The Changing Face of Oil Markets

I have a habit of buying gasoline at $15 per fill up. I have convenient locations on my daily flight path and so I don’t mind the constant stops. But as prices have fallen I have noticed that in the beginning I barely got one-third of a tank. Today for my $15 I got more than one-half tank and paid less that $2 per gallon (--)  Thank you President Obama!

The worldwide glut of oil is a fairly small differential; the overproduction is not dramatic, but as better spoken by Shakespeare- paraphrasing here- tis not so deep as a well nor so wide as a church door…But tis enough.  The critical factor is the U.S. market, it was the U.S. market after all that began the illegal control of oil prices by the oil producers in a nation whose basic laws require the opposite- The fundamental legal policy here is to oppose monopoly control and trusts.  By allowing the producers to control the price and supply of crude oil, we auctioned our national future for the sake of a few oil companies and their stockholders.  Finally, the flown birds have come back to roost.
The trigger was U.S. Shale oil production and the noxious hydraulic fracturing technology. The kicker was the technological refinements in that technology that significantly increased production efficiencies and yield per well, per day.

There are many international scenarios intertwined in the changing face of oil markets, and even as the price of oil continues to fall, there are signs of a further economic slowdown in Europe, a profound slow-down in Russia, and the lessened strategic value of oil as a political and military weapon. Consider the extraordinary effectiveness of Western sanctions against the Russian Invasion and Occupation of Ukraine. A Republican U.S. President would have ignored it with no more than passing bits of harsh language. The weak-kneed Republican response would have been to increase arms sales to the satellite nations that could afford to buy more. But Obama established a definitive global impact that has had a profound effect on the Russian economy; oil is the engine for its military aggression. A shrouded public in Russia will not understand that the invasion of Ukraine and Occupation of Crimea has little to do with national pride and a lot to do with creating vast luxuries for his network of fellow Russian billionaires. But controlled media cannot douse the growing hungers, unemployment, and shrinking purchasing power. The face of oil has changed in Russia, from the great fountain to a meager flow.
 In the U.S. drivers enjoy low priced gasoline, some ancillary consumer benefits may come in the form of lower production costs for goods and agriculture- intertwined with petroleum-based chemical processes- may also see some commodity price benefits. More than anything, the drain of petroleum prices was a drag on economic growth; along with insurance, petroleum siphoned much of the lifeblood of the U,S, economy, which can have substantial periods of consumer-driven expansion(--) or simply pay $4 at the pump and stagnate- we see growth and it is impelled by  lower fuel costs and increased discretionary spending. The face of oil markets has changed in America.
Lower prices may eventually shut down some new production, and this is the floor for oil prices; when production declines. However, as an insular market - we do not export crude oil- there is an insulating price factor too. Domestic shale oil can survive below $60 per barrel, and low prices will encourage greater efficiency.  There is a window of production efficiency that is a by-product of the rush to establish production, Not enough care to some, but certainly room for improvement in capturing useful substances that were initially cast aside as wastes.  While some projects will close and other will never open, the impact has been felt, and production will continue even as prices fall below $50 per barrel.
In the near future, as alternative energy continues to grow, many structural users of petroleum and natural gas will adjust their reliance on crude oil, electric cars too will have some immediate force, and then a far more pronounced market impact. The U.S. will once again face an opportunity to move further past oil. Whether hydrogen powered vehicle as envisioned by Toyota or national deployment of solar production, a set of panels on every roof, we will have opportunities to use national policies to further change the face of oil markets.

The XL Pipeline has become obsolete before its construction, and this is a telling impact of change. The dirty, difficult-to-process mountains of tar sands have no place in the world's markets, and only continue due to the influence of money on the U.S. Congress. Seen in the light of changed oil markets, it appears to be a nearly corrupt abrogation of national interests. To burden the world with un-needed, life choking levels of pollution, and to abuse the precious American heartland to deliver Canadian oil profits. Even in news and truth-sheltered and limited American public will begin to wonder why we would do such a thing, inflict such a scar on this beautiful country. They will wonder of the patriotism of the corporate Senators and Congress-persons, and they will wonder why we would make such an effort to raise oil prices, there is no cheap way to process tar sands.

Sources:
Chevron Shuts Down Arctic Deep Water
http://switchboard.nrdc.org/blogs/ddroitsch/reality_bites_chevron_indefini.html?utm_source=fb&utm_medium=post&utm_campaign=socialmedia

XL Pipeline is no longer financially sound
http://www.latimes.com/nation/la-na-keystone-20141216-story.html

http://www.politico.com/story/2014/12/oil-keystone-xl-113551.html

hydrogen cars from Toyota
http://www.businessweek.com/articles/2014-12-17/toyota-embraces-fuel-cell-cars-for-post-gasoline-future