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Old 12-19-2014, 10:54 AM
 
7,281 posts, read 8,875,060 times
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http://rt.com/business/215235-branso...il-renewables/

Renewable sources probably had very little to do with it, fracking, yes.
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Old 12-19-2014, 11:18 AM
 
Location: Londonderry, NH
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Of course they did. They will cut their profit to maintain their control of world wide prices by regulating supply. The cartel is ruthless, not stupid.
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Old 12-19-2014, 12:03 PM
 
15,539 posts, read 13,532,447 times
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Renewables have nothing to do with it. They did this due to a combination of reasons, so they determined the time was now to do it.

1. US oil producing ramped up, so Saudi wants to not only drive this to being unprofitable, also send a warning not to invest in it again by showing what Saudi can do.

2. Undermining Iran, in which Iran all of a sudden became a key player in Iraq and the region, going against the ISIS, so Saudi has even discounted oil more going to Asia to undercut Iran's finances, thus its means to carry out operations against the ISIS, and its ability to assist Iraq in general.

The byproduct of this, which is still in debate if done on purpose (no proof on purpose), and if was would have consequences, is the impact on Russia.
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Old 12-19-2014, 01:40 PM
 
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Moderator: There is a political component to this I didn't foresee so if needed, this could be moved to another forum.

_________________________

The point about Russia makes sense. Russia is getting squeezed and we'll probably see some form of regime change there in the not so distant future. They can only hold out so long as their primary economic trade goes down the tubes. The Saudi's need help on the security end to the payment for that was to not raise prices.
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Old 12-19-2014, 03:49 PM
 
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You forgot Greed, no one wants to voluntarily stop or slow production, Granted now they need to pump twice as much to make the same amount of sales.

And also potentially against Venezuela, which will probably have difficulties before Russia (IMHO).
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Old 12-19-2014, 05:41 PM
 
Location: Central CT, sometimes NH.
3,475 posts, read 5,146,483 times
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It's a calculated move to undermine new start ups which depend on higher oil prices. The middle east can afford to take a hit and wait it out because they will just let their people suffer. That kind of suffering wouldn't be tolerated in the US. US oil companies will just cap the wells and buy it cheaper elsewhere. Some companies will file for bankruptcy, and/or move on to something else.
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Old 12-19-2014, 06:01 PM
 
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And the minute the price of oil goes back, someone will uncap and continue on as usual.
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Old 12-20-2014, 02:07 PM
 
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If the Saudis et al, were a bit clever, just by making announcements they can direct the price -- and profit more from that than the actual sale the Oil.

Say, for example -- they take Short Positions (where profit is made on reducing price) and then announce -- as they have -- that they are maintaining production. Prices go down and they profit from the Futures position. Making more money than they lose in lower sales price of the Real Oil.

Then after down for a bit -- take Long Positions (where profit is made on increasing price) and then announce they are cutting production. Prices go flying back up and they profit from the Futures position. Again making more money than they lose in the lower volume of sales of the Real Oil.

By having the control and a priori knowledge of when and how much the prices will go up and down -- they can actually control and profit from our behavior without regard to the actual volume or price of Oil, itself.
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Old 12-20-2014, 04:49 PM
 
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The Saudis are scared of external threats, they need the support of the US like never before. They aren't about too feed poison to the guard dog.
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Old 12-23-2014, 09:54 PM
 
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Phillip T - How do you know that they don't do that?

Wouldn't be the first time someone did insider trading.
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