So all of these stock brokers are going to violate several laws and go to jail, lose their careers, and wealth for some political outcome which doesn't benefit them financially...seriously? But the real problem you face is the historical price data just doesn't support your notions.
So it went FROM 115 in June to 85 in Nov. That's $30 US that it dropped by just in time for the elections. And you tell me it wasn't artificially dropped? I'm still sticking by what I've said that the drop happened for no other reason than the election to help Republicans for they are by far the vast owners of oil companies in America. The price of gas is 15 cents in Venezuela and they make a profit , enough to keep the oil companies there in business so why is it they can sell oil so cheap but many others can't? Greed is why.
No, they're not. The government runs the oil industry in Venezuela and they set the prices. From the NYT earlier this year: ============ By some estimates, the government is giving away $30 billion worth of gasoline, diesel and other fuels each year, a huge loss at a time when it is running a large deficit, forcing it to print money. The state oil company is borrowing millions of dollars from the central bank to keep running, the country endures chronic shortages of basic goods, and last year inflation hit 56 percent, one of the highest rates in the world. ============ Because all the cheap oil has been drilled. ========================== ExxonMobil Donates $18 Million to World-Renowned Houston Health Institutions Grants made to The University of Texas MD Anderson Cancer Center, Texas Heart Institute and Texas Children’s Hospital Contributions to fund new medical research, prevention programs and patient care ExxonMobil expanding its long-standing presence in the Houston area Oct 2, 2014 - 12:00 p.m. EDT HOUSTON--(BUSINESS WIRE)--ExxonMobil today announced $18 million in grants to Houston health care facilities to support cancer prevention and cardiovascular research, expand pediatric care for children with autism and enhance pediatric liver disease research and clinical services. The University of Texas MD Anderson Cancer Center will receive $10 million; $5 million will go to the Texas Heart Institute and $3 million to Texas Children’s Hospital. “ExxonMobil has had a long and deep involvement with Houston and Texas,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation. “These world-renowned institutions are helping improve the health and lives of families in the greater Houston area and around the world, and we’re proud to support their important mission. =============================
I just never heard much of oil companies doing much for anyone but themselves. I wonder if there are many doing this? What Does One Barrel Of Crude Oil Make? One barrel of crude oil contains 42 gallons which creates 45 gallons of petroleum products About 47% of each barrel of crude oil is refined into automobile gasoline In the US an average of about 2.5 gallons of crude oil are consumed per person each day The US imports about 40% of its required crude oil and about 52% of that amount comes from OPEC countries ProductShare of Total U.S. Petroleum Consumption Gasoline47% Heating Oil/Diesel Fuel20% Jet Fuel (Kerosene)8% Propane/Propylene6% Natural Gas Liquids and Liquid Refinery Gases6% Still Gas4% Petrochemical Feedstocks2% Petroleum Coke2% Residual/Heavy Fuel Oil2% Asphalt and Road Oi2% Lubricants1% Miscellaneous Products0.4% Other Liquids0.4% Aviation Gasoline0.1% Special Naphthas0.04% Waxes0.04% Kerosene0.02% Source: EIA November 2013 Data So a barrell can earn over 500.00 in total from all products made from oil. Why then does a barrell cost 125.00? Because they can make that much even though they don't need to. Didn't know that about Venezuela for that country has always had low oil prices there but they also sell that oil overseas to America and other countries for a profit.
Kuwait produces about 1 percent of the worlds oil supply so even if it were to halt production it still would not affect oil prices. That's why I said they artificially pushed the prices up.
Now you are just talking out of your arse. Think, for God sake! You would not expect to get away with this sort of lazy assertion in science, so why do you think it is good enough in economics? Oil cost less in the 1960s because: (a) demand was a tiny fraction of what it is today , (b) the Yom Kippur War had not yet galvanised the Arab oil producers to form a cartel and control production levels to get prices up, ( c ) most of the oil was low cost to produce, from simple holes in the ground in easy places, (d) government had not yet realised they should tax it to earn revenue and discourage profligate use. This article has some up to date info on the cost of oil extraction in Venezuela (PDVSA is the nationalised monopoly that does it all in that country): http://www.reuters.com/article/2014/10/15/venezuela-pdvsa-idUSL2N0SA1C320141015 So on the one hand they stay in the black on production costs vs, crude market price, down to about $50/bbl, but on the other hand Heavy Ven crudes don't make much motor fuel. So their refining operation, which provides fuel to the Venezuelan motorist, has to import more expensive naphtha. And of course the government controls the price, for political reasons. So I am not at all sure that PDVSA is in fact making a profit at the moment. Do you have information that says they are profitable? Or are you making a lazy assumption? As for oil companies not building hospitals, there is no reason why they should, any more than we should expect an airline or a car manufacturer to do so. But, as it happens they do, as this example from the Economist in 2001 shows: http://www.economist.com/node/617266
A 1% reduction in supply will certainly affect prices in a tight market, especially one with inelastic demand.
I'm assuming because their oil refineries and oil companies are still operating they are making enough to keep them in production. Perhaps the oil they sell outside their country keeps them afloat, I can't tell for facts from them are spartan. Today we can extract oil from deep in the water and we have been increasing wells every year. Then we have fracking which can get even more oil out. We also have the Alaska oil fields which, until the 1970's we didn't.
And has dropped even faster since. It **was** artificially dropped, just not for the reason you said. You really need to stop fantasizing and actually start reading the news. The drop in oil prices has an obvious and verifiable cause. And by the way, the one person in the US with by far the most control over oil prices is Obama. He can choose to fill or release oil from the US strategic reserves, which can manipulate prices. Some economists are calling for him to fill our reserves to help drive prices back up and he's chosen not to: http://www.fool.com/investing/gener...ent-obama-should-refill-the-us-strategic.aspx
And your point is? You have an oversimplified view of the oil industry. There are a some integrated oil producers, meaning the explore, drill, refine and distribute oil and oil products. But there are many more who are not integrated producers like Holly Frontier which is only a refiner or any of the oil pipeline master limited partnerships. The reason oil prices are down and headed lower is because the US is producing more oil and world oil markets are awash in oil.
Actually, your numbers are wrong again. Kuwait accounts for 3% of world oil production not one percent. Saudi Arabia accounts for 14% of world oil production. And the US is projected to by the world's largest oil producing nation next year. http://uk.reuters.com/article/2013/11/12/uk-iea-outlook-idUKBRE9AB0N920131112
Right. Deep water wells are very expensive, and thus cannot be used until the cost of extraction exceeds what the cost of a barrel of oil is. Thus high oil prices are enabling the more expensive drilling.
I don't know what you are trying to get at here or how you think it is relevant. But the relevant number here is the crack spread...the difference between the price refiners pay for oil and what they can sell the refined product for and it is nowhere near $500/barrel. Crack spreads typically run between $8/barrel and $20/barrel.
I think what is getting lost here is the relevant number which is the marginal or incremental cost of oil production. There is a lot of front end investment in oil wells be they at sea or on land. As long as the incremental cost, the cost of pumping out a barrel of oil is less than the selling price of that barrel of oil, oil companies will continue to pump oil - even if the selling price doesn't cover all of the fixed costs (e.g. drilling & exploration). Another way of saying that is as long as marginal revenues exceed marginal costs, oil companies will continue to produce oil.
Yeah, yeah, everything American does is a conspiracy against Mother Russia and more specifically Mother Putin - and Stalin's paranoia lives! Please Register or Log in to view the hidden image!
No it's for US own political agendas, they need their fracking oil being useful in future and cant let the low prices later on cause another economic recession. That and yes they are using it to push down on Russia.
Have you learned nothing living in the US? The US is very decentralized compared to Russia. The US is not in any way like the top down authoritarian regime you know in Russia. The US government does not dictate how many wells will be drilled and how much oil will be produced. Being Russian, I can understand how you might have difficulty understanding that coming from a land where that is the norm and has been the norm for centuries. Two, unlike Russia the US economy isn't a one horse economy. Unlike Russia, the US has never had nor will it have a recession caused by are decrease in US oil production. The US was fine before oil shale production and it will be fine after oil shale production. Unlike Russia, the US economy isn't tied to oil production. Low oil prices strengthen the US economy. And as for pushing Russia down, Russia is doing a fine job of pushing itself down as it always has...no need for anyone else to help.
Hearing Russia complain about a country selling gas and oil for political reasons is like hearing ISIS complain about police violence in the UK.
Regarding refineries it is not so simple. If you start to make a loss, you generally don't just stop production immediately. You still have wages to pay, for a start, whether your labour is active or just sitting there. You probably also have interest on debt to pay and various other running costs that do not go away if you close your plant. Furthermore, shutting down refineries will lead to extra cost if and when you re-open them, due to the nature of the processes involved. And also, the supply disruption caused by a refinery closure can have nasty political blowback, as people experience shortages of what is often regarded as a vital commodity. So it's a big step to take. Often what happens with refineries is they keep running and take a view on whether they can return to profitability (either through higher prices, greater volume of sales or reductions in your costs) or whether it is a long term hopeless case, in which closure or sale plans would be put in train. In the Venezuela case, the company is government owned and simply would not be allowed to cease operations, due to the politics.
