The Avengers: the price action of oil today had absolutely nothing to do with the fact that the Obama administration continues to destroy the domestic oil industry (lease issue on federal land in the west, extended the ban for off-shore drilling along the eastern seaboard and Alaska for another seven [yes, seven] years, the ill-advised moratorium on deep sea drilling in the Gulf of Mexico, and now the new regulations on deep sea drilling in the gulf) but somehow it brings The Avengers to mind. Yes, I know it's a stretch.
But, think about it. The world runs on oil. The US has some of the largest oil reserves in the world. The Chinese economy grew even more than expected. And the Obama administration takes a significant amount of oil reserves out of world play. Just saying. (Yes, I am fully aware that current supply exceeds demand. And, yes, I am fully aware that even if these areas were opened up, it would take years for them to be productive.)
On another note, natural gas continues to creep up. Natural gas was up 6 cents today, and closed at $4.33.
Heh, 'significant portion of oil reserves'? What, six months of running the U.S.? Woohoo. Not worth the bother. The fact is, we're past peak oil, and there are no more BIG reserves left on the planet, and the ones that exist are in decline, with the exception of a decent-sized one in Iraq. Whatever we do or don't do with the eastern seaboard, oil production will still only be around 40 million barrels per day by 2030, and the world will still be demanding more than double that amount.
ReplyDeleteResult? Oil climbs past $200 per barrel by 2020, and by 2030 we're at 35% unemployment or more, food prices are at least triple what they are today (after adjusting for inflation) and law and order will either be completely gone by then (along with electricity and all that cool stuff), or it will be breaking down and food and oil rationing will be in place, enforced by soldiers.
That's why I said that the price action today had nothing to do with the the actions of the Obama administration, but I did notice that the Indian press did report with emphasis that the eastern seaboard ban was extended.
ReplyDeleteWith regard to peak oil, etc., I heard the same arguments during the 1973 oil crisis and the oil embargo. It is what it is.
As JRR Tolkien said, "We all have our myths."
As Christopher Hitchens said, "We have to choose our future regrets."