How $30/Barrel Oil Could Save the World 44 comments
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The UK and France took action last week to limit speculation in oil prices. The US government is also seeking a way to limit oil price speculation. It is obvious that lower oil prices can help most corporations and also help people in the price of gas they pay at the pump, which in turn can end the recession.
However, there is an even bigger reward for bringing down the price of oil to $30.00 a barrel, which is probably the correct price as governed by today's supply and demand ratio. The lower oil price can bring an end to Iranian backed terrorism and peace to the Middle East and Afghanistan.
The more money Iran generates from high oil prices, the more money it has to fund terrorism. For every extra dollar increase on a barrel of oil, the more bullets and guns are given to the Taliban and Al Qaeda to kill Soldiers fighting for freedom and democracy.
If oil prices were no longer traded as a speculative commodity and the prices regulated around $30.00 a barrel for the next few years, not only would it bring a swift end to the world recession, it would also kick the legs from under the Iranian government. It would give fresh hope to the majority of Iranians who crave an open election, democracy and freedom of choice.
When world economies recover, the war in Afghanistan is over, and a new democratic government is elected in Iran, the price of oil can be brought in line with supply and demand within certain limitations. The world can never again allow oil prices to be manipulated by speculators who have no connection to the oil industry.
Even the most ardent free market voice will agree restricting speculation on the price of oil is a price worth paying if it stops state sponsored terrorism and brings about democracy in Iran… Restricting oil speculation and regulating oil at $30.00 a barrel will bring about the changes the world so desperately needs. If Iran if staved of oil revenues that feeds terrorists and the guns and ammunition that kills American soldiers, it will be a worth the US government's efforts to act decisively right now.
The time is ripe for authentic changes and the world hungers for fairness and justice for everyone.
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This article has 44 comments:
If you want to see what the results of a artificially constrained oil supply look like, research the oil shocks of the 1970’s.
Personally I'd like the oil prices to stay up there so we won't lose the incentive to switch from oil to something friendlier.
And what makes you think that western democracy and Anglo Saxon property rights/ deficit-based money has anything to offer in the Middle East?
The same values underpin Juda'sm, Christianity and Islam and it's a shame that Israel and Iran's governments alike appear to have forgotten them.
poppy growing in afghanistan funds the taliban.
islamic "charities" operating all over the world fund al qaeda.
i would be so glad to see the iranian nuclear bomb program starved for funds.
> jack
As for denying income to Iran in order to "kick the legs out from under the Iranian government", please allow me to call that suggestion 'Fruit Cake'.
Will you please tell me how you going to get the greedy
people who own the Oil, to sell it to us for $30 a barrel ?
Even if you somehow able to accomplish this impossible task, it would be a disaster.
Every alterative fuel on the market would be doomed.
Every alterative fuel about to come on the market would suffer the same fate.
Who is going to invest millions to build an Electric Auto ?
Not to mention the funds needed for the battery.
Who is going to buy an expensive Electric Car, when gas cost 75 cents a gallon ?
If Oil cost $1 a barrel, it would not bring peace to the Middle East.
The two parties in Iraq have hated each since 750AD
(look it up)
Bobby Curto
Ft. Lauderdale
Re all the pathetic political claptrap, I'd actually rather rely on a source like the following than what sounds suspiciously like dribble that may have come out of the mouth of a man who reckoned Iraq had weapons of mass destruction:
en.wikipedia.org/wiki/...
But seriously, if you just want Iran's oil on the cheap then write your congressman a letter saying you reckon it would be a good idea to go and take it off them. But would it be OK if your allies stayed home this time please?
This one is much better
Does that solve:
- 16-20% unemployment
- erase not just our huge national debt, but Japan's, most of Europe, etc.
- will that magically reflate home values to the level of insanity they are tumbling from
- will that pay off underwater mortgages, fill empty malls, pay of crushing credit card debt
- will that keep our idiot government from going ever closer to statism, crushing private enterprise
Unfortunately, the Chinese and Indians will have to reduce their oil consumption, too, if there is to be real impact on the flow of cash to bad actors. The Chinese, at least, for all their efforts to acquire oil, are moving forward on alternative energy as well. But it's such a big country with so many people emerging from poverty, that it's hard to say that the oil export business will ever wane.
Even assuming Mr. Levy's suggestions could be implemented it would be a blessing.....for China and the rest of the world, who would be happy to bid $35 to $75 a bbl to assure supply. The U.S. market is no longer the principal driver of demand as these markets explode.
Any general ideas appreciated.
On Jul 12 12:28 PM Mad Hedge Fund Trader wrote:
> How about $10 oil? No one was buying oil at $73.50 because they plan
> to burn it, use it to drive more miles, make asphalt or plastics,
> or rub it all over their bodies. They are buying Texas tea because
> they hate the dollar and there is no other surrogate reserve currency.
> Some of the biggest buyers of crude now are the oil producers, desperate
> for any appreciating asset they can park their revenues in size.
> This is why you can now walk across the Caribbean and not get your
> feet wet, jumping from one storage tanker to the next. The world
> is choking on surplus crude. Does anyone see anything wrong with
> this picture? Even perma bull Boone Pickens has a target of only
> $75. I hope he remembers to sell this time (sorry for the cheap shot
> Boone). The problem is that when you have so many hedge funds, financial
> players, and non consumers bunching up in a trade, the turns can
> be particularly vicious. All it would take is a little more evidence
> of a double dip economy, or even just an innocently strong dollar.
> Watch those green shoots with a magnifying glass.
He has abandoned the policies he stated he stood for while running for election at every chance when faced with industry pressure. He has allowed wall street to manipulate the markets increasing borrowing costs, driving up the price of oil , delaying recovery.
He has knowingly talked about green shoots when there were none, creating false expectations. If we wanted a president we knew would lie to use we would have kept bush.
He has spent trillions bailing out wall street to keep credit flowing while American's need help to reduce debts.
He has staffed the White house with wall street insiders.
If you believe, like I do, that Mr. Obama needs to change course and has had enough time I urge you to write the white house explaining why he has had enough time, and why he doesn't deserve more. Below is the link:
whitehouse.gov/con.../
A de-facto tax cut for American motorists. Each $1 per barrel drop in oil increases U.S. GDP by $100 billion per year and every 1 cent decline in gasoline increases U.S. consumer disposable income by $600 million per year.
Just a little FYI:
Another example of the effects of speculators in the crude oil commodities market was the “ Rogue Trader” who with a 16 million barrel order of crude, pushed up the price of crude oil $4 in the blink of an eye. (that’s just twice the amount of oil Saudi Arabia’s daily production) So one can keep believing in the supply and demand theory, or take off the blinders.
What the hell you are talking about? Get the pill and relax. These are not connected subjects or very little correlated. Stop fantasizing about something non existent. Stop looking for a foes abroad, look for then inside the border.
At the moment the recession/depression is destroying demand faster than the decline rate, so the effect is invisible. But exploration and development of new fields is at a stand still. This supply destruction won't be felt until we try to reverse the economic decline, when we'll find we don't have enough oil to grow our economy AT ANY PRICE.
The entire global economy is based on cheap crude oil, which is very close to gone. What is left is lower quality, more expensive to produce and runs out faster. Our economy can only run at the rate we can pump oil, which is quietly going down.
I'm not saying we won't have oil, but the world of 60 Mbdp looks VERY different from the 74 Mbpd world we live in today
.
In the end this is good, because this is the only way we'll ever switch away from oil is to make it abundantly clear to everyone on the planet, we need to switch, and $200 oil is the only way to do that.
BTW: $200 oil is still cheap!
The Gates-Rockefeller Myth
mises.org/story/388
This statement alone shows how ignorant you are.
For some good reading on this subject check out this site.
Global Research.
www.globalresearch.ca/...
Also read more about it at this site:
losangeles.injuryboard...
In 1933, a few years following the stock market crash, Congress passes the Glass-Steagall Act, in hopes that regulating banks will help prevent market instability, particularly amongst Wall Street banks. The purpose of the act is to separate commercial banks that focus on consumers from investment banks, which deal with speculative trading and mergers.
What I can say, is if commodities crashed and oil went to 30 the government would be free to do a 3rd stimulus, float more bonds and engage in yet more QE; which, as far as I can tell, doesn't do much aside from slow down the economic collapse (thereby attenuating the down cycle and making it worse), deny the economy the benefit of a strong dollar and low prices (which helps supply and demand strike a new equilibrium and encorage prudence and savings), and dig the US into an even deeper deficit.
When, in the history of history, has a government controlled program produced a better result than the laws of economics?
Wasn't it price controls in the seventies that had us sitting long lines to buy a few gallons of gasoline? At the time, I was in the Coast Guard and had to make a long move; we didn't dare let out gas tank get below half lest we could not find another filling station that even had gasoline.
If $30/barrel oil would be good, wouldn't $10/barrel be even better?
Simple economics will not let the price of oil go below the cost of production, plus profit, for very long periods. A government forcing a lower price, below the cost of production, plus profit would simply shut down exploration . . . and even production from wells (or oil sands) with a higher cost, PLUS PROFIT.
I think you need to drive over to UBC (Univ. of British Columbia) and see if you can audit their Economic 101 class next semester. I am not educated in political science, but it looks to me like you could use a few courses in political science as well, considering your statements on the Middle East.
Though I agree generally with making basic services not-for-profit, at least for private consumers, we need ridiculously high oil prices. If speculators and market fundamentals don't take care of it, government should with VERY HIGH taxes on fossil fuels. The day that we can't afford gas is the day we start seriously looking elsewhere. And that day needs to come sooner than later, before there really isn't any left and modern life grinds to a halt.
It's all about incentives to produce. Price controls haven't worked in the past and I'm not sure they would work in this case.
Where I can see your argument going is to nationalize oil companies, which has seen limited success (Stat-oil in Norway seems to be working). Although I don't agree with this either, it makes more sense than putting a ceiling on oil prices.