Some "free market!".
Nicholas Kaldor, 1976: "commodity prices are demand-determined" = joke today.
OPEC ups estimates for the amount of shale production it's knocking out of #oil market | https://t.co/HMB6RjFlbV pic.twitter.com/oZNzx84syq
— Will Kennedy (@wenkennedy) January 18, 2016
Their problem is that that they are directly confronting US business interests in trying to take down the shale market. They are also confronting the US securing energy independence.
ReplyDeleteThat is a death wish. It's only a matter of time now.
Tom, I think you're wrong. These are US client states. They wouldn't do anything like this without the green light from the capo di tutti capi in the White House. US officials have been in such close contact with the Gulf dictators that they may as well buy homes in the region. The US has given the Gulf states the go ahead to drive the oil price down to destabilise Russia. If that means shale goes to the wall, that's the way it has to be. This is geopolitics of the highest order. If you want another American century, then competitors have to be put in their place.
ReplyDeleteWho are the competitors that may throw a spanner in the works? Presently Europe is utterly supine. Japan is on board as long as it has issues with South Korea and China. India has its problems with Pakistan, and the US is taking advantage. There are, however, two stumbling blocks ahead. The lesser one is South America. It is out of control, so something will probable have to be done. The more problematic issue is, of course, China. This is a nut with no cracker. All the tomfoolery in the South China Sea has not had the desired effect. A more circuitous route is necessary: take down its allies (Russia), ensure no Korean unification, initiate territorial disputes between its neighbours (Japan and South Korea), try to weed out China's economic spheres of influence (Thailand, Burma, Malaysia, Indonesia, Vietnam, etc). It's extremely dangerous geopolitics, but that's what's necessary if you want a New American Century. Shale is just road kill.
That may be true, John, but the US elites are competitive and crossing the energy sector is asking for trouble since they (and the financial oligarchs) greatly outweigh the nomenklatura.
ReplyDeletehe US ambassador prior to the first Gulf War, April Glaspie, gave Saddam the OK to take Kuwait. Look what happened pretty quickly thereafter.
The US state exists for the ownership class, and the alphas are the energy and financial sectors.
Tom what you might look at is how much the Hudson and Delaware basin refineries can handle in the light crude like from the Persian Gulf states... I think these are the only US refineries that input the light crude...
ReplyDeleteThe Bakken oil is light too, so it moves by rail across the north and down the Hudson valley into NJ and DE basin refineries as I understand it...
So if the Bakken producers ever get to the point that they can fully supply these NE light crude refiners then at that point we wouldnt use the Persian Gulf stuff... I guess unless the Persian Gulf people can undercut the Bakken people to the NJ and DE basin refiners... that point might be the new floor... which we might be at it in the $30 range here...
Recent EIA reports have S.A. iirc supplying 13% of US imported crude, not 13 of crude but 13% of imported crude:
http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6
Its not that much anymore... we could do without them pretty quickly if we had to... total Persian Gulf is 1.88M bbl/day SA portion 1.17...
Might have to have the military go into Venezuela to secure/improve that source (just bring plenty of toilet paper...) if SA really goes down the shit tubes but looks very manageable at this point imo....