Wednesday, January 14, 2015

Oil price crash, political nonsense and public narrative

It is a little amusing to watch the price of oil falling and all of the so called experts that come out of the woodwork to proclaim their opinions.  I wonder where they were all these years as we have watched the oil markets and the strange dynamic that makes up the OPEC and non-OPEC nations.  I mean you suddenly hear the grand proclamations that there never was an oil supply issue, that all this talk of "Peak" oil was nonsense all along!  LOL It really is quite humorous.  Why do I find this so funny?  Well I along with many people have read about and followed these markets and resources for a very long time.  We have a basic idea of the players, their production capabilities, their known reserves and their probable production abilities.  If any of these experts had bothered to dig into any of it they would have a much greater appreciation for the sensitive production nature of the oil markets.  Now am I an oil analyst or energy expert???? Not on your life.  But the signals I am seeing in the media and around the WWW really is giving us some clues that this has all the markings of an agenda and market manipulation.

Now why would I state something like that?  Well the straw that broke the camels back was the article quoting Saudi Arabia as stating that we will never again see $100 oil.  WHAT?  Yes, if you know anything about these markets you know that is absolute BS!  Here is why I think this is all spin and being used as a weapon.

Saudi Arabia says never see $100 oil again!

1. US oil production due to fracking has climbed siginificantly, but most of these producers in the fracking market are leveraged to their eyeballs and planned their operations on oil at much higher prices.  They will not be able to withstand these low oil prices for very long and the wholesale collapse of the fracking market will begin if it hasn't already.

2. The US and the money masters appear to be using the lower oil prices as a weapon against Russia, Iran, Venezuela.  Other countries being crushed are Mexico and of course the fledgling small producers in the US.  The money masters will keep the prices down as long as it serves their political interests.

3. Oil production from fracking sources is not a long term energy production source.  The current prices will set back fracking production for some time, but as prices return to a profitable range the industry will rebound.  It may take some time.  But even then I don't see production from fracking to be nearly the long term production source as traditional oil fields.  There are environmental impacts, natural resource contraints, and pressure will continue to mount against fracking production as ground water turns up contaminated, and earthquakes and other things take center stage.

4. Oil limited resource and the powers that be will only hold the prices down as long as it suites their interests.  But given the limited nature of this resource I don't see that happening for very long.

Many people are unaware, but it isn't Saudi Arabia that is the worlds largest oil and gas producer.  It is Russia.  This makes this quite interesting and the dynamic is quite complex.  This affects many players in the global markets.

So I am going to go out on a limb here and put it in writing that my wager is that oil prices will be at $80 a barrel or higher in the next 3-5 years if not MUCH higher.

What does all this mean to you an me?  We the homesteaders, preppers, survivalists, or those who look for and watch these times we live in are all too aware of the addicted to oil nature of our economy.  You should have fuel set aside and rotate it.  Provide for enough fuel that you can make it to any alternate location you might need to go in an emergency.  Keep your fuel tanks topped up and try not to let them fall below 3/4 of a tank.  Take advantage of these lower fuel prices while you can.  I don't see it lasting over the long term.  Saudi doesn't have the long term staying power either despite their talk.  They have social programs and economic issues in their country and these low prices are killing them as well.  They have more staying power than most, but I don't see them sticking with this for long.  Like I said, my wager is 3-5 years and prices will be back if not sooner.

Right now the low prices are a blessing for us that we need to take advantage of the best we can.  Maybe now is the time to start looking for that diesel truck or car that gets great economy while everyone else swallows the BS all over the media about never seeing $100 oil again.  Maybe it could be a good time to look for the preps you need while people don't think they need them...

Take care, and Yah(God) Bless!


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