Why is Saudi Arabia doing this?

We should exert some lever on them. What could we do??? Pull out our military and let Iran have them? Expel their rich family members who are students?

 

If we're protecting them against Iran (or is it Russia?) then we're really protecting our "imperial asset" from Iran because why would we care otherwise? I suppose it's not our asset anymore to control. I like the idea of letting Iran in but maybe that means more terrorists on the loose?

 

The budgets and big welfare states of the Gulf countries, including KSA, are heavily dependent on oil being above a certain level. These corrupt and incestuous regimes basically buy off the loyalties of their people with $$$, welfare state payments, and cushy overpaid gov't jobs (hmmmmm, sounds remotely familiar...). They can shock the oil price down for a while to try to assert their power, but they risk massive unrest and even revolution if they keep the oil price down too low for too long.

Also, my understanding of the current price collapse is that the KSA tried to talk Putin into playing the game and cutting production again to boost oil prices. Putin said no dice. Putin was pissed that we (our domestic oil companies) were getting too good of a deal at Russia's expense. Putin decided to ramp up production. KSA followed suit after Putin told them to shove it. Hence, the events of these last several days in the oil market are probably more Russia's fault than the KSA's.

 

That would be good, or at least reduce our support of them.

 

I personally think the US government should buy up this extra production for our strategic oil reserves. Eventually the oil will run out for everyone but us.

 

The amount of ignorance and falsehood packed into such a small phrase is breathtaking. I would like to propose a toast to our Sooner friend for his formidable ignorance.

 

Since when are lower oil prices a bad thing for the US overall? It lowers the cost of just about everything. It's not like the Saudis haven't tried this before. This kind of back and forth has been going on for a long, long time. We will be alright. The market is way overreacting to this IMO.

 

Austin Bill
That seems like a good idea. I wonder what the downside is?

 

It’s practically full right now at 635 million barrels. US strategic capacity is 725 million barrels.

Oil is going to be around long after we stop using it for energy.

 

This would be the current equivalent of how Southwest Airlines used to play the options market to keep their costs (and thus, fares) so much cheaper than the legacies. Except instead of options, it would be actual capacity...

Stock up while you can get the resources cheap and hang on for the rainy day...

 

Isn't there an oil futures market that does what you are saying mb227?

I would be surprised if there weren't entities in the world buying up oil now who will wait to sell when the price goes up again.

Price changes are an opportunity for profit.

 

Absolutely there is...but, bird in hand (oil in storage tanks) beats having to hope the other party actually delivers on the contract

 

You can always buy future contracts.

 

What's false?

A. We know that MBS ordered the murder of Jamal Kashoggi.
B. We know that he and Jared are WhatsApp buds. In fact, I imagine that he's sent Jared a link that hacked his phone just like they did with Jeff Bezos.
C. The Administration ignored congressional sanctions on the Saudis.
D. Trump and Pompeo have done nothing but effort to relegitamize MBS.

PS: You really have a stiffy for me. Ease up big shooter.

 

This actually sounds quite a bit like the reasons Japanese military leaders gave to claim that they were justified in attacking the United States in what, to them, was actually a defensive war that we started with our economic aggression.

 

First, keep me out of your weird Okie backwoods sexual fantasies. Don't be surprised if you get called out for your bullshite.
Second, define rendition and then apply it to the situation at hand.
Third, prove we knew this was going down and we Consented to it. You know, show the evidence. Maybe something a little more than a strange reference to WhatsApp.
Last, explain our cover-up in light of the U.S. investigation into the murder and the conclusions of that investigation.

You could say that no one is shedding a tear over the murder of a lying journalist advocating for the murderous Muslim Brotherhood, and that we support the reformer leading the Saudis, but that is a far cry from being an accomplice in murdering the turd.

 

Austin Bill
Did you call POTUS. or maybe he reads HF
He just announced we will be buying as much oil as we can to put into storage

 

The relatively cheap gas is getting to Europe. This is less than $5 per gallon for regular unleaded, and Esso is one of the pricier gas stations. Sounds like a lot, but remember that about 55 percent of that is fuel taxes and environmental ********. It's very cheap for here. Russia, Norway, and the UK are feeling the pain.

 

That's smart. I've had a few of my red state facebook friends post some fairy tale about how Trump "tricked them" or some **** and bought cheap oil. A. Good move. B. It doesn't make much difference if it doesn't impact the price per barrel of oil.

This is an act of war.

 

Are you above the arctic circle because I see no leaves on your trees? LOL. It will 91 F here on Tuesday.

 

Keep in mind Things that we're about as far north as Vancouver. Things are starting to bloom some. This is a bush in our front yard. However, a cold front blew in last night. It was about 60 yesterday. It's about 38 now and expected to be between 28 (lows) and 40 (highs) next week.

 

Trump did send his SoS over to talk to the Saudis, I think it was last week

Perhaps we should respond to OPEC by forming a Food Export version of OPEC, with Brazil and Canada? Together, we lead in many categories of world agricultural commodity exporting -- beef, chicken, turkey, seafood, corn, coffee, oats, tomatoes, soybean, spices, soybeans, wheat, rice, grains, milk, sugarcane.

 

What? No rutabaga?

 

Of all the ongoing bailouts, the upcoming catastrophe in the shale play would dwarf anything we've seen. What are Trump's options?

1. Pressure on Saudi Arabia including military threats. If necessary, the CIA would claim they stopped a Saudi planned terror attack and use it as a pretext to target Saudi oil facilities.

2. A deal with Putin. Russia agrees to curtail production in exchange for the US ending sanctions on countries supporting the gas pipeline from Russia. I doubt this alone would suffice. The Saudi production would still have to be cut to do any good.

3. Trump does nothing, triggering a chain of defaults across the oil business. Hundreds of billions in defaulted loans, massive unemployment in the oil space, loss of tax revenue (especially in Texas) would follow.

 

The Saudis love lamb too, but we would have to bring in the Kiwis to our cabal to control that market too
Is it worth it?
I dunno

 

He only has three crazy options? Imagine his disappointment.

 

And how can deal with Putin not be #1?
This is an outrage

 

Cartels isn't the way to go. Let the market function. Worse things happen, unintentionally, when you monkey around with it.

 

Texas WILL feel these low oil prices UNTIL it hits $55/Bbl! The oil price DEVISTATES Texas. Upstream, Midstream, Downstream O&G is first hit. But since these industries are 40% + of the states economy Food, Hospitality, Entertainment, Transportation, Real Estate are ALL impacted! This State will not recover until Oil does and we do need to make some dramatic decisions to correct this at the Executive level once the Pandemic settles down. Texas will not be the same without Oil. Probably upwards of 2.5 or 3 Million Oil workers could end up unemployed over the next 2 months. Forbes has articles about this.

 

And how do you see this playing out? Maybe the Federal Reserve will just print another $500 billion and make everything hunky dory? What a great, fair, transparent free market we have here.