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Peak profits from oil. They're desperately trying to sell as much as possible before renwewables eat their lunch. This is why the free market cannot solve globa
by makomk 10y ago
Peak profits from oil. They're desperately trying to sell as much as possible before renwewables eat their lunch. This is why the free market cannot solve global warming by itself - we'd need to leave lots of oil in the ground and countries like Saudi Arabia have a huge amount of latitude to drop prices in order to ensure this doesn't happen. It's not enough to just be cheaper than oil, you need to be cheaper than anyone can afford to drop the price they sell oil at to undercut you.
- velodrome 10y agoThey're desperately trying to sell as much as possible before renwewables eat their lunch. This is not the case. It may be in the next 10-20 years but the real reason is due to fracking. The fact is that the US / Canada has added additional supply to the market and no longer imports as much oil from OPEC. http://www.drillingcontractor.org/wp-content/uploads/2012/04/web_Graph1.jpg http://www.drillingcontractor.org/wp-content/uploads/2012/04...
- lern_too_spel 10y agomakomk is right. US crude production is dropping since Saudi Arabia increased supply to drop oil prices below what the other suppliers can support. https://ycharts.com/indicators/us_crude_oil_field_production https://ycharts.com/indicators/us_crude_oil_field_production
- velodrome 10y agoUS crude is sold at market prices and is NOT specifically dependent on Saudi Arabia supply increases (e.g. another oil producer could cut production and zero out that increase). Also, the price fell long BEFORE Saudi Arabia increased production (about a year). This was due to excess supply and why Saudi Arabia tried to cut production in 2014. http://www.artberman.com/wp-content/uploads/Chart_Market-Balance-FEB-2016-1.jpg http://www.artberman.com/wp-content/uploads/Chart_Market-Bal... https://ycharts.com/indicators/saudi_arabia_crude_oil_production https://ycharts.com/indicators/saudi_arabia_crude_oil_produc...
- lern_too_spel 10y agoYou have it exactly backwards. Saudi Arabia removed production caps in 2014. Shale fields cannot produce oil profitably at the resulting prices and are shutting down. http://mobile.reuters.com/article/idUSKCN0JA0O320141128 http://mobile.reuters.com/article/idUSKCN0JA0O320141128