Oil Extends Losses; Brent Tumbles Below $70 a Barrel
Source: Dow Jones Business News
By Dow Jones Business News, December 05, 2014, 01:23:00 AM EDT
Crude-oil futures fell in Asian trade Friday, extending overnight losses after Saudi Arabia cut January prices for U.S. and Asian buyers.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $66.47 a barrel at 0558 GMT, down $0.34 in the Globex electronic session. January Brent crude on London's ICE Futures exchange fell $0.37 to $69.27 a barrel.
Brent crude, which settled at its lowest since May 25, 2010, in the previous trading session, has plunged by around 40% since June.
Saudi Arabian Oil Co., also known as Saudi Aramco, Thursday reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It also cut prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel.
Oil markets have recently been interpreting Saudi Arabia's monthly price adjustments as signs of the oil producer's intent to retain market share through a price war rather than adjusting export volumes.
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cstanleytech
(26,230 posts)I mean they could make a pretty penny by helping along a crash on the price and buying up futures cheap and then cashing in when the price goes back up.
joshcryer
(62,265 posts)Which is helping to lower prices even more, but they're responding to the saturation in oil, not causing the price to drop. They really don't want to lose the massive profits they made when the bubble peaked in June.
Jesus Malverde
(10,274 posts)A play by the saudis and those that direct them.
Delver Rootnose
(250 posts)...be at the request of the U.S. to put preassure on Putin and the Russians. A two for. And we may be paying them to do it under the table
Jesus Malverde
(10,274 posts)It's a win win win for the petrogarchs.
BobbyBoring
(1,965 posts)And that's a good thing. $65.00 is the price that makes cracking not worth it.
BlueEye
(449 posts)At $65 a barrel, the average consumer might just buy that Escalade after all.
Notice the strong correlation between higher petroleum prices and lower carbon emissions.
Odin2005
(53,521 posts)Rich people sell high, leave everyone else in the lurch, and then buy up all the deflated assets.
sendero
(28,552 posts).... for Russia, real bad news for shale oil producers, good news for almost everyone else.
FBaggins
(26,721 posts)Iran, Venezuela, and at least a couple other OPEC states are really feeling the pain.
sendero
(28,552 posts).... yes that is true. Almost everyone who makes substantial income from oil production is taking a hit.
Some believe that the reason the Saudis are refusing to cut production is pressure from us to cause more pain for Russia. I've long since given up trying to determine the truth to these sorts of geopolitical speculations, but the Saudis have done plenty at our behest before (and us at their behest) so I wouldn't rule it out.
FLPanhandle
(7,107 posts)It's hard for alternative energy to compete with cheap oil.
Eventually, we have to get off of fossil fuels and this just delays the inevitable while pumping more CO2 into the atmosphere.
Not sure if that is "good news for almost everyone else" in the long term.
sendero
(28,552 posts).... the "almost".
Saying you want everyone to spend a greater portion of their limited income on fossil fuels is not going to endear you or your agenda to many.
BlueEye
(449 posts)Cheap fuel eases the burden for working people, but also disincentivizes alternative energy. Meanwhile the AFL-CIO supports building the Keystone XL. Quality union jobs vs. the possibility of poisoning a water supply. It can be hard to reconcile sometimes.
sendero
(28,552 posts)... I am a fan of alternative energies. My car gets 40 mpg. I have a small solar power system to power my garden shed lights and tools. My house is SUPER energy effecient.
That said, most people are really burdened by the high cost of gasoline. Their choices are to drive less or perhaps get a vehicle that uses less gas. And lots of people have done that, tiny cars are now common here in north Tx whereas they weren't 15 years ago.
Telling them that they need to pay more so that we can develop alternative energies seems like a pretty dumb position to take.
European carbon tax schemes seem pretty regressive. We need to continue investing in green energy. Tax incentives also work pretty well.
I'm happy to hear you have an environmentally friendly lifestyle!
FLPanhandle
(7,107 posts)I believe the long term consequences of cheap oil are worse than the short term benefits.
Eventually those prices are going to go back up again and we won't have the number of alternative energy sources when it does because the investment isn't economically viable against cheap oil.
In the long run everyone loses, but most people in this country don't think long term.
newthinking
(3,982 posts)of long term economic cost, even at a personal level.
I see nothing good about this. We don't even get the full economic benefit at the gas pump. Half of it gets stolen by the investor class.
Countries that have kept the price of gas higher over the long run (Europe) are in the advantage.