Fall in oil

Originally posted by robbie carrobie
Actually Joe I was unaware, it was not until OPEC refused to cut back output before i knew something was nefarious was afoot!

It is nefarious to not cut back production? Perhaps it is rational response to the market.

Originally posted by quackquack
It is nefarious to not cut back production? Perhaps it is rational response to the market.

a rational response? The Saudis are sitting on huge reserves, why would they not want to cut back production if it meant more profitability for them?

Originally posted by robbie carrobie
a rational response? The Saudis are sitting on huge reserves, why would they not want to cut back production if it meant more profitability for them?

They want to maintain, or preferably increase, their market share. The producers most hit by this are the offshore producers as they have higher costs. I'd be wary of trying to reach conclusions beyond that.

Originally posted by DeepThought
They want to maintain, or preferably increase, their market share. The producers most hit by this are the offshore producers as they have higher costs. I'd be wary of trying to reach conclusions beyond that.

While I understand your concern and applaud your restraint if indeed it was to 'increase market share' by putting more pressure on offshore producers this also adversely effects shale production as well, which you are no doubt aware has higher costs because of its nature despite being an 'onshore', facility. Its a very interesting perspective never the less because if the situation had continued then those with, 'deeper pockets', could have bought up the shale production as they struggled to meet creditors.

What are we to say about its effect on the Ruble which has just about halved in value, its effect on Iran and Venezuela, that it was merely a coincidence. Are we to seriously believe that there is no economic collusion between the US, Saudi Arabia and OPEC?

Originally posted by robbie carrobie
While I understand your concern and applaud your restraint if indeed it was to 'increase market share' by putting more pressure on offshore producers this also adversely affects shale production as well, which you are no doubt aware has higher costs because of its nature despite being an 'onshore', facility. Its a very interesting perspective never ...[text shortened]... to seriously believe that there is no economic collusion between the US, Saudi Arabia and OPEC?

Yes it's inconvenient for Russia, Venezuela, and Iran. It does not automatically follow that the Saudi actions are motivated by the prospect of harming America's enemy's interests, I think that comes under the heading of beneficial side effect. Besides their actions are not exactly helpful to US oil producers so an alternative conspiracy theory would be that the Saudis are attempting to bring the Americans to heel. However I think the real reason has to do with Iraq's supply of oil to the rest of the world returning to normal after a couple of decades of sanctions. There's oversupply and that is what is causing all the producers problems. Any group that cuts back on supply risks losing market share so they aren't doing it.

There is a far bigger story to falling oil prices than people are willing to discuss here. The reality is that oil and gas reserves are vastly over valued in our stock markets because they fail to accept that, in reality, most of those reserves can never be used. They will either be closed off to protect our environment from climate change, or climate change will make them beside the point.

The so-called "carbon bubble" is the result of an over-valuation of oil, coal and gas reserves held by fossil fuel companies. According to a report published on Friday, at least two-thirds of these reserves will have to remain underground if the world is to meet existing internationally agreed targets to avoid the threshold for "dangerous" climate change. If the agreements hold, these reserves will be in effect unburnable and so worthless – leading to massive market losses. But the stock markets are betting on countries' inaction on climate change.

The stark report is by Stern and the thinktank Carbon Tracker. Their warning is supported by organisations including HSBC, Citi, Standard and Poor's and the International Energy Agency. The Bank of England has also recognised that a collapse in the value of oil, gas and coal assets as nations tackle global warming is a potential systemic risk to the economy, with London being particularly at risk owing to its huge listings of coal.

http://www.theguardian.com/environment/2013/apr/19/carbon-bubble-financial-crash-crisis

Oil prices are really set by speculators and that class of people do not have any incentive to acknowledge the evidence before they are forced to. However, they do have an incentive to sell off as much of this stuff as they can before restrictions begin to have their necessary effect - even at the cost of selling at a lower price into a falling market.

Originally posted by finnegan
There is a far bigger story to falling oil prices than people are willing to discuss here. The reality is that oil and gas reserves are vastly over valued in our stock markets because they fail to accept that, in reality, most of those reserves can never be used. They will either be closed off to protect our environment from climate change, or climate chan ...[text shortened]... ave their necessary effect - even at the cost of selling at a lower price into a falling market.

Where have we heard the chicken little, oh woe to us, the sky is falling, scare mongering before.

NZ Greens presser from 2008:

https://home.greens.org.nz/press-releases/10-litre-petrol-prices-decade-wake-call

How many 'point of no returns' have been passed, then readjusted into the future. (If we pass the point of no return then all the calls for regulation become redundant).

Gasoline is a fantastic product, we can be grateful for the lives we live now because of gasoline, those that don't have it want it. Have you ever tried to push your car 100m? Now imagine a 20mm cube sitting on your table in front of you, that's all it takes, air-con, radio, navigation aid, radar detector.

...and you think someone is going to 'close it off'.

If the world goes through some kind of catastrophic climate change, an ice age maybe, or toss the coin again, a rise in temperature, it is gasoline that will be the savior of millions of lives.

Originally posted by Wajoma
Where have we heard the chicken little, oh woe to us, the sky is falling, scare mongering before.

NZ Greens presser from 2008:

https://home.greens.org.nz/press-releases/10-litre-petrol-prices-decade-wake-call

How many 'point of no returns' have been passed, then readjusted into the future. (If we pass the point of no return then all the calls for re ...[text shortened]... coin again, a rise in temperature, it is gasoline that will be the savior of millions of lives.

Oh that's okay then. Thanks.

Originally posted by robbie carrobie
Russia, Iran and Venezuela, all good friends of the US.

You were doing alright until you spewed out this lie.

Originally posted by Suzianne
You were doing alright until you spewed out this lie.

Oh dear. Even saint Robbie is sufficiently worldly to guess that Russia is not best friends with the USA. Irony often creates havoc with Americans reading posts from Brits. If you read the preceding sentence carefully you would appreciate that the phrase you object to is ironic and means the opposite of what it says:

The only logical and reasonable conclusion is that there must be some other motive and when one sees who it hurts, all fingers point to the US.

The idea is not that this hurts the US (primarily) but it hurts the enemies of the US and is done to benefit US interests - maybe the interests of the US government more than the people but hey, that's democracy.

Originally posted by finnegan
Oh dear. Even saint Robbie is sufficiently worldly to guess that Russia is not best friends with the USA. Irony often creates havoc with Americans reading posts from Brits. If you read the preceding sentence carefully you would appreciate that the phrase you object to is ironic and means the opposite of what it says: [quote]The only logical and reasonable c ...[text shortened]... rests - maybe the interests of the US government more than the people but hey, that's democracy.

Considering who's post it was, and that irony is usually completely lost on him, you could forgive me for thinking he was completely serious.

Its a little strong to say that those countries are enemies of the USA.

The post that was quoted here has been removed

Do you know how to spelt booorrrrrriiiiiinnnnngggg

Originally posted by robbie carrobie
I suspect it was collateral damage to other economies like the UK and even Canada that the Americans were prepared to risk. I don't know who formulates American foreign policy but they are playing a very dangerous game.

Another example of why even smart businessmen can't totally control markets. Markets have their say, not to dictate, but they can't be ignored.