Crash?

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neverfail
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Re: This is absurd!

Post by neverfail » Mon Mar 09, 2020 10:15 pm

Administration officials will present the President with options, which will include financial assistance to industries affected by the coronavirus and the oil price crash. These measures may include cash injections, tax credits, payroll tax cuts, and tariff reductions on specific Chinese imports, Bloomberg sources familiar with the matter said on Monday.

https://oilprice.com/Energy/Oil-Prices/ ... YqH6-eevxg
(Snip)
While US oil companies may be feeling the pinch, US consumers—mainly drivers—may be in for a real treat, with gasoline prices at the pump expected to fall. Average gasoline prices in the United States are already the lowest they’ve been in a year, according to Gas Buddy. Gasoline could dip below $2 per gallon in the coming weeks if the oil price war persists, Patrick DeHaan, head of petroleum analysis at Gas Buddy told USA Today.

And as gas prices go down, discretionary spending goes up—a positive development for the economy.
Screw government handouts to the oil companies! A radical reduction in the price of oil and its derivitives has a potential stimulous impact on the wider economy like that of a round of tax cuts (I mean, a more broadly based round of tax cuts than the ones normally provided by incumbent US Administrations, especially Republican ones, for the purpose of rewarding targeted groups of supporters :twisted: ). Not only does it benefit motorists releasing more of their income for spending on other goods and services but the flow-on leads to lower fuel imput costs for transport, industry and agriculture leading to enhanced profitability for firms and individuals in these industries.

A more appropriate response by government might be to temporarily increase excise and other taxes on petrol in order to deter wastage thorugh excessive usage. When the price of oil rises again the tax could be progressively removed on a sliding scale. Meantime, the revenue raised could be dedicated in total to the relief of specific industries hurt by the Coronavirus epidemic.

If I know the way government works over there it is more likely that Trump will simply add the cost of the relief measures to the national debt rather than do the honest and honourable thing by funding it with increased government revenue gained via the proposed temperory tax hike.
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Be warned though! Unless the disruptions to commerce and trade globally from the Coronavirus pandemic sinks the world into a prolonged economic recession as I expect it too, the current low prices resulting from depressed global demand for oil and its derivitaves cannot and will not last for long. Just as a drop in the price of petrolium products represents a de-facto boost to incomes and purchasing power all round; the ensuing price rises has the opposite effect of diminishing real incomes and depressing consumer spending.

Jim the Moron
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Re: Crash?

Post by Jim the Moron » Mon Mar 09, 2020 10:45 pm

"Why did Saudi Arabia start an oil price war?"
https://scmp.com/week-asia/explained/ar ... -price-war

"It's a lot of oil with no place to go."

"If you're Russia, it's worth it to take a three month price hit to see if you can knock out US oil exports."

". . . a major incentive for Saudi Arabia to keep prices low is China," which "could be a primary buyer of the Saudi's discounted oil."

". . . cheaper prices will not necessarily lead to more demand for fuel until the [Covid-19] outbreak is contained."

neverfail
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Re: Crash?

Post by neverfail » Tue Mar 10, 2020 3:21 pm

Jim the Moron wrote:
Mon Mar 09, 2020 10:45 pm
"Why did Saudi Arabia start an oil price war?"
https://scmp.com/week-asia/explained/ar ... -price-war

"It's a lot of oil with no place to go."

"If you're Russia, it's worth it to take a three month price hit to see if you can knock out US oil exports."

". . . a major incentive for Saudi Arabia to keep prices low is China," which "could be a primary buyer of the Saudi's discounted oil."

". . . cheaper prices will not necessarily lead to more demand for fuel until the [Covid-19] outbreak is contained."
Jim, the way I read it there is a power struggle taking place between Saudi Arabia and Russia over which of the two is going to be the oil-exporting countrys' "swing producer". Traditionally it has been Saudi Arabia but now Russia is defying its authority; presumably for the purpose of wresting the global oil price manipulation agenda from out of the Saud dynasty's hands.

Given that both claim to be well equipped with banked assets to sustain themselves over a long period of low prices; unless one or both are bluffing then the standoff is likely to be long and bitter.

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Doc
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Re: Crash?

Post by Doc » Tue Mar 10, 2020 4:16 pm

neverfail wrote:
Tue Mar 10, 2020 3:21 pm
Jim the Moron wrote:
Mon Mar 09, 2020 10:45 pm
"Why did Saudi Arabia start an oil price war?"
https://scmp.com/week-asia/explained/ar ... -price-war

"It's a lot of oil with no place to go."

"If you're Russia, it's worth it to take a three month price hit to see if you can knock out US oil exports."

". . . a major incentive for Saudi Arabia to keep prices low is China," which "could be a primary buyer of the Saudi's discounted oil."

". . . cheaper prices will not necessarily lead to more demand for fuel until the [Covid-19] outbreak is contained."
Jim, the way I read it there is a power struggle taking place between Saudi Arabia and Russia over which of the two is going to be the oil-exporting countrys' "swing producer". Traditionally it has been Saudi Arabia but now Russia is defying its authority; presumably for the purpose of wresting the global oil price manipulation agenda from out of the Saud dynasty's hands.

Given that both claim to be well equipped with banked assets to sustain themselves over a long period of low prices; unless one or both are bluffing then the standoff is likely to be long and bitter.
Putin is trying to kill US shale oil production. Which is more expensive to produce than Russian oor Saudi oil.
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

neverfail
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Re: Crash?

Post by neverfail » Tue Mar 10, 2020 10:51 pm

Doc wrote:
Tue Mar 10, 2020 4:16 pm

Putin is trying to kill US shale oil production. Which is more expensive to produce than Russian oor Saudi oil.
....and Putin is being helped along by your great and glorious ME ally Saudi Arabia too, I notice.

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Sertorio
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Re: Crash?

Post by Sertorio » Wed Mar 11, 2020 4:47 am

neverfail wrote:
Tue Mar 10, 2020 10:51 pm
Doc wrote:
Tue Mar 10, 2020 4:16 pm

Putin is trying to kill US shale oil production. Which is more expensive to produce than Russian oor Saudi oil.
....and Putin is being helped along by your great and glorious ME ally Saudi Arabia too, I notice.
Allahu akbar!... :lol:

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Doc
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Re: Crash?

Post by Doc » Wed Mar 11, 2020 5:06 am

neverfail wrote:
Tue Mar 10, 2020 10:51 pm
Doc wrote:
Tue Mar 10, 2020 4:16 pm

Putin is trying to kill US shale oil production. Which is more expensive to produce than Russian oor Saudi oil.
....and Putin is being helped along by your great and glorious ME ally Saudi Arabia too, I notice.
I suppose they are just punishing Putin for interfering in our elections. OR maybe Putin is doing it to support the green new deal. Or maybe he is just angry about Bernie getting shafted.
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

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Milo
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Re: Crash?

Post by Milo » Wed Mar 11, 2020 7:34 am

How long before Trump attacks the stock exchanges as 'fake money'?

Maybe the 'deep bank' is after him?

neverfail
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Re: Crash?

Post by neverfail » Wed Mar 11, 2020 2:27 pm

Milo wrote:
Wed Mar 11, 2020 7:34 am
How long before Trump attacks the stock exchanges as 'fake money'?

Maybe the 'deep bank' is after him?
:lol:

neverfail
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Re: Crash?

Post by neverfail » Wed Mar 11, 2020 2:34 pm

Doc wrote:
Wed Mar 11, 2020 5:06 am
I suppose they are just punishing Putin for interfering in our elections. OR maybe Putin is doing it to support the green new deal. Or maybe he is just angry about Bernie getting shafted.
All idle speculation Doc - steeped in the fasle supposition that the USA is the only show in town?

The Saudi Arabian king tried to tell Putin that Russia needs to cut back on production in unison with Saudi Arabia in order to bring supply back into allignment with demand and Putin as much as told him "up yours, raghead!". So the Saudi king as much as replied "well, I will show you - our production costs are cheaper than yours!" and ordered the oil rockers to work overtime for the purpose of bankrupting the Russian Federation.

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