Oil prices continue to fall as OPEC abandons price fixing

[Islandman]

policies...for now.

Lets see what happens when Iran steps up production.

http://www.reuters.com/article/us-op...2xyGQk2T77B.97

[Jangle]

Is Obama a chess master? Who stands to benefit in the long run? Where was oil prices or what was the US oil production output 3 years ago?

[Islandman]

Well everyone except the oil producing countries and regions benefit. I would say that is far more people benefitting than suffering.

Up until about a year ago US oil production was on a tear, mainly due to massive shale oil discoveries and the new technologies to productively extract it. Recently it has started to fall as lower prices take their toll.

I give the Obama administration credit for two main things: First and most importantly staying out of the way and allowing the US oil boom to play out without much in the way of govt restrictions, and despite much criticism from those on the left. While there is certainly some environmental impact from these forms of extraction, in my view the far bigger threat to long term stability is dependence on OPEC and Russian oil.

Secondly,the Iran sanctions agreement will make a difference to supply in the years ahead.

At some point global demand will rise as the emerging economies go back into growth mode and oil prices will head back up, but I think there is more resistance against very high prices in "normal" times (ie outside of war, major terrorist event, etc) . This is partly because there are more sources of long term supply and also because the cost of alternative sources of energy will continue falling. I don't see oil prices getting back to $100 a barrel any time soon unless there is a major disruption in distribution.

It will be interesting to see how World politics will change as the Middle East becomes less and less influential in the world energy markets.

[Rockman]

Islandman,would you agree that lower oil cost deters exploration of.. and investment in alternative energy source,and if so,what is the role being played by middle eastern countries?

[Mosiah]

(Note to self: put Tesla order on hold for 6 months.)

[Rockman]

Dwl.

[Islandman]

Yes I would think that it deters new investments in alternative energy particularly in the US, but I believe that the global research and development which has already been funded (govt and private) will continue to improve the various technologies, unless this sharp downturn in price really is here to stay (which I doubt)

I think for right now the Middle Eastern countries are more focused killing energy production from unconventional oil and gas deposits like shale and oil sands. That is the more immediate threat to them , but even that seems to be taking a lot more time and effort, and cost, than they thought it would.

Fossil fuels will be around for a while but I feel that the cost of solar especially will keep falling and make it more and more viable. If only they could find a way to get rid of those bulky, unattractive panels with some attractive and efficient alternative it would go a far way especially in the residential energy market.

I hope something like these transparent panels will become commerically viable before too long.

http://news.nationalgeographic.com/e...er-generators/

[Mosiah]

Fossil fuels can't compete with the renewable alternatives when it comes to climate change. So, hopefully the R&D continues.

[Rockman]

Thanks Islandman.

[HL]

Does cost of food, gas and transportation costs go down in Jamaica with the fall in oil price?

Does the bus or taxi fair goes down from say: Mandeville to Kingstong?

[Mosiah]

Yes, gas certainly goes down and sometimes some other consumer products.

Why yuh aks?

[HL]

..........'specially curious about local transportation costs.

I know that with every increase in gas prices...bus and taxi fair naturally increase.

Curious to know if the inverse is true?

[Mosiah]

I believe it follows what is obtained in the US. So, I don't believe bus and taxi fares go down when oil prices fall.

[HL]

mek sense.....

[Islandman]

It does happen but remember we have the constant slow motion devaluation of the JA dollar (just broke the $120 to US$1 barrier) , so the JA$ price of oil-related products will not fall in the same proportion as in places with a stable currency, and may not fall much if at all at times.

I wonder how the T&T economy is coping with these falling prices? Must be a severe blow.