The big news recently is that oil prices have continued to fall! Great! But, why? Oil, if you believe the press and all the alarmists, is running out! It is scarce! Apparantly not so much.
When the US started getting more oil and gas production (Marcella Shell among other initiatives) people seemed to breathe a sigh of relief. Unless of course, by people, you mean the Saudi and other OPEC producing countries. If oil was as scarce in their wells as we are led to believe (the reason they were charging so much for it), then why all of a sudden is Saudi Arabia opening the flood gates…. Is it because they love the US and want us to enjoy low gas prices? Maybe they want to sell more since the price is down?
No, I don’t think so. As in most monopoly and oligopoly situations they are trying to hold on to their power. They are using their established wells, pipelines and marketing infrastructure to drive the price of oil down to damage or severely limit the US drilling initiative and its new technologies ability to expand or stay in the marketplace. I am sure after this new competition is gone or handicapped we will see oil again well over $100 a barrel.