The logic of the situation...
Isn't logic that's driven by free market functions... but by what you always see when there are monopolists enabled in destroying free markets by altering free market underpinnings...
A free market requires "no fraud, no monopoly, and no obstacles to participation"...
But the world oil market is all about fraud ( just look at compliance with OPEC production quotas, but not seeing that as a limit ?), all about monopoly as assumed in my prior post... and all about imposing obstacles to others market participation... as I outlined in my prior post.
So, given the market reality... which is "not a free market"... what does drive the market ?
There's a conflict in interest that occurs between $ and power... and between $ and control...
If there weren't "power and control" issues involved... and it was all about the money ?
Then, what would make sense for the lowest cost producers ? Saudi's costs used to be under $10 a barrel... are probably getting closer to $18 to $25 now as: the Gwahar Field is now becoming depleted, and now exploits American technology to extend field life... the way Texas did when the easy oil ran out. That technology, now, can double the potential for extraction... but does so at higher cost over time, and it will remain a closely guarded secret... what the remaining potential is... how much they can pump flat our without doing real damage to the future potential... and how much theater is involved in sustaining the perception that Saudi can coat the world in an endless sea of cheap oil ? Gamesmanship ? You need to apply game theory to the games being played...
What would make the most financial sense, then... would be to allow the highest cost producers to set the price... so the lowest cost producers would extend the life of their resource the most, at the highest market price... as that is set by the highest cost producers.
But, the problem is... there really isn't any shortage of oil. There's only a shortage of cheap oil when the price is set at a particular price point. American frackers have disabused the market of the bogus "peak oil" concept... making it clear enough that the only "peak" involved... is a peak in prices, not supply. And, if you doubt that... note the same analysis applies to Canadian "oil sands"... which occupy the next rung higher on the price ladder... with a large enough reserve even to begin competing with coal... at the right price. But, then... why not just use coal ? There's enough coal to run the world for a very long time at low cost... even without imposing on us the need for all the drama inherent in the oil markets ? The politics of coal... of course... have nothing to do with the fiction that CO2 drives climate change... and everything to do with the geopolitics of control over the global energy markets... including controlling the diversions of profits to the "preferred" participants... who are cooperating in the political game of control... by helping to impose control.
American energy independence... disrupts the game. Not only does it put the lie to the price manipulations of low cost producers restricting deliveries to drive prices well above those that high cost producers can easily make good money from... it also disrupts the various schemes for imposing control... whether on the regional level... as you see Russia trying to impose on Europe (and on China, although no one is talking about that right now)... or on the "bigger picture" global level... in which the globallist left seeks to enable themselves in imposing world domination by structuring the "allowed" flows of $ in energy markets... to those channels they control. So, no coal allowed... but someone is going to be making a WHOLE lot of money from the totally fictional market trading in carbon credits ? LOL!!! Who is going to be the Super OPEC of the world's energy... controlling the global energy distribution with a tax... when you need a carbon credit to allow you buy or sell ?
Its still useful to keep an eye on the big picture view of things... when the noise in the mud pit where the gladiators are slogging it out... gets loud enough to distract from it. Because the distraction, created intentionally or not... is likely to be exploited... |
