It's hard to overlook, but gas prices at the pump are falling. Drivers are getting their Christmas gifts early. Almost a 15% drop in the last 2-3 weeks. But, this time: it's different. This could be a trend that could last for months, if not years. Why? No demand, or so much less demand as to depress prices. Fuel efficient vehicles, less travel, electric autos, hybrid autos, Elon Musk's multi billion dollar battery factory in Nevada. It's enough to make a sheik cry.
Saudi Arabia announces they will not stop pumping. Makes sense, why cut back and let the Americans get a toe hold in new markets? Seems like some economists haven't figured that one out yet. If the USA is pumping 3.5 million barrels extra into the pipeline, and there's already slack in the market, prices will come down. And they have, most everywhere.
Now, what happens next? Hmmm. Lots of folks are starting to make some dire predictions. If the market wants $85/ a barrel and your cost is $120/barrel, how long will you continue to produce at this price? Now we have Mr. Putin negotiating with his good Communists buddies down south: Chairman Xi and Co. The Chinese Communists like nice neat contracts with predictable outcomes. Mr. Putin likes to keep a steady income stream. Contracts, signed, Chairman go home happy, like kid with puppy.
Now what if you're Venezuela: inflation running high, crime rampant in the streets, and Cubans knocking on your door asking for favors(oil)? Not such a good situation. Not a lot of options, either. Others are controlling the market for your No. 1 product. The natives are restless; your allies are going silent; students are in the streets. What now , Mr. Maduro? Nationalization? Been there, done that. Free food? Done. I see trouble brewing in South America's largest oil producer. Could be a coup standing in the wings. Will Raul Castro show up in Venezuela as an "advisor"? Sort of like Russian troops showing up in Ukraine to protect "Russians".
Keep your eyes on the price of oil- it will move and move governments.
Lake Tahoe, California's Alpine playground, is anchored on the west shore by Homewood/Tahoma, straddling two counties:Placer and El Dorado. The mayor of Tahoma posts information related to the area and items of interest to residents and visitors alike. Its goal is to be informative, humorous, and timely. Hope you enjoy the site.
Subscribe to:
Post Comments (Atom)
Biden Hosts Island Nation Leaders
In the first ever meeting among Pacific allies, President Biden hosted a tripartite meeting in Washington, DC. His goal: to indicate ...
-
Finally, some civic action that will affect Lake Tahoe and its residents. The town of Truckee has passed an ordnance that will ban t...
-
Americans today live in a world shaped by our Civil War. The war guided until its end by Pres. Abraham Lincoln. The war ended in Febru...
-
So, Thanksgiving is over, finito, completo. Christmas trees are on the stands, in the lots everywhere. It happens fast now as retai...
No comments:
Post a Comment