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December 1, 2014
The Global Shakeout From Plunging Oil
The world has experienced sudden supply gushers before. In the early 1930s, a flood of oil from East Texas drove prices down to 10 cents a barrel—and desperate gas station owners offered chickens as premiums to bring in customers. In the late 1950s, the rapidly swelling flow of Mideast oil led to price cuts that triggered the formation of OPEC. And in the first half of the 1980s, a surge in oil from the North Sea, Alaska’s North Slope and Mexico caused prices to plunge to $10 a barrel.-- Daniel Yergin - WSJ
Posted by gerardvanderleun at December 1, 2014 6:07 AM. This is an entry on the sideblog of American Digest: Check it out.
Your Say
You are seeing the beginning of the correction in the world's economy. The value of fiat money will bow to the value of metals. In turn other fungible trade items will adjust to those prices.
That old golden rule will return. "Thems what gots the gold, makes the rules."
Posted by: Vermont Woodchuck ![[TypeKey Profile Page]](http://americandigest.org/sidelines/nav-commenters.gif)
at December 1, 2014 7:19 AM
It's still almost $3/gal here.
Posted by: ghostsniper at December 1, 2014 9:25 AM
Spartanburg SC gas is $2.14 at Costco, $2.31 at several other stations.
Posted by: Vermont Woodchuck at December 1, 2014 9:53 AM
A fellow who writes for the WSJ could take the trouble to look deeper into the past, if didn't pick up on it the first time. The Saudi's have crashed oil before, and for the same reason. High prices were bringing on considerable exploration and drilling, in other words supply, and when enough capital and necks were in the noose they opened the valves wide. The lesson was learned and stuck for a long time. It probably would not work this time around in the same way, but the Saudi motives are more complicated now.
Posted by: james wilson at December 1, 2014 10:23 AM
When the Sauds crashed oil before, the Bakken Oil fields didn't exist and fracking wasn't a developed commerce. Times have changed. We produce more than they do now.
Posted by: Vermont Woodchuck at December 1, 2014 1:37 PM
Well, when it gets down to 29 cents a gallon, what it was selling for at the Shell station I worked at in 1972, I'll break out the champagne bottle. Moet Chandon 1972 vintage. Until then it's just bullshit.
Posted by: ghostsniper at December 1, 2014 1:51 PM
The profit point for fracking American oil runs between $50 and $69. The Saudis will not be able to keep it below $50 for very long, but investment will be affected for a while. Iran needs well above $100, and that is who the Saudis aim to destroy.
Posted by: james wilson at December 1, 2014 4:52 PM