OPEC is meeting today, and oil prices have fallen another 2% per barrel in this morning's global trading. So while it ain't over 'til it's over, of course, it still looks very much to me like they won't be able to come to an agreement to reduce production levels. See As OPEC Members Meet, Outcome Remains Unclear.
Thanks to the fracking revolution in the U.S., OPEC's reign on price fixing is coming to an end. And let's be thankful that free markets led by American ingenuity and entrepreneurship are stronger than than the monopolistic and totalitarian cartels. The laws of supply and demand will work when given a chance to do so.
Now we need the Keystone Pipeline's approval, the green light to export U.S. oil and the bullying behaviors of Russia, Iran and Venezuela to take a back seat to our own national security, financial well being and private sector leadership. And lest we forget, let's hope the U.S. government doesn't act 'stupid' and continue to support the bad guys at the expense of backing the private sector players and good guys in the U.S., Canada and Mexico.
Americans, let's be thankful that U.S. oil is pulverizing OPEC has the good news story:
"Americans will give thanks for just about everything this weekend, and most of all for one another.
I’ll save a toast for George Mitchell, the man who more than any other is enabling America to wipe the smirks off faces of a lot of people who have deserved it for an exceedingly long time.
Mitchell is the pioneer of hydraulic fracking, the breakthrough that has increased U.S. crude oil production by 80% since 2008. Combined with more conservation, and growth hiccups of varying severity in emerging economies, all that oil has pushed the price of crude down nearly 30% since July even as U.S. economic growth picks up.
That brings us to this week’s meeting of the Organization of the Petroleum Exporting Countries, and all the lousy regimes whose suffering it will lay bare.
Some numbers, first. In 2005, the U.S. produced about 5 million barrels of oil a day, in a market of about 90 million barrels a day then dominated by the 12 OPEC nations, including Saudi Arabia. And — this is the key part — even with all the growth in Asian nations and a recovery in the U.S., demand for oil is only growing about 1% a year.
As fracking made it possible to extract ever more oil from shale rock, (by 2020 the) estimate for shale alone is now up to 12.1 million barrels a day. . . .
This doesn’t even count the . . . Keystone XL pipeline (which may carry) . . . another 4 million or so barrels by then, up from 2 million last year, the Canadian Energy Research Institute says.
So you have a market with probably 20% to 25% more supply than in 2005 and about 15% more demand — if that. . . . Thankfully, the highest-cost, smallest, most-vulnerable world producers are exactly the jerks who have made U.S foreign policy such a chore.
No such discussion would be complete without mentioning Vladimir Putin’s Russia, which Sen. John McCain has aptly described as a gas station masquerading as a superpower.
Russia needs $101 crude to balance its budget, not the $79 Brent price on Tuesday, Goldman says. Russia’s finance minister recently said the crude crash is costing them $90 billion to $100 billion a year, and Western sanctions over Putin’s Ukraine adventurism cost another $40 billion.
No wonder Russia’s economy is stalled, with the ruble down nearly 40% this year."
OPEC's state of disarray is indeed a blessing this Thanksgiving, thanks to American entrepreneurialism.
Now if we can just keep our U.S. government 'leaders' from messing things up for us, which they are prone to do.
For today, drive safely and inexpensively. Low gas prices and an abundant energy supply are here to stay. They have been a long time coming.
Maybe by next Thanksgiving, and for a long time thereafter, we'll see that prices at the pump have fallen to ~$2 per gallon or below.
And that would mean more money in our pockets instead of OPEC's and Putin's.
Isn't that another Thanksgiving blessing and a happy thought for Christmas shoppers?
That's my take.