Cheap petrol is good, right? Most of us probalbly dont give a toss why fuel is cheap at the moment..but we may soon enough. While we enjoy cheaper petrol at the bowser, the economies of quite a few countries are suffering, including our own. Why and who? Glad you asked. The Saudis are flooding the market, they are over producing which pushes prices downward. Why? Because the USA is investing heavily to become self sufficient and the Saudis dont like it. The US investment is in shale Oil Production which is more expensive, it requires investors and it requires those investors to keep their money in the kitty for the long haul. And Russia is also enjoying higher oil production and export than ever before. The Saudi response to this?...Produce more and sell it to European and US markets, undercutting Russian income. By forcing lower prices on the rest of the world, for oil they can switch on and off like a tap, the Saudis manipulate revenue, profits and ultimately, investment. They are making it unattractive for anyone to invest in oil exploration and production, making it more and more difficult for the US and other countries to become and remain self sufficient. Only yesterday, US Steel announced the loss of over 700 jobs due to lower demands for pipes used in oil research, drilling and poduction. Thats only one example of losses attributed to this oil war. There are more and more to come The economies of counties like Venezuela are almost entirely dependent on the proceeds of petroleum products...Their oil is near worthless at the moment and income is low. Do the Saudis give a shit? Nope. Make the most of it. Were going to pay a heavy price for the discount we enjoy right now. The big boys are playing dangerous games and one day we will be asked to pay the price.
Posted on: Tue, 06 Jan 2015 23:40:57 +0000
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