One person's thoughts may change the world
Oil pumps. Something that we rarely see unless we are in somewhere in Texas, California, Saudia Arabia, Iraq, Russia, North Dakota, Iran, Iraq, Kuwait, you get the picture. I’m so tired of oil that these things are starting to look like old grazing dinosaurs, put out to pasture, and ready for slaughter to that great energy heaven in the sky.
For a while now, I’ve been taking pictures of what I pay when I go to the gas station. I have not determined if there is any correlation to anything, but perhaps it would do me justice to record the date of when the picture was taken. I usually go to Speedway, and occasionally Costco, but mostly Speedway. But now, gas station is fair game. Gas is below 3 dollars a gallon, and I’m fillin’ up. Strange thing for me. I don’t like spending a lot of money at one time for gas. I usually put in 15 or 20 and keep going, even though it’s the same difference if I just fill up. By purchasing less at a time, I feel less likely to get pissed off as much, but, perhaps it backfires on me, I still get pissed off, I stop at the gas station more often thus, I see the price, and I get pissed off all over again. Now, it’s below 3 dollars and even flirting with 2.75 a gallon as I write this.
And, the question is… why? Why has all of a sudden, the greatest commodity on the planet that’s been causing most of the wars in the latter half of the 20th century and going into the 21st been going down? Before, even a whisper of war in or near the middle east begged the price to jump on oil futures, which immediately was reflected at the pump. War in Lebanon, gas goes up, rhetoric with Iran, gas goes up, Sadam invades Kuwait, gas and interest rates go up, United States invades Kuwait, gas goes up, Chaves says we need to get off the dollar and start trading in other currencies, gas goes up. Chaves dies suddenly of cancer, Kaddafi is overthrown and killed in Libya and guess what? Gas prices go up. I could name other minor instances but it would read the same, gas prices are up. Now, even the virus pandemic Ebola in Africa can’t even get prices to surge. This also coincides with reports that the United States has surpassed Saudi Arabia as the world’s largest oil producer. Wow, is that true? that has not happened since the end of WWII, if it’s true.
Now, suddenly, the price of oil is down. It is said that most of these “oil nations” need a barrel of oil to stay at or above the median price of 85.00 a barrel. That’s high, even for those countries that can pump oil relatively easy out of the ground. Now, Canada, the U.S. and others are using fracking, that has caused a mini-oil boom. So guess what Putin? You’re going to have to tap into your reserves… Money reserves.
Now, there are numerous accounts on what is happening. Some say the U.S. and the Saudi’s are keeping oil prices now to hurt Putin, and have him backoff his lofty goals to bring back the Soviet Union as a formidable nuclear power and take over the world. Now, “If” this is true, the political gamesmanship has to be played carefully, most countries who are backed into a corner usually come out fighting. It will be interesting to see how the United States deals with a cash starved Russian Federation. But I doubt it. Just another boggy man scare. ISIS, ISIL, Muslim Brotherhood, Al Qaeda, Ebola, Bin Laden, Hezbollah, KKK, the IRS, you get the picture…
Another speculation is, the Saudi’s want market share, especially in the U.S. Fracking has been a mini boom for the United States oil industry, but at an environmental and an extraction price. The Saudi’s have plenty of bank, so they can absorb low prices better than any other country. The fracking industry will only be able to sustain low prices for only so long, they will either be forced out of business, or, forced to merge. Either way, the cowboy days in North and South Dakota may be coming to an end. Another is future market, anemic economic growth, etc…. And all this is told to us by, the ones who hold the power… the money people.
After watching a Bloomberg stock analysis show, the grey and fuzzy picture began to clear itself. Good ole’ hedge funds. Large sums of money was being taken out or divested of gas and oil investments for other greener pastures. Hedge funds, if you don’t know, is partially how we got into the real estate debacle. So now, we are getting a break at the pump, but, I would suspect, it’s not going to be for long, it never is. So someone yawned while one a beach and said, “Hey, is there anywhere else we can invest our huge capital, churn and drive up the market?”, then before anyone gets the real deal, pull out and watch the market collapse they get there profits, and me and you, investing with sharebuilder.com are left holding the bag on worthless stock….
The oil industry, although not in its last throws as a dominant economic engine, is beginning to show its cracks. The Saudi’s and other are trying to artificially lower the price for political and other monetary reasons, all of which points to the future. You are now faced with a diminishing product, that, is also beginning to be used less in the world following the now effect of the auto industry responding to efficient and gas alternative power plants for cars. If it’s sustained, we will have lived in a remarkable era, slowly getting off the addiction of oil. We will still use it, but not as much.
So we live in a different world, one not so much driven by ideology, but monopoly money. But used as pawns by the great hedge fund investors who garner all the wealth of those despicable 1%ers, take our money once again. Enjoy your gasland, if you can….
Peace Mickey, Ficky….