what if oil goes to $50.00 a barrel?

The talking heads on cnbc said there is the potential for oil plummeting to new lows today

What if ?

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Permalink Reply by p umpjack on December 18, 2012 at 3:13pm

A Big Lie has spread like a virus through the energy-investing world.  It infects the television financial news and newspaper headlines every day.

It has polluted the 2012 election debate with misinformation by politicians and talking heads.

And it threatens your investments while making energy insiders billions each year.

The lie started spreading over the summer. You may have seen a report issued by Credit Suisse that said that oil could go as low as $50 a barrel. Or the predictions on CNBC saying $40 a barrel. Others said oil prices could fall even further.

These “talking heads” are saying that if we increase our supplies here in the U.S., oil prices will drop like a brick.

Permalink Reply by Ron D. Jockefeller on December 19, 2012 at 2:10am

I haven't seen any unbiased research at oilprice.com.  It seems to be mostly peak oil propaganda.

-RDJ

Permalink Reply by Jim Litwinowicz on December 18, 2012 at 3:37pm

Saw the interview and his point was that crude in the US may drop unless we change the laws to allow more exporting.   He said Brent and over seas oil would stay around $110 but our increasing oil production and the conversion to nat gas will cause a glut in stranded oil in the US. His main issue was to allow exports of oil and nat gas. Who knows, maybe he is an industry shill trying to boost profits through exports.

This is something I have said many times....that as the US eliminated imports because of nat gas, conservation, or even breakthroughs in "green energy"  that the laws of supply and demand would drive down the cost of oil. In that respect I contend we will ever be totally import free. The drop in crude will cause a slowdown in domestic production.

The caveat would be global demand. If China's growth continues, or the Third World continues to expand faster than the US then the global oil prices may stay high even if we stop importing all oil. Only time will tell.

Permalink Reply by Dan on December 18, 2012 at 5:45pm

Plummeting prices are never good. 

The biggest attraction of coal for power companies is the stable supply and price.  NG hasn't shown stable prices over the long haul yet and oil price fluctuations on the upswing all but cripple the economy when they spike high.  If oil price drops to $50, hopefully it is gradual or brief.

But if oil plummets to $50 a barrel and especially if it gradually drops there, we will see chemical and plastic plants moving home.  Soldiers coming home.  Bigger V-8s. More folks taking their kids and grandkids for ice cream.  Lower unemployment.  More vacations and road trips and visits.  A stronger nation and weaker enemies.  A better ability to pay what looks like increased taxes and fees.  But, less royalties?  

Permalink Reply by Joseph-Ohio on December 19, 2012 at 2:28am

Gasoline should then be about a maximum of $1.30 a gallon.

But I see no way that any of it will happen.

Too many investments already made presuming $100.00 a barrel oil.

Profiteering would be the buzzword.

Consumers would continue to pay through the nose. 

Permalink Reply by Schnoozie on December 19, 2012 at 3:28am

Lets see how good everyones memory is here.

When oil was rising $50.00 to a barrel. Congress would force energy executives to come in and testify in hearings under oath and explain themselves, they were always portrayed as greedy profiteers, sitting there with their nice suits on having someone point their fingers at them in shame.

Did you ever wonder why this does not happen anymore? Oil is higher than it's ever been, gas, diesel, higher. We are paying through the nose to operate our land and businesses and no-one seems to notice.

Where's the outrage?

Permalink Reply by Joseph-Ohio on December 19, 2012 at 3:40am

Being conditioned to outrageous prices tends to quell outrage.

Outrageous prices are the norm.

Think about credit purchases a second.

No interest or payments due for 18 months as an example.

All that means is that the price for whatever it is you're buying is marked up perhaps by a factor of two or three !

Permalink Reply by Ragnars Repo on December 19, 2012 at 3:58am
It seems to me if the price of oil is to plummet the US dollar will have to gain strength. With no government budgeting and the continued monetization of our debt, anyone actually think that happens?
Permalink Reply by Joseph-Ohio on December 19, 2012 at 4:08am

I'm thinking as you - never gonna happen.

But the question was ' what if ' ?

Permalink Reply by Lance Nimmo on December 19, 2012 at 8:17am

Bingo

Permalink Reply by p umpjack on December 19, 2012 at 9:07am

the metrics do not support it

but.... our oil would leave here so fast it would deplete us and make us even more dependant on the middle east

its like what if nat.gas went to $1.00 or less whoa it already did and look how it collapsed

Permalink Reply by Kathleen on December 19, 2012 at 12:01pm
In all honestly oil has only been above 50 dollars a barrel for 6-7 years besides a few short spikes.
I remember in the late 90's it went pretty low with many people being offered to buy there wells since they were being abandoned. Since I have this memory and the memory of only receiving 53 dollars after 3 months of production on 37 acres I just looked it up. It doesn't matter which source you look at these higher barrel prices are on the new side.
Also if I recall correctly a year or a year and a half ago the big oil guys where called in to face congress about these prices and they admitted making record profits and said they no longer wanted or needed subsidies.
This was rumored but I believe true: after those hearings the lobbyists quickly ran behind the scenes saying, oh they really didn't mean that, we still want these subsidies.

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