I truly think it was deliberate. Saudi became less powerful and freaked out, and flooded the market with even more oil, generating a nice nice death spiral. People don't seem to think the prices will recover, if at all, until after 2020.
Now Iran is about to come online...What happens then?
Thirty oil companies in Houston have gone bust in the last couple of months. The New York Times says forty US wide but this sounds out of date to me (too low).
I'm not the only one in environmentalism world to think this is kind of good. Kind of. NB beautiful souls and excluded middle fans: I said kind of.
By the way--Grist's predictive piece (from this time last year) is wrong on one of its “con” arguments in the pro and con section. More oil has not been burned. Your car has a finite gas tank, etc. You should read Fuel Fix, part of the Houston Chronicle, regularly.
Because no one gives Obama credit for anything anyway, no one was paying attention, which was great, because you don't even need Econ 101 to see how it was all going to go very very wrong for the oil industry. The market is literally flooded, the dreaded Canadian pipe has lost all its charm even for those who were into it, exploration and drilling have gone way way down.
Clinton by contrast forced car companies to make electric cars, and looked all triumphant on the TV while they looked all downcast. Soon they figured out how to recall all the electric cars.
It's your yin style of leadership versus your yang.
Interesting isn't it, that this all began coincident with COP21. Almost exactly coincident. It's not so difficult to predict how and when flooding the market will begin to ruin the industry.
Obamacare was designed to kick in gradually, starting at the beginning of Obama's second term...so if you didn't vote for him, it might most likely evaporate...
And since the oil slide began, there has been a net progressive redistribution of wealth, the biggest in quite a while, I understand. (The actual sum is like about $600 per person per year on average, which is teeny weeny, and tells us something about the political situation in the USA--yet better than nothing.)
Discuss.
Reference:
HOUSTON — The world is awash in crude oil, with enough extra produced last year to fuel all of Britain or Thailand. And the price of oil will not stop falling until the glut shrinks.
The oil glut — the unsold crude that is piling up around the world — is a quandary and a source of investor anxiety that once again rattled global markets on Friday.
As prices have dropped, the amount of excess production has been cut in half over the last six months. About one million barrels of extra oil is now being dumped on the markets each day.
But that means the glut is still continuing to grow, and it could take years to work through the crude that is being warehoused, poured into petroleum depots or loaded onto supertankers for storage at sea.
The shakeout will be painful, taking an even bigger toll on companies, countries and investors.
Global stocks sank sharply on Friday, as the price of oil slipped below $30 a barrel. The glut was at the heart of the tumult, as investors worried that the demand from China would drop and supplies from Iran would grow.
“The glut is the 800-pound gorilla in the room,” said Steve McCoy, vice president for drilling contracts at Latshaw Drilling, an Oklahoma service company that prospered in recent years from the American shale boom. “The world simply produced too much, and now we have to use it up or many oil-producing countries and some oil companies may drown.”
Just a couple of years ago, producers and petro-states were making vast fortunes drilling and pumping relentlessly to fuel expanding middle classes in Asia, Latin America and Africa. But suddenly they are producing more than anyone needs at a time when China and other rapidly growing economies, once hungry for energy, are pulling back.
The extra oil has sent the price of crude into a tailspin, down more than 70 percent over the last 18 months. --New York Times
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