Tucker Carlson of Fox News recently interviewed former Secretary of Energy Rick Perry regarding the depressed energy market in the US.
Perry, also a former governor of Texas, a big oil state, warns that a weak energy sector in the US economy will make the US vulnerable and dependent on countries like Saudi Arabia for our energy. Foreign oil producers could decide what US citizens pay for energy. Do we want that again?
The US became an energy-independent nation because of the “fracking” method of extracting oil out of shale and sand. Many states like South Dakota and Texas are enjoying the benefits of a strong energy economy and thereby the whole nation, except for California, benefitted.
All of that changed when Russia and Saudi Arabia started an oil price war earlier in March, flooding the open market with cheap oil, exceeding demand and driving down the price of oil under $30 to even as low as $19 dollars a barrel.
American independent oil producers
These low prices threaten many independent oil companies, the backbone of the fracking revolution. Without their presence in the market, we would be at the mercy of “big oil,” companies rich enough to absorb the losses of not only the Saudi-Russian price war but also the decreasing domestic demand due to coronavirus lockdown.
People are doing a lot less driving as the “shelter in place” to slow the coronavirus. No driving equals less demand for gas. Less demand for gas equals plunging prices.
Many independent oil companies need to make a certain amount per barrel to pay their bills and make a profit.
According to oilprice.com: Breakeven prices for U.S. shale basins range between $39 and $48 per barrel, according to data compiled by Reuters. Meanwhile, West Texas Intermediate (WIT) is trading below $25 a barrel and has been for over a week now.
US companies that survived the low prices in 2014 and 2015 are lean and frugal, and some 50% of them could breakeven at $30 per barrel but the price has dropped below $20 per barrel, now. Perry says: “We are on the verge of a massive collapse.” At these unsustainably low prices, companies will stop production as it will no longer be economically sound to continue to drill.
There is also a storage problem. The oil glut is filling all the storage and when the storage is full, prices could drop even more. Again according to oilprice.com:
Meanwhile, pipeline operators in Texas are asking producers to stop pumping oil because storage space is filling up. The storage problem is becoming critical on a global scale. According to the chief analyst of data analytics firm Kayrros, if storage continues to fill up, oil prices could fall close to zero.
Forbes ran an article back in early March explaining how Russia is manipulating the market to crush US shale oil production. The author points to US sanctions as the reason Russia wants to retaliate. You can read the article here.
Lower prices always seem good to the consumer, and we enjoy getting a bargain at the pump, but US energy producers need to make money for the US to remain independent and that is critical to our economy and our national security.
Watch:
186 Responses
أخبار المملكةأخبار محليةأخبار السعوديةمحلياتأخبار أخبار أخبار المملكة العربية السعوديةالسعوديةالمملكة العربية السعودية
Hi! This is my first visit to your blog! We are a team of volunteers and starting a new project in a community in the same niche. Your blog provided us beneficial information to work on. You have done a extraordinary job!
I enjoy what you guys are up too. This type of clever work and exposure! Keep up the superb works guys I’ve added you guys to my blogroll.
Thanks for one’s marvelous posting! I truly enjoyed reading it, you will be a great author.I will be sure to bookmark your blog and will often come back someday. I want to encourage continue your great writing, have a nice evening!
Howdy! I know this is kinda off topic but I was wondering which blog platform are you using for this site? I’m getting sick and tired of WordPress because I’ve had problems with hackers and I’m looking at options for another platform. I would be fantastic if you could point me in the direction of a good platform.
of course like your web site but you need to check the spelling on quite a few of your posts. A number of them are rife with spelling issues and I find it very bothersome to tell the truth nevertheless I will definitely come back again.
Hello just wanted to give you a quick heads up. The words in your content seem to be running off the screen in Chrome. I’m not sure if this is a formatting issue or something to do with internet browser compatibility but I figured I’d post to let you know. The design and style look great though! Hope you get the problem solved soon. Many thanks
131680 388902I likewise conceive thus, perfectly written post! . 373156
Magnificent web site. A lot of useful information here. I am sending it to a few pals ans additionally sharing in delicious. And obviously, thank you in your effort!
magnificent issues altogether, you just received a logo new reader. What might you suggest in regards to your submit that you simply made some days in the past? Any positive?
I’m really inspired along with your writing skills and also with the layout for your weblog. Is that this a paid theme or did you modify it yourself? Either way stay up the nice quality writing, its uncommon to look a great blog like this one nowadays..
Hello, Neat post. There’s a problem along with your web site in web explorer, may test this IE still is the marketplace leader and a good portion of other people will omit your fantastic writing due to this problem.
I used to be very happy to seek out this web-site.I wished to thanks to your time for this glorious read!! I definitely enjoying every little little bit of it and I have you bookmarked to take a look at new stuff you blog post.
909371 480966I dugg some of you post as I thought they were quite beneficial invaluable 978000
Lovely website! I am loving it!! Will be back later to read some more. I am taking your feeds also.
Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You clearly know what youre talking about, why waste your intelligence on just posting videos to your blog when you could be giving us something informative to read?
Appreciating the dedication you put into your blog and detailed information you present. It’s great to come across a blog every once in a while that isn’t the same old rehashed information. Fantastic read! I’ve bookmarked your site and I’m including your RSS feeds to my Google account.
Good day! I know this is kinda off topic however , I’d figured I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog article or vice-versa? My blog goes over a lot of the same topics as yours and I feel we could greatly benefit from each other. If you might be interested feel free to shoot me an email. I look forward to hearing from you! Great blog by the way!
It is really a great and useful piece of information. Im happy that you shared this helpful information with us. Please keep us up to date like this. Thanks for sharing.
Hey very cool blog!! Man .. Beautiful .. Amazing .. I will bookmark your website and take the feeds alsoI am happy to find so many useful information here in the post, we need work out more strategies in this regard, thanks for sharing. . . . . .
Hey There. I found your blog using msn. This is an extremely well written article. Ill be sure to bookmark it and come back to read more of your useful info. Thanks for the post. Ill definitely return.
เว็บพนัน
Thanks for the sensible critique. Me and my neighbor were just preparing to do a little research on this. We got a grab a book from our area library but I think I learned more from this post. I’m very glad to see such great info being shared freely out there.
I used to be very happy to find this web-site.I wanted to thanks on your time for this glorious read!! I positively having fun with each little little bit of it and I’ve you bookmarked to take a look at new stuff you blog post.
I’m really enjoying the design and layout of your site. It’s a very easy on the eyes which makes it much more pleasant for me to come here and visit more often. Did you hire out a designer to create your theme? Superb work!
This is really interesting, You’re a very skilled blogger. I have joined your feed and look forward to seeking more of your fantastic post. Also, I’ve shared your site in my social networks!
Whats up very cool site!! Guy .. Excellent .. Wonderful .. I will bookmark your site and take the feeds alsoI’m glad to find a lot of helpful info right here in the put up, we’d like develop extra strategies on this regard, thank you for sharing. . . . . .
I’ve been surfing online greater than three hours nowadays, yet I never discovered any interesting article like yours. Its pretty value enough for me. Personally, if all website owners and bloggers made just right content material as you probably did, the internet shall be a lot more useful than ever before.
I loved as much as you’ll receive carried out right here. The sketch is tasteful, your authored subject matter stylish. nonetheless, you command get got an impatience over that you wish be delivering the following. unwell unquestionably come further formerly again since exactly the same nearly very often inside case you shield this hike.
Super-Duper site! I am loving it!! Will be back later to read some more. I am bookmarking your feeds also.
Its in point of fact a great and helpful piece of info. Im glad that you shared this helpful info with us. Please keep us informed like this. Thanks for sharing.
I do not even know how I finished up right here, however I believed this post used to be good. I do not recognise who you are however definitely you’re going to a well-known blogger should you are not already 😉 Cheers!
Once I initially commented I clicked the -Notify me when new comments are added- checkbox and now every time a remark is added I get four emails with the identical comment. Is there any means you can remove me from that service? Thanks!
This really answered my downside, thanks!
Im not sure where you are getting your info, but good topic. I needs to spend some time learning more or understanding more. Thanks for excellent info I was looking for this information for my mission.
Its actually a nice and helpful piece of information. I am glad that you shared this useful info with us. Please keep us informed like this. Thanks for sharing.
632487 358244Yeah bookmaking this wasnt a speculative decision outstanding post! . 900576
fantastic post, very informative. I ponder why the other experts of this sector do not understand this. You should continue your writing. I’m sure, you’ve a huge readers’ base already!
Hello my loved one! I wish to say that this post is awesome, great written and include approximately all significant infos. I would like to look extra posts like this .
I am very happy to read this. This is the type of manual that needs to be given and not the random misinformation that is at the other blogs. Appreciate your sharing this greatest doc.