Commodity Trade Mantra

Posts Tagged ‘Oil Company’

OIL - The Untold History of Black Gold & How it began the Political Strategies of the West

The political strategy of the U.S. had to adapt to provide for the needs & wants of the American population. The ‘70s marked the turning point when the U.S. shifted from being an oil exporter to the world’s largest oil importer. The oil crisis of 1973 was the game changer that transformed the international political & financial system into the current system of petrodollars & oil wars.

Why We Need Oil Prices to Rise to $120 Per Barrel or More

When oil prices fall from $100 per barrel to $50, the incomes of a large share of people are adversely affected. This drop in income tends to radiate outward to the rest of the economy because each worker who is laid off is forced to purchase fewer discretionary items & is also less able to take on new debt, such as to buy a new car or house.

The $5 Trillion Oil Debt Bomb

Oil below US$60 is more than low enough to do an enormous amount of damage in financial markets. When many oil producers went for loans, the industry’s models showed oil prices between US$80 and US$150. So suddenly, there’s a bunch of debt out there that producers will not be able to pay back with the money they make at US$50 a barrel.

Ponzi Finance and $50 Oil - James Rickards

Oil below $50 is more than low enough to do an enormous amount of damage in financial markets. There are about $5.4 trillion dollars of costs incurred in the last five years for exploration drilling and infrastructure in the alternative (fracking) energy sector. It’s been largely financed with corporate and bank debt.

The Oil Pricing Mystery Has Been Solved

Plan for oil prices to stay lower for longer than you think. As with most busts, there has to be a washout phase filled with bankruptcies & lots of angst. We’re not there yet. Oil stocks are way down – But I expect we’ll see a significant oil company or two go under. The bust will take some time to play out — not weeks or months, but probably years.

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