with all the other piranhas. Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 23, 2015 Report Share Posted August 23, 2015 Well as we know sometimes there are things very wrong with that, so why not now is probably a fair question to ask, not that I expect very fair answers. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 Well as we know sometimes there are things very wrong with that, so why not now is probably a fair question to ask, not that I expect very fair answers. What's wrong with producing more sweet crude ? Tastier than nasty bitumen. Quote Link to comment Share on other sites More sharing options...
Shady Posted August 23, 2015 Report Share Posted August 23, 2015 I don't see any oil crisis. An oil crisis would be if there were shortages. We have lots of oil at low prices. That's not a crisis, it's the global market, supply and demand working as it should. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 I don't see any oil crisis. An oil crisis would be if there were shortages. We have lots of oil at low prices. That's not a crisis, it's the global market, supply and demand working as it should. Agreed....the really young ones have never experienced a real oil crisis...it ain't pretty. Quote Link to comment Share on other sites More sharing options...
On Guard for Thee Posted August 23, 2015 Report Share Posted August 23, 2015 I don't see any oil crisis. An oil crisis would be if there were shortages. We have lots of oil at low prices. That's not a crisis, it's the global market, supply and demand working as it should. I think if you were looking at it through Harper's eyes, you'd see an oil crisis. Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 23, 2015 Report Share Posted August 23, 2015 I'm pretty sure Harper has a sense of manifest destiny but without the world's biggest armed forces and intelligence agencies he's pretty harmless really - a fluffy kitten amongst piranhas. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 I'm pretty sure Harper has a sense of manifest destiny but without the world's biggest armed forces and intelligence agencies he's pretty harmless really - a fluffy kitten amongst piranhas. Canadian "manifest destiny" is an oxymoron. Quote Link to comment Share on other sites More sharing options...
Topaz Posted August 23, 2015 Report Share Posted August 23, 2015 Some of their royals want to go 100% Green, then others within the family wants to stick with oil. http://gas2.org/2012/11/01/saudi-arabia-wants-to-go-100-green/ Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 Some of their royals want to go 100% Green, then others within the family wants to stick with oil. http://gas2.org/2012/11/01/saudi-arabia-wants-to-go-100-green/ If 100% green was not cost competitive at $80 U.S. per barrel, how will 100% green be cost competitive at $40 per barrel ? Quote Link to comment Share on other sites More sharing options...
waldo Posted August 23, 2015 Report Share Posted August 23, 2015 I don't see any oil crisis. An oil crisis would be if there were shortages. We have lots of oil at low prices. That's not a crisis, it's the global market, supply and demand working as it should. there's an oil glut... mega production and all that! In your economic understanding, how skewed is your supply versus demand? Wonder why those prices have so tanked... cause, uhhh.... supply is equaling demand? Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 23, 2015 Report Share Posted August 23, 2015 If 100% green was not cost competitive at $80 U.S. per barrel, how will 100% green be cost competitive at $40 per barrel ? Yep, the kittens just need to get meaner is all - then we could turn this crisis into a good old fashioned war and finally start extracting some profits again. Quote Link to comment Share on other sites More sharing options...
WIP Posted August 23, 2015 Report Share Posted August 23, 2015 Don't believe anything Fareed Zakaria says unless it is confirmed by outside sources! The only value of his writing is as a window into the thinking inside the power centers of Washington, and what messages they want to disseminate to the public. So, it seems that Washington is pulling away from Saudi Arabia a bit (they're still willing to sell them a shitload of armaments though) and is going to accuse them of being the bad guy in America's failed domestic oil production strategy. The big flaw in this story is that the Saudi's have not "flooded" the world market with oil....it's more a matter of the demand for oil (and other commodities) not being there. I suspect falling worldwide demand...as we have seen another example of recently with China's falling economy, is a story that Washington doesn't want to talk about....hence Zacharia and other hacks steering the message towards oversupply of oil. Back in the spring, I came across this blog post from Gail Tverberg (Our Finite World) Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand. Gail and a number of other analysts were noting a glut in most commodity markets besides oil, and predicting the worldwide economic downturns that are starting to get noticed by mainstream media today. It's a lengthy blog post which emphasizes a theme made a number of times on Finite World and her earlier posts on the now defunct Oil Drum blog site: when resources start becoming scarcer, prices rise...but that's only as long as economic demand is high. We're entering a time like the 1930's and worse - where economies can no longer afford to drive resource prices higher, and even falling prices fail to spur economic growth, because so many other necessary factors that are needed to expand economic production are no longer there. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 23, 2015 Report Share Posted August 23, 2015 ....So, it seems that Washington is pulling away from Saudi Arabia a bit (they're still willing to sell them a shitload of armaments though)... If selling weapons to the Saudis is good enough for Canada, then by golly, it is good enough for the USA too. Quote Link to comment Share on other sites More sharing options...
-1=e^ipi Posted August 24, 2015 Report Share Posted August 24, 2015 What's behind the 'oil crisis', Saudi Arabia. Why? Well the Saudi's hit multiple birds with one stone here: ISIS, Iran, Russia, Canadian Oil Sands, US Shale Oil. Quote Link to comment Share on other sites More sharing options...
-1=e^ipi Posted August 24, 2015 Report Share Posted August 24, 2015 Saudi Arabia is a regional power with interests that may or may not align with all the other piranhas. Saudi Arabia has the world's 4th highest military expenditure, use their oil money to spread wahabbism and control Mecca and Medina. They are far more than a regional power. Quote Link to comment Share on other sites More sharing options...
Big Guy Posted August 24, 2015 Author Report Share Posted August 24, 2015 (edited) Don't believe anything Fareed Zakaria says unless it is confirmed by outside sources! ... I beg to differ. I have been following his opinions for years and he has consistently been proven to have a far greater insight than anyone else in the USA. His warnings have been correct and his focus on the Middle East makes him one of my favorite and believable sources of what is happening in the Middle East. I read, follow and sometimes share opinions with him (or whoever runs his web site) as well as Eric Margolis (another valuable source of impartial knowledge) . I have never been disappointed and always been better informed by their views and analysis. Edited August 24, 2015 by Big Guy Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 24, 2015 Report Share Posted August 24, 2015 Saudi Arabia has the world's 4th highest military expenditure, use their oil money to spread wahabbism and control Mecca and Medina. They are far more than a regional power. Good...they are behaving as any nation state should to protect their interests. Canada knows a good customer for defense contracts when it sees one. Quote Link to comment Share on other sites More sharing options...
ReeferMadness Posted August 24, 2015 Report Share Posted August 24, 2015 The theory that the Saudis are trying to eliminate competition from shale oil is one theory and I don't find it particularly compelling. Americans have a lot of influence with the House of Saud and so I question this. Another theory I find more compelling is that the Americans themselves are working with the Saudis. Maybe the Saudis are attracted by the notion that it will push some of the weaker players out of the shale oil business. But I think that the Americans are aiming this squarely at Russia. And there are a bunch of side benefits: - it allows them to take a swipe at Venezuela and Iran - the American economy needs a boost and cheap energy helps Whatever the cause, the cheap oil won't last. Nobody really seems to know what shale oil really costs to produce but it isn't $35 a barrel. As long as oil stays cheap, investment will slow down and eventually the cost will skyrocket again. This is the miracle of the market. The price will continue to fluctuate wildly, overshooting on both ends. But the longer term trends are clear. The price of oil will continue to climb while solar and other renewables continue to drop. At some point, someone will resolve the storage issue and renewables will take off. Quote Link to comment Share on other sites More sharing options...
TimG Posted August 24, 2015 Report Share Posted August 24, 2015 (edited) But the longer term trends are clear. The price of oil will continue to climb while solar and other renewables continue to drop. At some point, someone will resolve the storage issue and renewables will take off.Perhaps. Perhaps not. The sudden appearance of fracked oil should be enough to prove that trying to predict the future of energy is a waste of time. The only constant is technology will appear and it will change the game but we don't have any idea what that technology may be or when it will appear. Personally, I would bet on fusion power appearing before economically viable grid scale batteries. Edited August 24, 2015 by TimG Quote Link to comment Share on other sites More sharing options...
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