For the better part of the last century, crude oil prices have swung like a pendulum, pushing and pulling the fortunes of nations. More often than not, global supplies of the volatile commodity were controlled by the rulers of desert domains who would otherwise have been powerless had it not been for the oil that bubbled beneath their thrones.
That pendulum is on the move again, sending the price of oil cascading to less than $45 this winter from more than $100 a barrel last June, and it may fall further in the months ahead.
On the surface, this latest oil boom gone bust may feel like history repeating itself, but there is a vital difference this time: The center of the oil world has spun from the sands of Saudi Arabia to the shale oil fields of Texas and North Dakota, a giant new oil patch some wildcatters have begun to call “Cowboyistan.
”Put another way, the United States is overtaking the Organization of the Petroleum Exporting Countries as the vital global swing producer that determines prices. That remarkable change has been building since 2008, as American shale fields accounted for roughly half of the world’s oil production growth while American petroleum output nearly doubled.
And shale production methods have proven highly adaptable to market conditions. Not coincidentally, nearly all the advantages of the price swing are moving in Washington’s direction.
Most American consumers and industries have benefited from a sharp drop in gasoline prices and other energy costs. And abroad, the economies of oil-producing adversaries like Russia and Venezuela are reeling.
Rene G. Ortiz, a former Ecuadorean oil minister who also once served as OPEC’s secretary general, noted that as recently as late 2008 and 2009, the last time oil prices slumped, OPEC cut oil production by four million barrels a day to support prices, and the move stabilized the market in a relatively short time.
“Why doesn’t Saudi Arabia think that couldn’t work again today?” Mr. Ortiz asked. “Because of the soaring U.S. production. Today’s OPEC is thinking about market fundamentals rather than manipulating the market because it doesn’t have the same power it once had.”
Last Nov. 27 was a turning point for OPEC at its meeting in Vienna. It was a turbulent session, though behind closed doors, where the firebrand oil ministers of Venezuela and Iran faced off with the dour Saudis and their Persian Gulf allies. The Venezuelans and Iranians, backed by Algeria, Nigeria and a few other countries that need every cent they can get from their oil exports, argued that OPEC should slash production to strengthen prices exactly as the cartel did when the crude price tumbled during the Asian financial crisis in the late 1990s, and again after the tech bubble popped in the early 2000s, and finally as it did again just six years ago.From CNN:
Americans see ISIS as a bigger threat to the United States than Iran, Russia, North Korea or China, according to a new CNN/ORC poll. Overall, 68% say ISIS is a very serious threat, compared with just 39% who say so about Iran, 32% about North Korea, 25% on Russia and 18% on China. Nearly 9 in 10 see ISIS as at least a moderately serious threat.The president sees ISIS as a minor threat that we could take out any time we want. The fathomless ignorance of President Obama -- the WSJ.
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Soccer At An Early Age
Our youngest granddaughter learning the finer points of soccer:
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