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Old 12-04-2022, 04:07 PM   #21
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Yes, I had a bad feeling about dictating/cap for Russia. I believe in the long haul we will suffer the ill effects of that decision.
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Old 12-04-2022, 10:57 PM   #22
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So Russia, could now flood the oil market at $60 bbl , driving down the "real" price of oil. Sucking away the extra profits other oil companies are making.

This explains to me why OPEC has not increased it's production, no sense in selling oil cheap, as folks will buy it at higher prices once all the $60 oil is bought.
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Old 12-05-2022, 07:55 AM   #23
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Prices are drifting higher, as expected...I bet we're over $90/bbl soon enough.

I wouldn't be surprised if it goes back to over $100/bbl, at least until the next recession hits.
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Old 12-05-2022, 08:06 AM   #24
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So Russia, could now flood the oil market at $60 bbl , driving down the "real" price of oil. Sucking away the extra profits other oil companies are making.

This explains to me why OPEC has not increased it's production, no sense in selling oil cheap, as folks will buy it at higher prices once all the $60 oil is bought.
But if OPEC is up around $80 (higher now?), aren't there enough other markets for Russia to sell to? If OPEC is set at $80, Russia could sell to the open market @ $79. Who (other than EU, and now US?) wouldn't buy Russia's $79 oil (adjusted for any quality differences)?

As youbet said early on:
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Allocation of scarce resources other than by price has seldom been efficient or successful.
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Old 12-05-2022, 08:11 AM   #25
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But if OPEC is up around $80 (higher now?), aren't there enough other markets for Russia to sell to? If OPEC is set at $80, Russia could sell to the open market @ $79. Who (other than EU, and now US?) wouldn't buy Russia's $79 oil (adjusted for any quality differences)?

As youbet said early on:

-ERD50
Problem is they need tankers and insurance to deliver oil to buyers. EU and US allies are not providing that for deliveries priced higher than $60, per the cap. So Russia has to use a "shadow fleet" of aging tankers, which makes deliveries slow and inefficient.

Analysts are attributing today's modest price rise to loosening of covid restrictions in China
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Old 12-05-2022, 09:04 AM   #26
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One thing seems certain. If Putin sells at $60 - he's still making money - and a lot of it - which he seems to need right now. YMMV
He needs it. Keep in mind the Russian economy is the about the same size as Italy and South Korea. IOW, while it is a big economy on a world wide scale, it's not so big that the country can fight a sustained war with little consequences for the public.

Keep in mind that Russian has to spread its wealth over more people than countries with similar sized economies. Same size pie, but many more mouths to feed.

Russian - 146 million
Italy - 62 million
S. Korea- 51 million

One wonders if Russian is fighting for a Pyrrhic victory at best.
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Old 12-05-2022, 12:57 PM   #27
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As youbet said early on:
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Allocation of scarce resources other than by price has seldom been efficient or successful.

Take out the "seldom" and replace with "never" and you got it!
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Old 12-05-2022, 01:03 PM   #28
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Take out the "seldom" and replace with "never" and you got it!
Yep!
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Old 12-05-2022, 01:04 PM   #29
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He needs it. Keep in mind the Russian economy is the about the same size as Italy and South Korea. IOW, while it is a big economy on a world wide scale, it's not so big that the country can fight a sustained war with little consequences for the public.

Keep in mind that Russian has to spread its wealth over more people than countries with similar sized economies. Same size pie, but many more mouths to feed.

Russian - 146 million
Italy - 62 million
S. Korea- 51 million

One wonders if Russian is fighting for a Pyrrhic victory at best.
I've always assumed that there is a lot of ego and legacy enhancement involved but I'm no expert so YMMV.
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Old 12-05-2022, 04:01 PM   #30
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Take out the "seldom" and replace with "never" and you got it!
But, but, but - I've said many times on this forum "never say never"!


Hmmm, but this might be the exception?

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Old 12-05-2022, 04:21 PM   #31
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EU playing with Russian oil prices has some interesting effects, elsewhere.

https://gcaptain.com/russian-oil-san...r-old-tankers/

"LONDON, Dec 5 (Reuters) – The market for old oil tankers is booming, and it’s all down to efforts by Western nations to curb trade in Russian crude."
"In recent months, aging tankers have been sold by Greek and Norwegian owners for record prices to pop-up Middle Eastern and Asian buyers taking advantage of sky-high charter prices for vessels willing to ship Russian oil to India and China. "

"New ship owners willing to transport Russian oil are cashing in. “Ships earning $80,000 a day in the Mediterranean can make $130,000 a day if they carry Russian oil,” said one ship broker, who declined to be named as he was not authorized to speak to the media."

The EU has shot themselves in the foot and other vital parts by deciding to rely on Russian gas, do away with their Nuke plants, and proposing to dictate prices for russian oil. A cold winter is the reward. BTW Hungary is exempt from the $60 rule. Orban had made some smart moves early on.
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Old 12-05-2022, 05:23 PM   #32
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The EU has shot themselves in the foot and other vital parts by deciding to rely on Russian gas, do away with their Nuke plants, and proposing to dictate prices for russian oil. A cold winter is the reward. BTW Hungary is exempt from the $60 rule. Orban had made some smart moves early on.
And the US needs to learn from those mistakes. So far, I see little evidence of that.
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Old 12-06-2022, 02:34 PM   #33
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EU playing with Russian oil prices has some interesting effects, elsewhere.

https://gcaptain.com/russian-oil-san...r-old-tankers/

"LONDON, Dec 5 (Reuters) – The market for old oil tankers is booming, and it’s all down to efforts by Western nations to curb trade in Russian crude."
"In recent months, aging tankers have been sold by Greek and Norwegian owners for record prices to pop-up Middle Eastern and Asian buyers taking advantage of sky-high charter prices for vessels willing to ship Russian oil to India and China. "

"New ship owners willing to transport Russian oil are cashing in. “Ships earning $80,000 a day in the Mediterranean can make $130,000 a day if they carry Russian oil,” said one ship broker, who declined to be named as he was not authorized to speak to the media."

The EU has shot themselves in the foot and other vital parts by deciding to rely on Russian gas, do away with their Nuke plants, and proposing to dictate prices for russian oil. A cold winter is the reward. BTW Hungary is exempt from the $60 rule. Orban had made some smart moves early on.
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And the US needs to learn from those mistakes. So far, I see little evidence of that.
Yeah, I was just thinking that the USA is much smarter than Europe though YMMV.
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Old 12-06-2022, 02:39 PM   #34
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Yeah, I was just thinking that the USA is much smarter than Europe though YMMV.
I see a train wreck coming.
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Old 12-06-2022, 02:43 PM   #35
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I see a train wreck coming.
I think it's already begun and we're seeing the train wreck in slow motion. Take cover while ye may!
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Old 12-06-2022, 03:10 PM   #36
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The only option I had today was to buy gas at $3.25 for the RAV4. Minimal impact since I only needed 4.9 gal. Not much actionable on my end.
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Old 12-06-2022, 10:47 PM   #37
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....

One wonders if Russian is fighting for a Pyrrhic victory at best.
I think so, just pretend for a second Ukraine surrendered tomorrow, Russia would have a pretty damaged country and an unwilling workforce with a lack of women and children.
It will cost a lot to rebuild. Not much of a victory.
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Old 12-07-2022, 09:02 AM   #38
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.... One wonders if Russian is fighting for a Pyrrhic victory at best.
think so, just pretend for a second Ukraine surrendered tomorrow, Russia would have a pretty damaged country and an unwilling workforce with a lack of women and children.
It will cost a lot to rebuild. Not much of a victory.
I hope this isn't getting too (internationally) political, I actually know very little about the politics between Russia, Ukraine, and the EU.

But I guess Putin's thought is that Ukraine was unfairly taken from Russia at one point, and now he wants it back, to be part of Russia? If that's the case, I just can't see the point of bombing and destroying so much of what you want as yours. And the people of Ukraine are hating him for all this death and destruction. What's the point of alienating the people that you want to be part of your country?

Seems it would be 'smarter' (but also terrible) to start bombing Finland, and saying he isn't going to stop bombing Finland until Ukraine is turned over to him.

I just don't understand Putin's end game here.

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Old 12-07-2022, 10:42 AM   #39
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"What The Ship" YouTube posting talks about the Russian oil shipments by tanker, often quoting gcaptain. Another interesting resource are postings by Peter Zeihan.

Russia must keep pumping oil west because the wellheads are in permafrost and when oil slows the water in the oil freezes cracking the pipes. Putin saying he won't sell below a certain price is BS because he must sell at the best rate he can get because he doesn't have enough storage to mop hold unsold oil.

The EU's goal is to squeeze Russia financially. At the moment insurers are European. It is likely that others will join the insurance market.. for example in India.

Peter Zeihan has been talking about Russia's plans to take Ukraine for several years. Russia signed off on Ukraine's borders years ago. Russia's land grab plans continue west into NATO countries if they are successful in Ukraine. This is only a question of a fight with Russia now in Ukraine or later in Poland.
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Old 12-07-2022, 01:18 PM   #40
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Peter Zeihan has been talking about Russia's plans to take Ukraine for several years. Russia signed off on Ukraine's borders years ago. Russia's land grab plans continue west into NATO countries if they are successful in Ukraine. This is only a question of a fight with Russia now in Ukraine or later in Poland.
I have no personal insight but my Polish friend is convinced that Russia has it's eye on Poland next. He lived under their influence for most of his life - and he does not want to go back to it. Hence, Poland is likely the major refugee support center for Ukraine. My friend is personally helping many refugees with food and housing. It is similar throughout the country.
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