Search This Blog

Thursday, December 4, 2014

Nailed it: The New Economist Cover Says It All

econ cover   

Last week, OPEC, the 12-nation cartel that includes oil-exporting nations including Saudi Arabia, Venezuela, and Iran, voted not to cut oil production, which caused oil prices to tank.

And while the sluggish global economy is partially to blame for the dropping oil prices, there's a bigger story here.

Following the shale revolution, the US is now a competitor in the global oil market. US production has significantly increased over the past few years. 

Additionally, the US is on its way to energy independence: Americans are increasingly consuming oil that was produced in the US (meaning the US doesn't need to import as much).

Screen Shot 2014 12 04 at 9.51.51 AM

As a result, some believe that OPEC's recent decision might be viewed as a deliberate strategy to fight off the competition from the US shale oil industry — and to maintain its share of the US market. Prices below $100 a barrel could hurt some of the higher-cost US shale producers.

Additionally, OPEC's decision suggests that the group isn't as dominant of a player in the oil market as it used to be after the surge in US oil production, according to a Goldman Sachs research note.

"For now, my conclusion is that the US oil industry intends to play the Saudis' game of chicken," Ed Yardeni wrote on Wednesday.

"The contest between the shalemen and the sheikhs has tipped the world from a shortage of oil to a surplus," writes The Economist. "Even if the 3m extra b/d that the United States now pumps out is a tiny fraction of the 90m the world consumes, America’s shale is a genuine rival to Saudi Arabia as the world’s marginal producer. "

In other words, it's US shale versus OPEC*.
And things don't look like they're going to calm down any time soon.

*The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).



1915 Armenian Genocide 21st-century Christian martyrs‎ africa al assad Al Qaeda albania anti-Morsi protests Apostles Arab Christian Arab-Orthodox Archimandrite Tikhon Shevkunov army Asia Australia bank BBC Belarusian Orthodox Church Bethlehem bible Bible movies bible translations bulgaria Bulgarian Orthodox Church Byzantine byzantine music C.I.A. Cairo China Christian Armenians christianity christians christmas Christmas Traditions Christmas tree church Conspiracy Constantinople coptic church copts cyprus daily news Documentary Easter economy Ecumenical Patriarch Ecumenical Patriarch Bartholomew I Ecumenical Patriarchate of Constantinople egypt egypt pope elder Elder Ephraim of Vatopaidi elder joseph of vatopaidi elder Paisios Elder Porphyrios english subtitles Epiphany europe food Fr Seraphim Rose france FREE books FREE Greetings Cards fyrmacedonia Georgian Orthodox Church germany greece greek greek food greek music Greek Orthodox Church Greek Orthodox Easter greek orthodoxy health and medicine Holy Fathers Holy Scripture Holy Tradition icon Internet Interview iran islam islamist israel Italy jerusalem Jesus Christ jews jihad killed libya mafia Middle East Miraculous Icon monastery money mother of god mount athos Mount Sinai Movie Trailers music muslim muslims news orthodox church Orthodox Church in America pakistan Palestine patristic tradition photo photos picture politics pope Prophecy protests quotes recipes religion romania romanian orthodox church Russia Russian Orthodox Church saint Saints science Shroud of Turin Son of God spy St Nicholas of Myra syria The Mount Athos Food Evolution theotokos travel turkey tv UK Ukraine Ukrainian Orthodox Church usa Vatican vatopaidi video war Watch FREE full movie world
Related Posts Plugin for WordPress, Blogger...