Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Land Rover Discovery Sport Rattling / Knocking Sounds From Car Pillars - 25th Apr 18
China Takes the Long View on Gold-Silver... and So Should You - 25th Apr 18
Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In Gold Reserves - 24th Apr 18
Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - 24th Apr 18
CRYPTOCURRENCY MASTERCLASS #CRY90 - 24th Apr 18
UK Gambling Statistics - What the Numbers Say - 24th Apr 18
Chaos Capitalists Short Countries - How Chanos Got China Wrong - 24th Apr
Artificial Intelligence Defines the Political News Narrative - 24th Apr 18
Stock Market "Oops, They Did It Again" - 24th Apr 18
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

Congress Eliminates U.S. Export Oil Ban

Commodities / Crude Oil Dec 23, 2015 - 02:01 PM GMT

By: BATR

Commodities

If you want to know how the “so called” Free Trade exponents think about exports, just analyze the impact and actual beneficiaries of the US House passes bill to lift 40-year ban on oil exports.

“The crude export restrictions were introduced in the US in 1975 in the middle of the energy crisis. They followed OPEC’s oil embargo of the US and other countries backing Israel during the Arab–Israeli war of 1973. In the face of embargo-related high oil prices, Washington eased the limits on oil imports and ordered an export ban.”


The reporting in The Hill demonstrates the corporatist influence on pushing the Big Oil interest to a House of economic ill-informed Representatives. In The tragedy of the crude oil export ban, you read an absurd argument intended to dupe the public into thinking that the oil conglomerates will reduce the pump cost of gasoline.

“The export ban was intended, above all, to protect our domestic oil supplies in an era of oil scarcity and help keep gasoline prices low. Four decades later, a wide body of research indicates that eliminating the ban now in an era of oil abundance would stabilize and even lower the price of gasoline at the pump for millions of Americans. This is because domestic gasoline prices are based on global oil prices.  Lifting the ban would increase the global oil supply and lower global oil prices – which would lead to savings for U.S. consumers at the pump. According to scholars at the Columbia University Center on Global Energy Policy – who both happen to be former advisers to President Obama and Secretary Clinton – lifting the ban would cause prices at the gasoline pump to fall, potentially as much as 12 cents per gallon.”

The two primary reasons for the drop in the global price of oil are political and economic. 

  1. Russian oil exports to the EU need to be slashed to punish Putin from defying The U.S. war intervention in the Middle East. The lifting of Iranian sanctions requires a lower oil price to place roadblock on their economic recovery.
  2. OPEC’s strategy to bankrupt North America fracking ventures with below cost production prices is working. The ability of the U.S. to maintain their recent production levels will fall dramatically with a sinking barrel price.

For the next gem of Wall Street disinformation, the dependable Newsweek rag pushes the need to put a lid on keeping our domestic crude in the ground for future national use. The article Big Oil Companies Can’t Wait For Repeal of U.S. Export Ban, uses tortured logic to convince their gullible readers that exporting American oil will reverse the crash in oil prices.

“This autumn, Goldman Sachs sounded a warning about the dangers of the nation’s high inventories, saying if its “surplus breaches logistical and storage capacity,” there could be a collapse in prices to the cost of production. It added, “The potential for oil prices to fall to such levels, which we estimate near $20 a barrel, is becoming greater as storage continues to fill.”

Common sense states clearly that the more oil available worldwide, in a sharply retracting demand marketplace will keep the barrel price low. So why should the U.S. sell its remaining resources into a global collapsing economy? Companies rarely consider the national interest, especially the current reincarnations of Standard Oil.

The following statement frames the significance of conserving the use of such a valuable resource, How Important Was Oil in World War II? “Now, it cannot be stated too forcefully, American oil, which amounted in all to 6 billion barrels, out of a total of 7 billion barrels consumed by the Allies for the period of World War Two, brought victory! “

Real smart, sell American oil at rock bottom prices to the EU so that the Russians lose their market share. Looks like a formula that Putin will be exporting Russian oil to the U.S. when the fracking wells go dry.

As for OPEC reliability, Venezuela and Saudi exports to the U.S. are falling. Likewise, Mexico is also declining. Canada is the exception. Rejecting the Keystone Pipeline has not stopped the flow to the lower 48. Review the stats from the U.S Energy Information Administration for a complete list.   

The Oil Roustabout Economy is becoming even more bizarre. The conclusion in the essay, The Foolish Exporting Natural Gas Policy, similarly applies to Oil.

“Pursuing and encouraging a LNG sell abroad strategy just rewards the gas drillers and exporters. The very real risks and environmental fallout from unsafe fracking methods are a bad trade off when the natural gas ultimately goes for foreign use.”

Special disgust deserves to be leveled upon the Republican captives of Big Oil, who voted to lift the export ban. The naïve global warming cultists believe that the Paris concord will replace the carbon-based fuel economy with some formula of renewable composition of energy.

Get real. People won’t be trading in their cars for bicycles any day soon. Tesla sports cars need to be juiced up with an electric jump start. Good luck on that one. The trusted Ford F-150 will be trucking around long after the lithium-Ion batteries fail to hold a charge, in the hybrid world of green orthodoxy.

With the clout that Big Oil demonstrated in the Congressional vote, the days of black gold will be pumping for a long time to come. Regretfully, the outflow from domestic wells may run dry sooner than prudent extraction dictates.

It seems that the mindset of the Saudi oil barons has affected the greed genes of the current J.R. Ewing’s. Alas, the John Ross’ of the clan cannot hold a candle to their patriarch daddy, Jock.

The same can be said about the shortsighted corporate czars that want to cooperate with the lunatics in foreign policy corridors of Washington in their destructive attempt to smash the Russian economy. In the end what America will get is one more step closer to her own bankruptcy and a barrel of dry sand clogging up the gears of commerce.

James Hall

Source: http://www.batr.org/corporatocracy/122315.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2015 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules