I tuned out of listening to his economic policies when he started claiming nothing is wrong with our economy.

One week later, the stock market crashes. 

I tuned out of listening to his economic policies when he started claiming nothing is wrong with our economy.

I can honestly say I have never heard him say anything.   It is a trick I learned during the draftdodger's regime.  PITA to have to mute or switch channels that fast, but blocking the lies helps my mental health enormously.

Hey, I know I am not missing anything important.

great vid!  going to share it   

The reason oil prices have crashed is demand destruction. Less meaningful economic activity means less demand, so the oil just backs up as brick and mortar businesses shut down. Up until last week we were cruising on a wave of speculative bubbles based on all sorts of financial instruments tied into the great promise of fracking coming to save the day, but the truth about fracking is it's very expensive and gets a lot less bang for the buck than the conventional methods that have dried up.

So when he said all those wonderful words about how the economy has improved.... yeah. Not so much.

The reason oil prices have crashed is demand destruction. Less meaningful economic activity means less demand, so the oil just backs up as brick and mortar businesses shut down. Up until last week we were cruising on a wave of speculative bubbles based on all sorts of financial instruments tied into the great promise of fracking coming to save the day, but the truth about fracking is it's very expensive and gets a lot less bang for the buck than the conventional methods that have dried up.

So when he said all those wonderful words about how the economy has improved.... yeah. Not so much.

The reason why oil started going down in the first place is due to fracking. Fracking allowed us to obtain oil from previously unobtainable sources, which catapulted the US to the number one oil producer in the world.

Yes, thats right: the US produces more oil than Saudi Arabia.

Now with the economic slowdown and the drop in the price of oil, it's only natural that the surplus generated by the US directly influences the price.

Why has the price of oil been dropping so fast? Why now?

This a complicated question, but it boils down to the simple economics of supply and demand.

United States domestic production has nearly doubled over the last several years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once was sold in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising year after year. Even the Russians, with all their economic problems, manage to keep pumping.

There are signs, however, that production is falling in the United States and some other oil-producing countries because of the drop in exploration investments. But the drop in production is not happening fast enough, especially with output from deep waters off the Gulf of Mexico and Canada continuing to build as new projects come online.

On the demand side, the economies of Europe and developing countries are weak and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit.

A central factor in the sharp price drops, analysts say, is the continuing unwillingness of OPEC, a cartel of oil producers, to intervene to stabilize markets that are widely viewed as oversupplied.

Iran, Venezuela, Ecuador and Algeria have been pressing the cartel to cut production to firm up prices, but Saudi Arabia, the United Arab Emirates and other gulf allies are refusing to do so. At the same time, Iraq is actually pumping more, and Iran is expected to become a major exporter again under the recent nuclear deal.

Saudi officials have said that if they cut production and prices go up, they will lose market share and merely benefit their competitors. They say they are willing to see oil prices go much lower, but some oil analysts think they are merely bluffing.

If prices remain low for another year or longer, the newly crowned King Salman may find it difficult to persuade other OPEC members to keep steady against the financial strains. The International Monetary Fund estimates that the revenues of Saudi Arabia and its Persian Gulf allies will slip by $300 billion this year.
 

Bottom line:  oil is a BOOM, BUST, BOOM, BUST, [repeat] industry.  It always has been.  Regardless of the cause, each time oil producers increase production to take advantage of the higher prices, the end result is lower prices due to increased production.  Demand is a factor in that when prices drop, oil is more affordable, as are consumer goods which are distributed for the most part using oil products.  Those who buy and sell futures contracts do effect the market price, but not as much as the supply and demand side.  Production and consumption drives the prices more than speculation on contracts.

http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0

The reason why oil started going down in the first place is due to fracking. Fracking allowed us to obtain oil from previously unobtainable sources, which catapulted the US to the number one oil producer in the world.

Yes, thats right: the US produces more oil than Saudi Arabia.

Now with the economic slowdown and the drop in the price of oil, it's only natural that the surplus generated by the US directly influences the price.

Sure, it is a new source allowing us to compete better, but the fact is is that it much dirtier, costly, and much less efficient.

Doesn't the drop in oil prices hurt fracking since it costs so much more that it cannot be as competitive. Fracking feels more like a last ditch oil source.

Sure, it is a new source allowing us to compete better, but the fact is is that it much dirtier, costly, and much less efficient.

Doesn't the drop in oil prices hurt fracking since it costs so much more that it cannot be as competitive. Fracking feels more like a last ditch oil source.

You didn't read the excerpt I posted.

Gulf and Canadian deep water wells are increasing production, and new projects are coming online.  The US domestic production has nearly doubled in just a few years.  That's not all fracking, but a huge part of the first year was.

Oil over $65/bbl is needed to make not just fracking cost effective, but lots of exploration and production operations cost effective as well.  The beginning of the article I linked said some 250,000 oil industry workers are looking for jobs now due to the low oil prices.

So, hopefully the industries saving a ton on oil and gas consumption right now will be able to do some expansion and maybe hire some of the unemployed.

One thing people forget, but politicians don't, is when gas prices go down, so do the tax revenues tied to gas consumption.  That's why they are trying to push new increases on the taxes for gas.  When it's low, they say people can afford more taxes.  When the price goes up again, ... <crickets>

So, the money being saved by consumers now is being eyed by every business and politician in the country to see how they can get us to fork it over in other ways.

Sure, it is a new source allowing us to compete better, but the fact is is that it much dirtier, costly, and much less efficient.

Doesn't the drop in oil prices hurt fracking since it costs so much more that it cannot be as competitive. Fracking feels more like a last ditch oil source.

They aren't worried about costs, as storage of oil is a long term investment. We already hit peak oil in the 1970s, and the wells in the middle east are drying up; especially in saudi arabia.

The US, Brazil and Russia will become the new oil production centers of the world, and everyone will depend on them.

And the US has possibly the largest oil surplus in the world as well, enough to power the US for an estimated 10 years if the wells went dry around the world. We also have the largest source of natural gas, as well as an extremely large source of coal, same as Russia.

They aren't worried about costs, as storage of oil is a long term investment. We already hit peak oil in the 1970s, and the wells in the middle east are drying up; especially in saudi arabia.

The US, Brazil and Russia will become the new oil production centers of the world, and everyone will depend on them.

And the US has possibly the largest oil surplus in the world as well, enough to power the US for an estimated 10 years if the wells went dry around the world. We also have the largest source of natural gas, as well as an extremely large source of coal, same as Russia.

Our shortfall is in oil refinery capacity.  The US has not been building new refineries, so we'd have to ship the oil to another country, pay for refining, and ship the petroleum products back here.

I can't understand how we don't at least have a plan to build and offer services to other North American drillers if the US demand/production wanes.