Effect of cheap oil prices

BP chief says 2-3 years of low prices possible: Oil price will stay low for 'two or three years' – BP boss | Oil price News | The Week UK

 

nothing lasts forever...

 

I never believe anything I hear from such sources. Firstly, their "predictions" invariably turn out wrong. Secondly, the world is a poker-game to them, and good liars win at poker.

 

+1

And much depends on what goes on in the middle east. The Yemen government fell today. The 90 year old Saudi King died. His 79 year old half brother likely won't change oil policy, but he is rumored to have alzheimers. What happens with the next guys.

 

It's never as simple as it's meant to look.

 

Well, the longer it stays low, the sooner I can buy a plug-in

 

Good plan; you'll need it when gasoline bounces back to $5 a gallon.

 

Saudi are desperate at this point. With the end of petrodollar nearing and market share loss in far east they will do anything to stay afloat.

Now what would happen with prices if they stay as low as they are, but the dollar crashes?

 

OPEC is doing what any cartel does best; smashing the competition by flooding the market, and crashing the prices.

It hasn't escaped attention that when Putin invaded Georgia at the end of 2008, oil tanked into the low forties shortly after. When Putin flexed his muscles again in Ukraine, it wasn't a surprise when oil prices tumbled again soon after. The US State Department once boasted that they broke the backs of the Soviets by manipulating the price of oil.

I'm sure all several parties to this play stand to gain from it in some way. The Saudis will see the departure of many shale-oil producers from the market. Oil-sands producers will have to scale back production and exploration to remain solvent. Venezuela will not be able to compete, China will abandon some of their own production in favor of buying oil from the market. Western bankers will be able to exert greater pressure on Russia to "play ball." The world runs on oil, and those who have their hands on the taps, control world events.

 

as with any tool you can use it only so many times before you burn all your matches. With BRIC pulling out of petrodollar (Russia officially selling it's assets) and trade in 2014 accounting only for 1/4 of what it was year prior this may be last time we've done it.

Saudi have very bad choice to make: either to pull out of petrodollar and face ISIL alone w/o our support, or loose their market in the east to non-petrodollar trade (Russia, Iran, Venezuela..). If they stay they have to carve a new market in west by killing shale and North Sea competition. Perhaps they can even take on tar sands which almost at loss now if Keystone is built unless you guys discount your dollar to what it was 2 decades ago. And this could go for long unless some kind of deal made.

 

At $40 a barrel, it's staying in the ground.

 

Make CND .60USD and it is 24$.

 

Buyer's markets are fickle:

The risk is an 'executive' might use current low prices to shutdown plug-in manufacturing.

Bob Wilson

 

The car manufacturers will probably continue Plug-Ins as long as Congress supports it with the existing comprehensive set of incentives for buyers and manufacturers, including CAFE 54.5 MPG. In another post today there was an article saying CAFE 54.5 would be reviewed in 2017. Toyota said they were happy to continue meeting that target, but that's when there could be a change in the target by other companies. So if the gaso price stays low thru 2017 (my guess right now is price will stay lower, but who knows?) might be a problem longer term with the CAFE 54.5.

Re: orig OP, today they are saying Saudi maybe keeping price low to muzzle Iran, not Russia. Another theory.

 

how big a battery would toyota need to go to to qualify for $7,500. federal tax rebate?

 

For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

So gotta be a Volt at 16 kwhr batt to get the max

 

The Saudi's are playing a game of I can outlast you. Their enemy - Iran - has just gained more power in Yemen, and their enemy ISIS (or ISIL or just IS) gets oil revenue. Lower oil prices hurt them more than Saudi.

If the US dollar crashes and the price goes low in dollar terms, less and less money will be invested in getting oil while at the same time low prices stimulate demand to use oil. It is classic whip saw behaviour that will cause a bigger price spike and harm to European and Asian economies which look weak today.

Yep, and it looks like with current prices ($45), 30,000 people in the US oil industry are losing their jobs. The oil of working wells will likely still pump at $40 (as price at most is $35 or lower in the US) but future oil slows.

 

thanks. so toy would have to add 12 kWh, and room in the gen IV platform to hold it. that gives them an extra 5k to play with. i wonder how much the batteries are these days?

 

I don't think we have any good feel for battery costs. My guess is $15k for the total 16 kwhr battery cost. I think what we are probably seeing is if these batts and cars are Made in USA, then Congress gives certain CAFE credits, financing credits, and so on. So if you're GM or Nissan you can look past the battery cost to get the credits. Toyota not playing that Made in USA game, so batt cost is batt cost.

 

that's interesting. i had no idea the mfg was getting money as well as the end user.