Filed under: Capitalism, Economy, Energy, Europe, Iran, Iraq, Latin America, Middle East, National Security, The United States | Tags: Disastrous for Our Enemies, Lower Prices Are Good for Us, The Price of Crude Oil
The price of crude oil is tumbling downward towards $80 per barrel. The Brent crude price of $82.60 is the cheapest since 2010.”On October 1, Saudi Arabia’s national oil company announced that it had abandoned a policy of price protection and would start to focus on protecting its market share. Combined with falling global demand and rising supplies elsewhere, oil prices have fallen accordingly.
Natural gas supplies are plentiful and warm weather so far means weak demand, which means lower costs for natural gas.
For our fracking, the break-even price is around $50-$70 bbl. Supply is bulging. Gasoline prices will come down, transportation prices will come down, which means that costs at the grocery store will ease.
States like Iran, Venezuela, and Iraq can only balance their budgets at oil prices ranging from $110 to $135 per barrel. This is good. If oil prices stay below $90 per barrel for any length of time, there will be real financial squeezes, and even regime change in Iran, Bahrain, Ecuador, Venezuela, Algeria, Nigeria, Iraq or Libya and would give Vladimir Putin some real trouble. Couldn’t happen to a nicer bunch.
It’s not clear what Saudi Arabia is up to, but they are definitely not approving of Iran’s nuclear ambitions, nor of ISIS’ ambitions either. They may be just protecting their market share, as we are close to surpassing them in production.
If we start exporting natural gas to Europe, that would relax the strangle hold Russia holds over their energy supplies.
It’s good news, just when we need some.
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