If the USA increases production to take away market share from Saudi Arabia; the Saudi oil fields will return to maximum production to lower the price of oil again.
The Saudis can do that because the overhead to their oil fields is very low in comparison to the USA oil fields. The overhead of the much beloved $100.00 a barrel oil return is high. The petroleum industry in the USA leveraged their future earnings for a fast return as 90% of inflated values such as $100.00 per barrel. That is exactly why they failed financially and are in bankruptcy.
The Saudis are not about to allow the USA to take their market share and Donald Trump's focus on destroying more American land with hydraulic fracturing is wrong in many ways, including financial.
It is foolish to base an economy on oil and gas. It's desire in future economies will become more and more diminished over time as consumers turn to alternatives.
Oil is not going anywhere. It is not liquidity anymore. The investments currently exceed any return on the wells. It is a losing scheme.
September 15, 2016
By Jim Tankersley
...Trump's economic team (click here) estimated that the complete tax plan, combined with rollbacks to some federal regulations and new initiatives to open up more public and private lands for oil and gas drilling, would deliver 3.5 percent growth per year for the next decade and produce 25 million new jobs....
There is more than ample amounts of oil and gas already drilled and in storage bunkers such as the one in California that chronically leaks. The foreign suppliers are not interested in another price crisis for oil and gas and that is exactly what will occur if the USA increases its market share. Such actions on the part of the USA does not create income to the USA Treasury, quite the opposite. Oil prices will again plummet and decrease the income to the US Treasury because the oil and gas companies will have over extended its credit. Companies will sustain losses and the taxes to the USA will be reduced and not increased in any scheme no matter to what extent they want to fudge the numbers.
The name of this scheme is "Bail out the Petroleum Industry."
The Saudis can do that because the overhead to their oil fields is very low in comparison to the USA oil fields. The overhead of the much beloved $100.00 a barrel oil return is high. The petroleum industry in the USA leveraged their future earnings for a fast return as 90% of inflated values such as $100.00 per barrel. That is exactly why they failed financially and are in bankruptcy.
The Saudis are not about to allow the USA to take their market share and Donald Trump's focus on destroying more American land with hydraulic fracturing is wrong in many ways, including financial.It is foolish to base an economy on oil and gas. It's desire in future economies will become more and more diminished over time as consumers turn to alternatives.
Oil is not going anywhere. It is not liquidity anymore. The investments currently exceed any return on the wells. It is a losing scheme.
September 15, 2016
By Jim Tankersley
...Trump's economic team (click here) estimated that the complete tax plan, combined with rollbacks to some federal regulations and new initiatives to open up more public and private lands for oil and gas drilling, would deliver 3.5 percent growth per year for the next decade and produce 25 million new jobs....
There is more than ample amounts of oil and gas already drilled and in storage bunkers such as the one in California that chronically leaks. The foreign suppliers are not interested in another price crisis for oil and gas and that is exactly what will occur if the USA increases its market share. Such actions on the part of the USA does not create income to the USA Treasury, quite the opposite. Oil prices will again plummet and decrease the income to the US Treasury because the oil and gas companies will have over extended its credit. Companies will sustain losses and the taxes to the USA will be reduced and not increased in any scheme no matter to what extent they want to fudge the numbers.
The name of this scheme is "Bail out the Petroleum Industry."
