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oil prices surges 10% after OPEC agrees output cut
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Except that cheap oil is hurting the oil industry AND hurting renewable energy. Consumers don't invest in clean energy when gas costs $2, they buy SUVs and crank up the heater because they can afford it now. People invest in clean energy when oil and gas are more expensive, they buy efficient cars and electric and hybrid cars instead of gas guzzlers and are more likely to not crank up the heater. Not to mention if your job or local economy are dependent on oil and gas than cheap oil is bad for everyone, especially the middle class and the poor.
Alternative energy progress develops faster when oil prices are high, and hopefully you understand that gasoline is just one of many products you depend on from the petrochemical industry including medicine, clothes, plastics and food.
Yes, but if it gets much more expensive than it just means all those federal lands that Trump wants to open up will be devestated, and we can expect loads more fracking. Depressed prices actually help in that they keep a lot of oil in the ground.
I don't think you can definitively say that. This cut in production that caused the price spike was decided by OPEC after the US presidential election. You can't rule out the result having some bearing on the ultimate decision here, especially w.r.t Trump's campaign rhetoric about a US energy bonanza.
This probably has more to due with KSA figuring the Trump administration will be reinstituting sanctions on Iran. They can stop the bloodletting, because they think the US will do it for them.
Oversupply was mainly to starve off Iranian oil, as Iran is KSAs regional nemesis. That it hurt shale and sands production in the west was just a nice secondary effect to their main objective.
Everyone else was along for the ride, good or bad
Principate
Saint Titanfall
You do realise they're cutting production not increasing it right?
Night Angel
Member
As an unemployed oil man, thank God.
Because they haven't been following the industry and want to pin everything on their new favorite boogey man.
Night Angel
Member
Edit, dp. Sorry!
1st Course
Member
Right now OPEC is very dependent on China as US oil imports are lowest in decades.
But China economy is slowing...
But China economy is slowing...
I live in the Middle East and it is a good thing . Also better for the environment
So much ignorance on display in this thread. All the people yelled about Trump or Republicans clearly have no idea what they are talking about. I guess this is a preview of how every piece of news will be reacted to on here for the next four years.
I especially especially despise these two comments below.
I know oil and fossil fuels are a boogieman for people, but this comment is just uncalled for. I happen to live in a city hurting because of oil prices being so low, and it's not those evil executives you hate that are struggling. It's thousands of regular Americans, both blue and white collar workers, that have been thru hell in the last two years. But hey, you hate the oil industry so it's ok in this case to insult an entire industry of Americans you clearly know nothing about.
I guess this is the gotcha response these days? The people I know affected by the oil industry are people of all races, genders and backgrounds, so please, stop it with baseless accusations like this.
I especially especially despise these two comments below.
I know oil and fossil fuels are a boogieman for people, but this comment is just uncalled for. I happen to live in a city hurting because of oil prices being so low, and it's not those evil executives you hate that are struggling. It's thousands of regular Americans, both blue and white collar workers, that have been thru hell in the last two years. But hey, you hate the oil industry so it's ok in this case to insult an entire industry of Americans you clearly know nothing about.
I guess this is the gotcha response these days? The people I know affected by the oil industry are people of all races, genders and backgrounds, so please, stop it with baseless accusations like this.
Large chunk of my country's budget is funded by oil revenue, and our currency is worth jack squat now partly because of it. Unhappiness with economy and budget cutbacks diverted by leaders into increased racism against minorities like us. Saw the nepotism/cronyism rife in the companies circling its center of gravity. I think I have a decent idea what being tied to oil is about.
I am indeed way overpaid
LegendofJoe
Member
I feel for folks that are/were employed by the oil industry, but lower demand is here to stay. It will probably rebound here and there, but I strongly feel that the overall trend line will continue to point down. Especially when self-driving cars hit the mass market and more families are able to get by with a single vehicle.
Yes, that can be offset by reducing supply, but that also means that the industry can profitably support fewer people. So unless your position is protected it would be smart if you guys started to look to other fields of work for the long-term.
Yes, that can be offset by reducing supply, but that also means that the industry can profitably support fewer people. So unless your position is protected it would be smart if you guys started to look to other fields of work for the long-term.
Ether_Snake
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Trump won't prevent Iran from selling oil, the deal was done to prevent SA from fucking with the prices. I doubt Trump would scrap that.
This + it was a dumb losing bet on opec's part from the beginning. Did they really expect that hedging their entire economies on scaring the incredibly diverse us economy into towing their line? Anyone with a brain cell could see that opec was playing a losing game, with sa's economy looking on the brink of total devastation within 5 years or so if they kept it up.
Meanwhile in the US, Oklahoma cut its education spending.
Subpar Scrub
Banned
Assuming they're white is pretty fucked bruh. Surprised comments like this are allowed so frequently.
Croatoan
They/Them A-10 Warthog
Or like me who has had his hours cut in half and salary cut 65% because OPEC needed to put American Companies out of business. I can barely pay bills and if my wife didn't have a job we wouldn't be able to pay rent. Racist as hell comment too.
Fuck your cheap gas. Needs to be $4 a gallon at minimum in Texas (more in other states) to limit emissions and help the industry recover before its final death.
Tal Shiar Agent
Banned
I'm so glad that you are so well off that high gas prices don't hurt you.
Croatoan
They/Them A-10 Warthog
I am so glad you have a job that hasn't decimated your family because of low oil prices. Talk about privileged.....
TheLostBigBoss
Banned
It's a little bit of a catch 22.
Expensive oil means that public opinion will shift and be like 'omg I can't be paying all this money, we need to invest in alternatives!", all while oil producers are thanking god that they can drill and actually make money now.
On the flip side, cheaper oil means that people will obviously use that opportunity to fill their tanks and stuff, but it also means that it's not profitable to invest in expanded drilling.
Doesn't really matter, cheap oil didn't hurt solar/wind, but honestly at this point there is so much oil out there to grab, I wouldn't be shocked if someone picks up the slack and re-depresses the oil market.
Expensive oil means that public opinion will shift and be like 'omg I can't be paying all this money, we need to invest in alternatives!", all while oil producers are thanking god that they can drill and actually make money now.
On the flip side, cheaper oil means that people will obviously use that opportunity to fill their tanks and stuff, but it also means that it's not profitable to invest in expanded drilling.
Doesn't really matter, cheap oil didn't hurt solar/wind, but honestly at this point there is so much oil out there to grab, I wouldn't be shocked if someone picks up the slack and re-depresses the oil market.
PHOENIXZERO
Member
Not really related to this but yeah, I should've filled up Sunday night, gas went up 30 cents Monday morning.
Tal Shiar Agent
Banned
If you are a young person and went into the petrochemical industry you screwed yourself. If you are an older person you should have read the tea leaves that the industry has a limited shelf life.
Lower prices means less production in the West which means less direct physical destruction of the environment. The day that our national parks, national monuments, state parks, state monuments, and other nature preserves are raped by the petrochemical industry is the day that we deserve all the shit that climate change is going to throw at us.
Low prices don't affect the cost to power ratio of solar and wind. Solar will continue to get more efficient and cheaper regardless of the price of oil.
Croatoan
They/Them A-10 Warthog
Dangerously close to victim blaming there bud. BTW, higher prices means less people drive, lower prices means more people drive. You have that completely backwards. Higher prices are better for the environment....
I love it when clueless people who are not in the oil industry preach to me about oil like they actually know what they are talking about. But given your upside down American flag I shouldn't be surprised.
Thelonelykoopa
Member
Most likely good for oil based members of the global south but sucks as a college student communting 60miles a day.
The overall oil average since it's been a thing has been around $50-60, which is where it has been sitting or sitting close for half of the year before this announcement. The only reason we got crazy in the 100s was due to the war in the Middle East those years back. The companies expecting that 100 surge again aren't ever going to get it (unless we start another war). At least things now have looked steady over the past few months, which is why the drill count has finally begin to go up.
Tal Shiar Agent
Banned
The only victim here is the environment.
Yes, people drive more when prices are lower. But more fossil fuels are extracted when prices are higher. The petrochemical industry has been constantly lobbying to get access to protected land to explore for oil and extract what's there. Higher prices means that they'll have more money to lobby with and oil extracted will be more profitable. Solar (and other renewables) and electric cars are going to phase out fossil fuels either way. It might take longer with lower gas prices but it will happen, and I think that the direct physical destruction of the environment by fossil fuel extraction is more permanently destructive than a slower reduction of fossil fuel burning.
And don't pull that bullshit. Its a logical fallacy that one must be directly involved with something to understand it.
That's pretty fucked up.
Edit: to your last paragraph, its clear you don't know what your talking about. It's well documented that investment in clean energy goes down when oil is cheap.
No it doesn't. It is an oil cartel artificially decreasing supply so that they can raise prices to make more profit at the cost of the average consumer. When oil prices rise, it affects everything from consumer spending, airline travel. The amount of oil/gas we use will not decrease, we'll just end up paying more for it.
But there is so much oil available, that this won't last. OPEC and particularly Saudi Arabia increased or maintained their production so they didn't lose market share to the US or Canada or Russia. The US and Canada need high oil barrel values to make investment and production viable. What will happen here is that oil will rise, Canada and the US and Norway will increase their production to try and get more marketshare away from Saudi Arabia. It is why Iran did not agree to cut their production because finally free of sanctions they have a chance to get some badly needed income.
You cannot expect oil/gas costs to stay high. They went low because we have more countries than ever extracting and producing oil and gas. Canadian pipelines will soon start tarsands oil shipments to China and India. There is too much oil than is needed in the first place and we are on the cusp of electric vehicles. But to say it needs to be more expensive just because some sheiks or oil executives want to line their pockets with more billions, I don't know.
Tal Shiar Agent
Banned
That is a myth.
http://fortune.com/2016/01/13/oil-prices-solar-tech/
http://bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels
Edit: You can't trust what anyone in the petrochemical industry says about the matter because they stand to make even more bank when prices are high, so perpetuating the idea that high prices help green energy can only stand to benefit the petrochemical industry.
And then diversify the economy.
These people are way overpaid especially the ones on the top.
As screwed up as the whole situation and system is, it is overall better for oil to be higher priced in order for some nation's economies to thrive and to incentivize renewable energies.
It sucks, but if oil continues being super cheap there won't be much demand for electric vehicles, and since it seems like cost is the only thing that can push people in that direction that's the way it has to go.
Right now it's a lose-lose situation, which is why we need to get off oil asap.
It sucks, but if oil continues being super cheap there won't be much demand for electric vehicles, and since it seems like cost is the only thing that can push people in that direction that's the way it has to go.
Right now it's a lose-lose situation, which is why we need to get off oil asap.
Not here. Low oil prices means everything is down. Hotel, retail, manufacturing, service, transportation. Everything.
Tal Shiar Agent
Banned
Where is "here"?
Alberta.
Tal Shiar Agent
Banned
And it really fucking sucks that your local economy isn't diversified enough to absorb the hit. Look at coal country in the US, places that refused to diversified fell into localized depressions and stimulated mass exodus to richer regions. We as a species and we as the stewards of some of the most oil rich and ecologically diverse regions on Earth need to stop extracting fossil fuels. Both for the world to combat climate change, but also for our local environments. It's going to be hard, no way around that, but it needs to be done. The petrochemical industry needs to suffer and die. As I've linked, low oil prices are not having a depressing effect on renewable investment, so prices should stay low to encourage lower output and lower profits for oil companies until it's not profitable at all to extract fossil fuels any longer.
Great post. I have some familiarity with the O&G world and prices this low have really been a bad thing across the board in general. Now, I'm crazy left-wing, like I actually think that Bernie is too far right. The crash in oil prices absolutely slammed Northern Colorado's infrastructure spending. It was moving in the right direction for several years and now lots of stuff is on hold as a result. I'm also seeing massive family decimation up here in the schools as desperate poor people who did have jobs are turning to meth and/or walking away from their families in a fit of massive depression.
That being said, we don't want oil prices to return to $100/bbl levels. There needs to be more a golden mean (probably around $70) that serves everyone.
I'm 40% underpaid atm to keep my job. We have rolling furlows as well. The people you are speaking of (engineers for example) are paid more because the responsibility is huge.
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