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On March 23rd, Politico published a piece looking into the crashing prices of oil, and specifically the US West Texas Intermediate benchmark.
In it, it described the way US President Donald Trump initially praised oil and natural gas as “our gold.”
“That’s our gold,” Trump declared. “That’s gold underneath our feet.”
He did so during the ceremony when Shell Oil was beginning to build new natural gas processing facility, and celebrated the nation’s shale boom.
The collapse of energy prices, due to the Saudi-initiated price war with Russia, has led to the cancelling of that project.
The crash is also estimated to knock out about half of all shale producers, according to analysts at Raymond James Inc., if prices remain at between $20 and $30 per barrel.
The WTI price as of the morning on March 25th is $24.77 per barrel.
“There is no sugar coating it, U.S. oilfield activity will collapse with oil prices well below $30,” on the WTI benchmark, said analyst Praveen Narra of Raymond James in a market update published on March 23. “The pace of rig count declines is likely to occur at a pace we have not seen before.”
In addition, Trump either fails to recognize or doesn’t want to address it.
Good for the consumer, gasoline prices coming down!
— Donald J. Trump (@realDonaldTrump) March 9, 2020
Notably, Politico suggested that Riyadh was carrying out its oil price war against Russia, and even ramping up pressure with a direct approval from the US, at least based on the testimonies of two unnamed sources.
Two people with knowledge of the call told POLITICO that Trump told the Saudi leader that he was fine with the kingdom’s plans to produce more oil to try to squeeze Russia out of certain markets. He only asked that the coming flood of oil wouldn’t drive prices down far enough to hurt U.S. producers.
“Keep [prices] low, but keep it viable” for U.S. drillers to remain in business, was Trump’s message, according to a former senior administration official who was briefed on the call. “It wasn’t a difficult conversation. It was just, ‘Hey, want to make sure we’re on the same page here.’ Saudi said, ‘We gotcha.’”
Thus, it would appear that even MSM is admitting that, maybe, it wasn’t Russia initiating the campaign to “ruin” the US economy, but it was rather Saudi Arabia carrying out this undertaking to flood the oil market, as it has done similarly in the past.
According to Ryan Sitton, the state oil regulator in Texas, tens of thousands of Texans are being laid off at the Perm oil shale fields in West Texas as companies stop drilling. Abbreviation messages began to appear. Last week, Canary LLC service and drilling company cut 43 workers.
And the oil pipe manufacturer Tenaris SA is sacking 223 people from the Houston plant. But the biggest “blowout” so far came from Halliburton Co., the world’s largest provider of fracking services, who laid off 3,500 workers at its headquarters in Houston.
The cuts follow a sharp drop in prices for West Texas Intermediate, the benchmark oil brand in the United States. Futures in New York fell more than 60% this year, and they had the worst week since 1991.
While workers in almost every industry are at risk of slowing economic growth, few are at greater risk than those in the oil sector.
According to a report from the Brookings Institution, the Midlands-Odessa region of West Texas, dominated by Occidental Petroleum Corp. and Parsley Energy Inc., may be completely busted.
According to Sitton, more than 40% of the workforce in Midland is engaged in industries with a high degree of risk, mainly oil and gas, which is the highest rate among all regions of the United States.
In general, the labor force in the services sector today is about 316,000, which is 30% lower than in 2014.
According to Moody’s Corp., the next four years will be crucial for the oilfield services sector, as North American service companies owed $32 billion in debt by 2024.
The lack of pricing reserves for service companies begins to appear at a time when their customers are looking for discounts.
“I urge you, as a respected supplier, to review your prices in accordance with this mission and inform us of your adjustments at your earliest convenience,” wrote Parsley Energy Chief Operating Officer David Dell’Osso in a letter with which he managed Check out Bloomberg News. “In 2020, we focus on a mission to develop our assets in a safe, efficient and environmentally responsible way while reducing costs by at least 25%.”
This week, Vicki Hollub warned, without revealing details, of her employees at Occidental Petroleum about the “aggressive steps” that the geological company will take.
“In the coming days we plan to provide you with more detailed information,” Hollub wrote in an email sent to employees on Tuesday. “Some of the measures we take will be temporary during this crisis, while others may be permanent.”
In short: the lobbyists are suffering, at least the energy sector ones. This cannot stand, and MSM needs to counter these adverse movements and return to the status quo and the good profit margins, even at the expense at people’s “grandparents.”
Meanwhile, the oil industry is expected to keep filling oil storage with crude in the weeks and months ahead as the pandemic’s economic contagion spreads through the rest of the world, cutting demand for natural resources including oil.
The global oil price fell to lows of $25 a barrel, from more than $65 at the start of the year, and remains below $30 a barrel. Credit ratings agency S&P has warned the industry that the oil price may fall to $10 a barrel this year.
The hunt for affordable oil storage will be made more difficult after Saudi Arabia’s “vessel booking spree”, which has pushed freight rates “through the roof” in the past three weeks, the analysts said.
MORE ON THE TOPIC:
- Putin Won’t Blink First: Putin Rejects Potential US ‘Intervention’ In Russia-Saudi Oil War
- U.S. Plans To Sanction Russia For Saudi-launched Oil War: WSJ
- Russian Economy Is Shrinking Amid Falling Oil Prices, Global Economic Meltdown
- Crude Oil Slumps Towards Lowest Price Since 2003, Fuelling Fears Of Global Recession
combine immorality + stupidity=an amerikan USA and SA r saddled w huge foreign debt; Russia enjoys huge reserves…..lower prices harm US the most, than SA, Nigeria, Indonesia, Venezuela, Norway, Denmark—-nations that carry debt and have not diversified their economies…Iran is less harmed since they also possess natural gas. Russia exports huge amounts of gas to China, Japan, Europe—the US oil mafia is dead—and they import most of their oil and gas from Canada…already more than 10,000 oil workers have laid off….a destitute economy for a degenerate population
The US is as always attempting to board their Hollywood ‘narrative bus’ that is completely bogged down in the Washington Swamp, whilst their chosen enemies are dealing with the realities as they travel the world seeking mutual and fair trade without the US Mafia style military protection rackets.
When the world is free of the current pandemic , low oil prices will stimulate all economy’s, rather than the Petro Dollar tax imposed by the USA and the chosen few world oligarchs.
When we link everything together, America’s incessant genocide against the rest of the planet, its increased sanctions, including indirect medical sanctions, against the population of Iran trying to battle the global pandemic, its attempted worldwide grab for any and all medical equipment for itself alone, one quickly realises that these amoral savages, have long ago forfeited the right to be called human …..or even to live amongst humans….they are pure evil !
when would be a ‘good’ time to initiate an embargo ?
right away of course
Shut up you pile of shit.
it seems that he is right except he doesn’t include the friggin jews in his summary and that is of course incorrect since he really should have included the final evisceration of the jews in palestine, to make the picture whole.
I see your reply meets with the literary standards that one would expect from someone debased, amoral and lacking in empathy….you passed with flying colours !
no one really cares that the murikans are out of work. they’ve been visiting that same future on many countries. the only thing missing is the active pre-meditated slaughter of people in other lands. Corona loves fat people. get it on.
fat people ? – like it, got a reference ?
https://duckduckgo.com/?q=overweight+people+and+corona+virus&t=ffab&atb=v137-1&ia=news
never thought to look, thanks; little publicity on this, lots of old fat people – would be nice to get some known good numbers, propaganda now
UK did a recent survey on the fat people numbers they are treating. you can probably find that easily.
would somewhat explain the severity in Italy, US should get hammered
During the 1812 war against Napoleon’s Grand coalition Russia retreated until Napoleon had overreached they then launched an overwhelming counterattack when Napoleon was most vulnerable.
During WW2 at Stalingrad the Red Army retreated and and did just enough defending until the German 6th army had overreached then launched an overwhelming counterattack when they were most vulnerable. They went on to use the same strategy at Kursk playing rope-a-dope with 2 vast tank armies waiting well behind the lines out of range of German intelligence until the moment when the Germans were most vulnerable then launched a counterattack.
Russia has been under attack economically and socially by the USA arguably since 2014, at least that’s when it heated up to a full scale economic war. They only thing keeping this war from going kinetic was fear of Russia’s military power. Russia reaction was to retreat within it’s borders and wait for the USA to overreach economically and politically.
Given the war being waged against Russia and the state of the US economy I have a hard time believing that Russia acted against it’s own economic self interest and refused to play ball with the Saudi’s and cut production at exactly the time when it would do the most damage to the US economy.
This was classic Russian strategy.
Just another in the brilliant strategy moves by the Zionist cabal. Those that predict the collapsing of the American petroleum market will be disappointed, however. If one were to look closely at the US petrol market, in all it’s forms, it is also first and foremost a money laundering operation. Just as the insurance, medical and financial institutions are. Were they not, they would all have collapsed long ago, QE or no QE. As shale has been below profit levels for quite some time, where are all the predicted bankruptcies and oil company collapses that should have occurred? That they expected this to pressure Russia et al., shows that they are woefully inept…or the real intent (as I expect) is to collapse the entire western economies and are using the Covil19 op to help facilitate this. With the roll-back of rights and institution of martial law (whether they call it that or not) it only furthers their goals. Combined with the privatization wave they unleashed upon the world, collapsed governments (by design) will have to rely on corporations to service the public…which of course will come at an ever increasing price. The one monkey wrench thrown into the works? Russia, Cuba and China coming to the rescue of the Italians. This will help stabilize and prevent the collapse of the Italian gov, which seems to have been the intent of the EU masters. Hopefully, it will also highlight to Europeans the total clusterfuck fraud that is the EU. The US? Well, we’re fucked no matter what…especially as we are letting these assholes institute martial law, just without the declaration, in the phony war on Covid19.
if that is the case it’s another totally brilliant political moves by dunderhead dunny the dunce.