Dear Friends,
It seems to me, if I owned a stripper well, I would “buy” oil at negative 40 bucks a barrel, and pump it into the ground. As long as the price of oil is negative I would add to my stockpile of oil and money. Why this is not done is beyond me… unless it is being done. The US government should be adding to the oil reserve as fast as it can as well. Imagine being paid to take and store oil? When the price goes positive, you can pump it out and sell it back to the people who paid you to take it! That is how absurd the markets have become. All because of a confluence of events. The Saudis and Russians have declared war on US shale producers. That this Kung Flu has broken out at the same time, deflating demand, has only exacerbated the war on US producers.
Make no mistake, if the US shale oil producers are indeed taken out by this oil glut, the price will rapidly return to 100 plus dollars a barrel, and five dollar a gallon gas. That is the goal of our “allies” the Saudis. The “war” with the Russians is only kabuki theater to cover the open attack on US producers. They are hurting at the price collapse, but have put up enough largess to weather it, or so they think. One factor in their favor is that shale oil production is relatively new, and as such, is leveraged more than it will be, once it becomes a more mature technology. That makes the window of vulnerability small and closing. Maybe that is why they are acting now. If they can get the US to become dependent on foreign oil again… they will have solved all the world’s problems overnight.
How does it get rid of the world’s problems overnight… do you ask? Because US energy independence has created huge new tensions in the balance of power in the world. The US needn’t be involved and the US population has no interest in being the world’s policeman. To secure both the US access to energy as well as protect from advancing Communism, the US was willing to foot the bill to be the world’s policeman, trade at a deficit to the world, spend thousands of lives and over a decade in a middle Eastern manure pit, support dictators across the planet and participate in the managed destruction of the US itself. By making the US energy dependent again, the US will have to reengage… and all that wonderful stuff can return.
That the US government has not stopped the flow of oil into the US to counter the dumping, is amazing, but not so much if you think about how many congresspeople the Saudi’s own. The managed decline of America could not happen unless the elite were in on it and getting rich from it. They wouldn’t participate if they were not getting something from it. Power and money usually suit the bill for treason. So if the Saudi’s want to flood the US with negatively priced oil to bankrupt US shale oil producers, I say, “buy” as much as they want to dump, and pump it into the ground. Perhaps put enough Saudi crude into the ground so Ranger Texas can become a major producer once again, after this emergency is over. If they want to dump, let’s “buy” it until the Saudi’s are broke.
Which brings us to the elephant in the room… the open warfare against the US. As I mentioned earlier, I believe it is to get the US to reengage with the world. China’s very existence depends on it and the Middle East will return to the vacant starving hell hole it once was without the US. No one else is capable of protecting the world’s sea lanes, and no one else would protect it for the world’s interests, and not turn it to their own advantage. The world without an engaged US is a return to the robber baron days. Each nation procuring and protecting it’s access to natural resources. Which is why China is so heavily engaged in Africa. That investment will be worthless if the US disengages though… how do they get the yellow cake, diamonds and chromium across thousands of miles of pirate infested seas?
Sincerely,
John Pepin
