tag:blogger.com,1999:blog-1592992209402300549.post502276191465635453..comments2024-03-28T08:06:43.198-04:00Comments on The Silicon Graybeard: Behind The Virus Shock, The Oil Price WarSiGraybeardhttp://www.blogger.com/profile/00280583031339062059noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1592992209402300549.post-3235272847141890172020-04-01T13:21:31.274-04:002020-04-01T13:21:31.274-04:00Sometime in the last 10 or 20 years, it occurred t...Sometime in the last 10 or 20 years, it occurred to me that it could be a viable plan to bleed the middle east of their oil and not drill for our own until it was more profitable. When Saudi oil was just running out of the ground under its own pressure, how do you compete with that and pay for drilling? <br /><br />It's almost a perfect plan to be the only supplier standing after they run out and then charge whatever it will bear. <br /><br />I just can't imagine any American politician thinking of that 50 years ago. <br /><br />Complicated by there now being the political force to end use of petroleum forever before we get there. <br />SiGraybeardhttps://www.blogger.com/profile/00280583031339062059noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-40167528778271139322020-04-01T00:56:42.475-04:002020-04-01T00:56:42.475-04:00I've always said that we should rely on Saudi ...I've always said that we should rely on Saudi oil right up until we pump them dry, then we win. Eff those Arab oil ticks. Then we crank up the domestic supply we have always had.TwoDogshttps://www.blogger.com/profile/06400034283241205713noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-86473710793324632020-03-31T20:08:53.660-04:002020-03-31T20:08:53.660-04:00I agree with the comments above. I doubt either co...I agree with the comments above. I doubt either country will live up to their boasts, but that isn't surprising since they both have a history of doing it.<br />A few other things I'd like to bring up:<br />- I have not heard previous credible claims to Russia having large reserves. I suspect that if they did have those reserves, they would not have made the large cuts to social services (particularly the elderly) and military spending that they have over the last 5 years since these are core Putin constituencies and potential sources of unrest.<br />- Yes prices have dropped, but in the current virus hysteria, shipping is more expensive and getting very irregular, so reliable sources of oil that can be delivered by pipeline are going to be sought even if it is more expensive. Also note that the claimed difference in prices isn't very much, and that difference and then some would be made up by shipping costs in normal times.<br />- One thing that isn't normally mentioned is that the 2014/ 2015 price dropped showed that US oil production is much more elastic than many people realize. With most new production coming from private land in the US, it is easy for companies to delay new wells or throttle down existing wells to adjust to the current market. In contrast to big projects developing new fields, the costs are spread out and come along with revenue instead of in front of it - the risk is much lower.<br />- I've read credible articles wondering if the Saudis have as much reserves as they claim. The costs of keeping their people happy are clearly growing, and the costs of war in Yemen are also ballooning. Don't forget that the Saudis have often been opaque about their finances and that they claim whatever valuation fits their current goals, so any monetary claims they make should be taken with quite a few grains of salt. They aren't as bad as the Chinese, but they are not up to Western standards of accounting.Jonathan Hhttps://www.blogger.com/profile/10476185257203343474noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-87251503533866588482020-03-31T06:59:48.914-04:002020-03-31T06:59:48.914-04:00I somewhat fear this more than the Wuhan Flu.I somewhat fear this more than the Wuhan Flu.Ed Bonderenkahttps://www.blogger.com/profile/03724552853113809036noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-59642548273428382392020-03-31T00:21:57.241-04:002020-03-31T00:21:57.241-04:00The oil business and airline business are a lot al...The oil business and airline business are a lot alike. The oil and airplanes are always there but who owns them can sure change. Gas prices for regular at Osage Beach was $1.67 last week. If you base prices in terms of the value of the old silver dimes that is the cheapest gas I have ever bought.indyjonesoutherenoreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-13916851405430611542020-03-30T21:41:23.845-04:002020-03-30T21:41:23.845-04:00It is one thing to say "We'll produce X a...It is one thing to say "We'll produce X amount of oil." It is considerably different to actually produce X amount. <br /><br />My feeling is that both Russia and Saudi Arabia are playing verbal chicken without being able to back up their claim. <br /><br />Will be interesting to see if they actually can produce what the speculators have paid for. <br /><br />The big question is, what will happen if their projections are all vapor, and they are unable to produce what futures have been sold?Beanshttps://www.blogger.com/profile/15293778848879361153noreply@blogger.com