ISF Logo   IS Forum
Forum Index Register Members List Events Mark Forums Read Help

Go Back   International Skeptics Forum » General Topics » USA Politics
 


Welcome to the International Skeptics Forum, where we discuss skepticism, critical thinking, the paranormal and science in a friendly but lively way. You are currently viewing the forum as a guest, which means you are missing out on discussing matters that are of interest to you. Please consider registering so you can gain full use of the forum features and interact with other Members. Registration is simple, fast and free! Click here to register today.
Reply
Old 14th April 2020, 10:34 AM   #1
lomiller
Penultimate Amazing
 
lomiller's Avatar
 
Join Date: Jul 2007
Posts: 10,625
Trumps deal with Russia and Saudi Arabia to drive up oil prices

This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.
__________________
"Anything's possible, but only a few things actually happen"
lomiller is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 10:40 AM   #2
plague311
Great minds think...
 
plague311's Avatar
 
Join Date: Dec 2011
Location: North Dakota
Posts: 8,294
Originally Posted by lomiller View Post
This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.
From what I've understood about it, Trump realized that we need the oil\gas industry to be successful in order to keep the economy going. By helping them, he's helping us.

I'll try to find the article I read that in.
__________________
"Circumcision and death threats go together like milk and cookies." - William Parcher

ďThere are times when the mind is dealt such a blow it hides itself in insanity. While this may not seem beneficial, it is. There are times when reality is nothing but pain, and to escape that pain the mind must leave reality behind.Ē - Patrick Rothfuss
plague311 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:03 AM   #3
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by plague311 View Post
From what I've understood about it, Trump realized that we need the oil\gas industry to be successful in order to keep the economy going. By helping them, he's helping us.

I'll try to find the article I read that in.
Oil prices definitely help a sector in the US economy, but my observation over the years is that low prices are better for the overall economy.

Or to put this another way: why would anybody seriously think repeating the 1970s OPEC oil embargo will boost the US economy?

Increasing oil prices helps the oilpatch visibly while spreading the cost increase to consumers less visibly.

Tariffs work similarly. They protect a specific sector by increasing their prices, and this cost increase is borne broadly onto the consumers who buy their products.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:04 AM   #4
plague311
Great minds think...
 
plague311's Avatar
 
Join Date: Dec 2011
Location: North Dakota
Posts: 8,294
Originally Posted by blutoski View Post
Oil prices definitely help a sector in the US economy, but my observation over the years is that low prices are better for the overall economy.

Or to put this another way: why would anybody seriously think repeating the 1970s OPEC oil embargo will boost the US economy?

Increasing oil prices helps the oilpatch visibly while spreading the cost increase to consumers less visibly.

Tariffs work similarly. They protect a specific sector by increasing their prices, and this cost increase is borne broadly onto the consumers who buy their products.
Yeah, I don't know how much I buy into it. I just saw that as a possible solution. With Trump it's kind of hard to tell what he's thinking.
__________________
"Circumcision and death threats go together like milk and cookies." - William Parcher

ďThere are times when the mind is dealt such a blow it hides itself in insanity. While this may not seem beneficial, it is. There are times when reality is nothing but pain, and to escape that pain the mind must leave reality behind.Ē - Patrick Rothfuss
plague311 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:07 AM   #5
lomiller
Penultimate Amazing
 
lomiller's Avatar
 
Join Date: Jul 2007
Posts: 10,625
Originally Posted by plague311 View Post
From what I've understood about it, Trump realized that we need the oil\gas industry to be successful in order to keep the economy going. By helping them, he's helping us.

I'll try to find the article I read that in.
Any benefit to the oil industry is balanced by the economic penalty of higher oil prices. Overall it redistributes wealth from consumers to oil producers. Some US producers would be on the receiving end of that wealth transfer, but the primarily beneficiaries are the Saudi Royal family and Russian Oligarchs, but other State controlled oil companies benefit as well.

Again, contrasting this with a carbon tax, a tax would be neutral wrt aggregate demand because the money still gets spent in-country, just on different things. This is not neutral because the wealth is transferred out-of-country primarily to Russia/Saudi Arabia.
__________________
"Anything's possible, but only a few things actually happen"
lomiller is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:08 AM   #6
Crossbow
Seeking Honesty and Sanity
 
Crossbow's Avatar
 
Join Date: Oct 2001
Location: Charleston, WV
Posts: 13,015
Originally Posted by lomiller View Post
This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.
Considering that the USA is now the biggest producer of oil in the world, then getting OPEC oil prices up serves to drive up USA oil prices.

Therefore, the rich people that Trump loves so much will be able to get even richer, which may enable them to support Trump even more during the upcoming election.
__________________
On 22 JUL 2016, Candidate Donald Trump in his acceptance speech: "There can be no prosperity without law and order."
On 05 FEB 2019, President Donald Trump said in his Sate of the Union Address: "If there is going to be peace and legislation, there cannot be war and investigation."
On 15 FEB 2019 'BobTheCoward' said: "I constantly assert I am a fool."
A man's best friend is his dogma.
Crossbow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:22 AM   #7
Darat
Lackey
Administrator
 
Darat's Avatar
 
Join Date: Aug 2001
Location: South East, UK
Posts: 91,501
How can Trump reduce USA oil output?
__________________
I wish I knew how to quit you
Darat is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:39 AM   #8
shuttlt
Philosopher
 
Join Date: Aug 2008
Posts: 6,193
Originally Posted by lomiller View Post
This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.
There were a number of articles a week or two ago talking about Saudi wanting to reduce production to keep the oil price stable given reduced demand from Corona virus, but Russia didn't want to play ball. Supposedly they wanted the price to drop to attack the US shale industry which has a higher production cost.

Below is one such article:

https://www.ft.com/content/59dcba56-...3-fe4680ea68b5
shuttlt is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:46 AM   #9
shemp
a flimsy character...perfidious and despised
 
shemp's Avatar
 
Join Date: Nov 2002
Location: People's Democratic Republic of Planet X
Posts: 34,951
Originally Posted by lomiller View Post
This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.
Because he's a complete dickhead who's probably personally profiting from the deal.
__________________
"Shemp, you are the one fixed point in an ever-changing universe." - Beady
"I don't want to live in a world without shemp." - Quarky
"...just as a magnet attracts iron filings, Trump shemp attracts, and is attracted to, louts." - George Will
"[shemp is] a most notable coward, an infinite and endless liar, an hourly promise breaker, the owner of no one good quality." - Shakespeare
shemp is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:46 AM   #10
Crossbow
Seeking Honesty and Sanity
 
Crossbow's Avatar
 
Join Date: Oct 2001
Location: Charleston, WV
Posts: 13,015
Originally Posted by Darat View Post
How can Trump reduce USA oil output?
I would suggest bribery.
__________________
On 22 JUL 2016, Candidate Donald Trump in his acceptance speech: "There can be no prosperity without law and order."
On 05 FEB 2019, President Donald Trump said in his Sate of the Union Address: "If there is going to be peace and legislation, there cannot be war and investigation."
On 15 FEB 2019 'BobTheCoward' said: "I constantly assert I am a fool."
A man's best friend is his dogma.
Crossbow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 11:51 AM   #11
Babbylonian
Penultimate Amazing
 
Babbylonian's Avatar
 
Join Date: Feb 2007
Posts: 12,612
Originally Posted by shemp View Post
Because he's a complete dickhead who's probably personally profiting from the deal.
*Ding!
Babbylonian is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:01 PM   #12
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by Crossbow View Post
Considering that the USA is now the biggest producer of oil in the world, then getting OPEC oil prices up serves to drive up USA oil prices.

Therefore, the rich people that Trump loves so much will be able to get even richer, which may enable them to support Trump even more during the upcoming election.
What's not clear to me from the announcements is whether this impacts US production outside of the pricing relief.

Specifically, if the agreement is for OPEC + USA to reduce production, then how does ratcheting down US oilpatch activity even further help them?

My guess is that somehow the agreement is different: the USA is going to just respond market-wise, probably increase production domestically given higher prices. What's the USA offering then? My concern is that it's just more direct gifts for the Saudis and Putin, to be paid for by the American taxpayer.

This is ignoring the higher price at the pumps, which translates into higher consumer prices on anything transported or manufactured from petroleum raw materials, most of the additional dollar value of which will be transferred offshore anyway, part of BAU for oil purchased by Americans.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:04 PM   #13
Winterfrost
Thinker
 
Join Date: Dec 2004
Posts: 127
Shale oil production accounts for about 60% of US domestic production. The cost to produce shale oil averages somewhere between $40 and $90 per barrel. Part of the Russian strategy was to drive down prices to put those US producers out of business. A few years ago the US was strongly pushing a strategy of “energy independence.” That can’t happen with oil prices where they are.

Leave prices where they are, and the net result will be a loss of jobs in the oil US oil industry (about 10 million total jobs are petroleum related), and more reliance on Russia and OPEC for cheaper oil.

I’m no economist, so I can’t say what is better for the US consumer, but overall letting the domestic industry wither certainly doesn’t fit with Trump’s isolationist vision.
Winterfrost is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:09 PM   #14
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by shuttlt View Post
There were a number of articles a week or two ago talking about Saudi wanting to reduce production to keep the oil price stable given reduced demand from Corona virus, but Russia didn't want to play ball. Supposedly they wanted the price to drop to attack the US shale industry which has a higher production cost.

Below is one such article:

https://www.ft.com/content/59dcba56-...3-fe4680ea68b5
I've read a few dozen articles over the last year that paint a different long term picture.

Saudi Arabia has spent the last decade investing in infrastructure, and the analysts suspect the long term intention is to have the capacity to simply walk away from OPEC. Russia's infrastructure is crumbling, and the US is using expensive extraction because the low hanging fruit has all been pumped there. The rest of OPEC are pretty much economic basket cases with relatively insignificant production volumes.

Shale is not the only target, is what I'm suggesting.

The COVID19 situation is not incorporated into the Saudi long term plan, so I think they're making minor adaptations to the recent demand collapse, rather than changing their overall strategy. Trump is taking credit for something that doesn't really involve him, I think.

And I believe he's disproportionately attentive to it probably because a) the Koch family are influential and highly dependent on energy *production* (not prices) so anything that will boost production wins their approval, and b) for some reason he's obsessed with Putin and the Sauds, and loves an excuse to be on conference calls with them all day.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:10 PM   #15
BobTheCoward
Penultimate Amazing
 
Join Date: Nov 2010
Posts: 18,934
Originally Posted by blutoski View Post
What's not clear to me from the announcements is whether this impacts US production outside of the pricing relief.

Specifically, if the agreement is for OPEC + USA to reduce production, then how does ratcheting down US oilpatch activity even further help them?

My guess is that somehow the agreement is different: the USA is going to just respond market-wise, probably increase production domestically given higher prices. What's the USA offering then? My concern is that it's just more direct gifts for the Saudis and Putin, to be paid for by the American taxpayer.

This is ignoring the higher price at the pumps, which translates into higher consumer prices on anything transported or manufactured from petroleum raw materials, most of the additional dollar value of which will be transferred offshore anyway, part of BAU for oil purchased by Americans.
The issue is the US has a higher production cost and the price of oil can be below cost for the US producers but above it for countries like Russia.

https://en.m.wikipedia.org/wiki/Pric..._of_production

US non shale is $5.15 a barrel. Saudi Arabia is $3 a barrel. Plus other costs are a factor.

The US is the largest oil producer when prices are above the threshold such that US oil producers can make a profit extracting moderately costly oil. But there is a point where it is profitable for Saudi Arabia to extract a lot of oil but not the US.
BobTheCoward is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:12 PM   #16
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by Winterfrost View Post
Shale oil production accounts for about 60% of US domestic production. The cost to produce shale oil averages somewhere between $40 and $90 per barrel. Part of the Russian strategy was to drive down prices to put those US producers out of business. A few years ago the US was strongly pushing a strategy of ďenergy independence.Ē That canít happen with oil prices where they are.
It can, using renewables.


Originally Posted by Winterfrost View Post
Leave prices where they are, and the net result will be a loss of jobs in the oil US oil industry (about 10 million total jobs are petroleum related), and more reliance on Russia and OPEC for cheaper oil.

Iím no economist, so I canít say what is better for the US consumer, but overall letting the domestic industry wither certainly doesnít fit with Trumpís isolationist vision.
This is a good point, and why I mentioned tariffs in a previous post. The idea seems to be to protect a few people in specific high profile industries, and pass the cost onto the consumer, even though it hurts thousands of other lower profile businesses, and consumers, in proportion.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:14 PM   #17
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by BobTheCoward View Post
The issue is the US has a higher production cost and the price of oil can be below cost for the US producers but above it for countries like Russia.

https://en.m.wikipedia.org/wiki/Pric..._of_production

US non shale is $5.15 a barrel. Saudi Arabia is $3 a barrel. Plus other costs are a factor.

The US is the largest oil producer when prices are above the threshold such that US oil producers can make a profit extracting moderately costly oil. But there is a point where it is profitable for Saudi Arabia to extract a lot of oil but not the US.
Yes, I get that, but what I meant is the Saudis have been expanding capacity for a decade, and are currently producing at something like 60%.

I don't think the US is the only target, I think the long term play is to just walk away from all this international quota setting and set pricing independently.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:34 PM   #18
Horatius
NWO Kitty Wrangler
 
Horatius's Avatar
 
Join Date: May 2006
Posts: 27,949
Originally Posted by Winterfrost View Post
Leave prices where they are, and the net result will be a loss of jobs in the oil US oil industry (about 10 million total jobs are petroleum related), and more reliance on Russia and OPEC for cheaper oil.

Iím no economist, so I canít say what is better for the US consumer, but overall letting the domestic industry wither certainly doesnít fit with Trumpís isolationist vision.


Trump is essentially begging the Russians and Saudis to not completely trash the US oil industry. He's trying to spin it to make it look like he's saving it, but with his actions, he's tacitly admitting that the survival of the industry ultimately rests on the good will of foreign powers.

What the US needs to do (as does Canada, btw, we're even worse off with our oil industry), is use this reprieve to temporarily shore up the industry, while doing what we can to diversify the economies of those areas that currently depend on oil revenue.

This will, of course, be vehemently opposed by almost everyone who is currently living off the oil industry. In Canada, we've been trying to get Alberta to wean itself off the oil tit for most of my life, and they're still clinging to it like a drunken baby.
__________________
Obviously, that means cats are indeed evil and that ownership or display of a feline is an overt declaration of one's affiliation with dark forces. - Cl1mh4224rd
Horatius is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:49 PM   #19
pgwenthold
Penultimate Amazing
 
Join Date: Sep 2001
Posts: 18,946
Missing in this thread is a comment about how the deal involves the US paying Mexico to offset it's lower production.

IOW, instead of Mexico paying for the wall, the US is paying Mexico to keep gas prices higher.
__________________
"As your friend, I have to be honest with you: I don't care about you or your problems" - Chloe, Secret Life of Pets
pgwenthold is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:50 PM   #20
Crossbow
Seeking Honesty and Sanity
 
Crossbow's Avatar
 
Join Date: Oct 2001
Location: Charleston, WV
Posts: 13,015
Originally Posted by pgwenthold View Post
Missing in this thread is a comment about how the deal involves the US paying Mexico to offset it's lower production.

IOW, instead of Mexico paying for the wall, the US is paying Mexico to keep gas prices higher.
Thanks much.

I noticed that fact as well.
__________________
On 22 JUL 2016, Candidate Donald Trump in his acceptance speech: "There can be no prosperity without law and order."
On 05 FEB 2019, President Donald Trump said in his Sate of the Union Address: "If there is going to be peace and legislation, there cannot be war and investigation."
On 15 FEB 2019 'BobTheCoward' said: "I constantly assert I am a fool."
A man's best friend is his dogma.
Crossbow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:51 PM   #21
lomiller
Penultimate Amazing
 
lomiller's Avatar
 
Join Date: Jul 2007
Posts: 10,625
Originally Posted by Winterfrost View Post
Part of the Russian strategy was to drive down prices to put those US producers out of business.
Shutting down US production that way is a fools errand. Russia would need to keep oil prices low indefinitely to keep this from happening. If kept, this deal means they donít need to Trump is going to supress US production while Russia rakes in the profits from higher prices.
__________________
"Anything's possible, but only a few things actually happen"
lomiller is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:54 PM   #22
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by Crossbow View Post
Thanks much.

I noticed that fact as well.
I'm still trying to locate specifics; It's not clear to me *what* the US is offering Saudi Arabia and Russia for example, or even if the Mexican 'offer' is being actioned, and what the dollar value will look like if it is.

My theory at the moment is that this literally has nothing to do with Trump other than he sat on hours of conference calls talking, while the Saudis and OPEC made some sort of deal that doesn't involve him other than Americans are impacted.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:56 PM   #23
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by lomiller View Post
Shutting down US production that way is a fools errand. Russia would need to keep oil prices low indefinitely to keep this from happening. If kept, this deal means they donít need to Trump is going to supress US production while Russia rakes in the profits from higher prices.
This is why the Saudis are in a different place. Lowering price isn't a huge problem if you have the capacity to increase volume to compensate. Russia doesn't. Lower prices means less money. I don't think they've ever been piloting this ship.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 12:57 PM   #24
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by Horatius View Post
Trump is essentially begging the Russians and Saudis to not completely trash the US oil industry. He's trying to spin it to make it look like he's saving it, but with his actions, he's tacitly admitting that the survival of the industry ultimately rests on the good will of foreign powers.

What the US needs to do (as does Canada, btw, we're even worse off with our oil industry), is use this reprieve to temporarily shore up the industry, while doing what we can to diversify the economies of those areas that currently depend on oil revenue.

This will, of course, be vehemently opposed by almost everyone who is currently living off the oil industry. In Canada, we've been trying to get Alberta to wean itself off the oil tit for most of my life, and they're still clinging to it like a drunken baby.
I'm going to add Newfoundland to that list. They've gradually transitioned from a one-industry fishing province to a one-industry oil province over the last 30 years, and no lessons have been learned by the looks of it.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 01:10 PM   #25
shuttlt
Philosopher
 
Join Date: Aug 2008
Posts: 6,193
Originally Posted by blutoski View Post
This is why the Saudis are in a different place. Lowering price isn't a huge problem if you have the capacity to increase volume to compensate. Russia doesn't. Lower prices means less money. I don't think they've ever been piloting this ship.
I thought the demand was reducing due to Coronavirus? The question was whether the Russians would agree to reduce supply, not whether they would be able to increase production to compensate for a reduced price.
shuttlt is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 01:17 PM   #26
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by shuttlt View Post
I thought the demand was reducing due to Coronavirus? The question was whether the Russians would agree to reduce supply, not whether they would be able to increase production to compensate for a reduced price.
My comment about Russia was responding to an earlier post, that suggested Russia had a plan to crater US shale oil production by flooding the marketplace. My thinking is that this doesn't make sense, because it's unsustainable, and it depends on Saudi cooperation.

In contrast, the Saudis seem to have a credible long term (I estimate generational) plan leveraging their observed investment in capacity since the 2008 financial crisis.

And yes, I think the *recent* reduction in output is a temporary diversion from this long term strategy in response to reduced demand.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 02:46 PM   #27
Horatius
NWO Kitty Wrangler
 
Horatius's Avatar
 
Join Date: May 2006
Posts: 27,949
Originally Posted by pgwenthold View Post
Missing in this thread is a comment about how the deal involves the US paying Mexico to offset it's lower production.

IOW, instead of Mexico paying for the wall, the US is paying Mexico to keep gas prices higher.
Originally Posted by Crossbow View Post
Thanks much.

I noticed that fact as well.

Well, what could we say about it? It's just such a quintessentially Trumpian business deal. "Look, I tell you what: I'll pay you to make me, and everyone else, pay even more. Deal?"

I mean, what's the point of even discussing it? Anyone who'd make a deal like that in the first place won't listen to any discussion about it after the fact.
__________________
Obviously, that means cats are indeed evil and that ownership or display of a feline is an overt declaration of one's affiliation with dark forces. - Cl1mh4224rd
Horatius is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 03:15 PM   #28
lomiller
Penultimate Amazing
 
lomiller's Avatar
 
Join Date: Jul 2007
Posts: 10,625
Originally Posted by shuttlt View Post
I thought the demand was reducing due to Coronavirus? The question was whether the Russians would agree to reduce supply, not whether they would be able to increase production to compensate for a reduced price.
Oil was dropping before the pandemic hit due to a spat between Russia and Saudi Arabia over production quotas.
__________________
"Anything's possible, but only a few things actually happen"
lomiller is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 14th April 2020, 03:26 PM   #29
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by Horatius View Post
Well, what could we say about it? It's just such a quintessentially Trumpian business deal. "Look, I tell you what: I'll pay you to make me, and everyone else, pay even more. Deal?"

I mean, what's the point of even discussing it? Anyone who'd make a deal like that in the first place won't listen to any discussion about it after the fact.
Point of order: Trump never says "I'll pay more" - it's never his money at stake.

It's more like, "I'll pay you with other people's money."

And then, "Hey wait, I should be compensated for all that work I did with OPM. I deserve a piece of the action, it's not like it's going to give itself away."
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 05:13 AM   #30
d4m10n
Philosopher
 
d4m10n's Avatar
 
Join Date: Jun 2012
Location: Mounts Farm
Posts: 5,003
Originally Posted by Crossbow View Post
Considering that the USA is now the biggest producer of oil in the world, then getting OPEC oil prices up serves to drive up USA oil prices.
Which in turn keeps ~10 million Americans gainfully employed.

Sent from my SAMSUNG-SM-N920A using Tapatalk
__________________
I'm a happy SINner on the Skeptic Ink Network!
Background Probability: Against Irrationality, Innumeracy, and Ignobility
http://skepticink.com/backgroundprobability/
d4m10n is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 06:48 AM   #31
applecorped
Banned
 
Join Date: Mar 2008
Posts: 20,145
Originally Posted by shemp View Post
Because he's a complete dickhead who's probably personally profiting from the deal.
applecorped is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 07:58 AM   #32
BobTheCoward
Penultimate Amazing
 
Join Date: Nov 2010
Posts: 18,934
Originally Posted by d4m10n View Post
Which in turn keeps ~10 million Americans gainfully employed.

Sent from my SAMSUNG-SM-N920A using Tapatalk
That included natural gas...where the US is the leader, and refining. Refining is opposed to the deal.

But honestly, why should these jobs be protected? Are they different from Bastiat's candlemakers raging against the sun?
BobTheCoward is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 08:41 AM   #33
d4m10n
Philosopher
 
d4m10n's Avatar
 
Join Date: Jun 2012
Location: Mounts Farm
Posts: 5,003
Originally Posted by BobTheCoward View Post
Refining is opposed to the deal.
Are they? Why?

Sent from my SAMSUNG-SM-N920A using Tapatalk
__________________
I'm a happy SINner on the Skeptic Ink Network!
Background Probability: Against Irrationality, Innumeracy, and Ignobility
http://skepticink.com/backgroundprobability/
d4m10n is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 08:51 AM   #34
BobTheCoward
Penultimate Amazing
 
Join Date: Nov 2010
Posts: 18,934
Originally Posted by d4m10n View Post
Are they? Why?

Sent from my SAMSUNG-SM-N920A using Tapatalk
https://finance.yahoo.com/news/coron...142202670.html

Quote:
Oil prices fell below $30 a barrel last week for the first time in four years as tensions between Russia and Saudi Arabia combined with continued panic over the spreading coronavirus sent the commodity crashing. While realizations for gasoline and heating oil have gone down too, the rate of decline has been slower. This is because beaten down prices of refined products leads to higher demand. In other words, refining margins are likely to improve with a dip in prices for its raw material, i.e. crude oil.
BobTheCoward is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 09:02 AM   #35
d4m10n
Philosopher
 
d4m10n's Avatar
 
Join Date: Jun 2012
Location: Mounts Farm
Posts: 5,003
Sure, "beaten down prices of refined products leads to higher demand" in ordinary times, but I don't think we've actually been seeing higher demand for refined products in the age of "shelter at home" and maximal telework.

Sent from my SAMSUNG-SM-N920A using Tapatalk
__________________
I'm a happy SINner on the Skeptic Ink Network!
Background Probability: Against Irrationality, Innumeracy, and Ignobility
http://skepticink.com/backgroundprobability/

Last edited by d4m10n; 15th April 2020 at 09:03 AM.
d4m10n is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 09:42 AM   #36
BobTheCoward
Penultimate Amazing
 
Join Date: Nov 2010
Posts: 18,934
Originally Posted by d4m10n View Post
Sure, "beaten down prices of refined products leads to higher demand" in ordinary times, but I don't think we've actually been seeing higher demand for refined products in the age of "shelter at home" and maximal telework.

Sent from my SAMSUNG-SM-N920A using Tapatalk
I'm going to back off my claim.

They were in opposition when the discussion was around tariffs and quotas on April 2nd. US Extractors didn't mind those. I can't find anything explicitly about OPEC cuts this last week.

https://www.wsj.com/articles/trumps-...it-11585870063
BobTheCoward is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 09:47 AM   #37
rockysmith76
Suspended
 
Join Date: Jul 2019
Posts: 1,270
Originally Posted by lomiller View Post
This is getting swamped by COVID stuff in the general Trump thread. But seriously wtf? Why would an American President want to help Russia and Saudi Arabia raise oil/gas prices?

https://www.nytimes.com/2020/04/12/b...ronavirus.html

Even as someone who wants to see higher oil prices as a means to fighting climate change I find this shocking. Carbon tax systems keep the money inside the country so they are neutral in terms of capital flows and economic impact. This deal is a massive capital flow toward two problematic and hostile nations. It helps Russia, helps Saudi Arabia and hurts just about everyone else including US consumers. Why would any American President do something like this.

it wouldnt, people would just pay more
rockysmith76 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 15th April 2020, 09:58 AM   #38
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 12,101
Originally Posted by rockysmith76 View Post
it wouldnt, people would just pay more
The key concept being elasticity. The market seems to just absorb increases in fuel prices.

It might impact sales of downstream products, though. The goods being transported, or petroleum based products like plastic or fertilizer.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 20th April 2020, 10:32 AM   #39
CORed
Philosopher
 
Join Date: Dec 2008
Location: Central City, Colorado, USA
Posts: 9,378
Originally Posted by Winterfrost View Post
Shale oil production accounts for about 60% of US domestic production. The cost to produce shale oil averages somewhere between $40 and $90 per barrel. Part of the Russian strategy was to drive down prices to put those US producers out of business. A few years ago the US was strongly pushing a strategy of ďenergy independence.Ē That canít happen with oil prices where they are.

Leave prices where they are, and the net result will be a loss of jobs in the oil US oil industry (about 10 million total jobs are petroleum related), and more reliance on Russia and OPEC for cheaper oil.

Iím no economist, so I canít say what is better for the US consumer, but overall letting the domestic industry wither certainly doesnít fit with Trumpís isolationist vision.
You know, that oil isn't going anywhere while we're buying from cheaper foreign sources. Oil and gas are non-renewable resources. It's good to have enough reserves that foreign producers can't hold us hostage, but, if Russia and Saudi Arabia want to deplete their reserves at bargain basement prices, we should be happy to let them do so. When the price goes up again, we can produce domestically again.
CORed is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 20th April 2020, 01:42 PM   #40
Trebuchet
Penultimate Amazing
 
Trebuchet's Avatar
 
Join Date: Nov 2003
Location: Port Townsend, Washington
Posts: 27,019
As noted in other threads, US crude futures for June are at -$40. They'll pay you forty dollars to take it.
__________________
Cum catapultae proscribeantur tum soli proscripti catapultas habeant.
Trebuchet is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Reply

International Skeptics Forum » General Topics » USA Politics

Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -7. The time now is 07:13 PM.
Powered by vBulletin. Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.

This forum began as part of the James Randi Education Foundation (JREF). However, the forum now exists as
an independent entity with no affiliation with or endorsement by the JREF, including the section in reference to "JREF" topics.

Disclaimer: Messages posted in the Forum are solely the opinion of their authors.