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Guess What Happened The Last Time The Price Of Oil Crashed Like This?

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posted on Dec, 1 2014 @ 04:26 PM
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Guess What Happened The Last Time The Price Of Oil Crashed Like This?



There has only been one other time in history when the price of oil has crashed by more than 40 dollars in less than 6 months. The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months. Well, now it is happening again, but this time the stakes are even higher. When the price of oil falls dramatically, that is a sign that economic activity is slowing down. It can also have a tremendously destabilizing affect on financial markets. As you will read about below, energy companies now account for approximately 20 percent of the junk bond market. And a junk bond implosion is usually a signal that a major stock market crash is on the way. So if you are looking for a “canary in the coal mine”, keep your eye on the performance of energy junk bonds. If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street.

As I mentioned above, energy companies now account for close to 20 percent of the entire junk bond market. As those companies start to fail and those bonds start to go bad, that is going to hit our major banks really hard…

Over the coming weeks, keep your eye on the price of oil, keep your eye on the junk bond market and keep your eye on the big banks.


Source

With central banks propping up the stock markets now, it makes me wonder if they actually would let it collapse?

At least something to keep an eye on for the upcoming time.




posted on Dec, 1 2014 @ 04:30 PM
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a reply to: BornAgainAlien

Thanks for the tip.



posted on Dec, 1 2014 @ 04:36 PM
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a reply to: BornAgainAlien
while the observation is true on the surface,the rumors I've read and heard believe that OPEC maintained the production in order to hurt the soviet oil sales.If the soviets are supporting the ISIS ,oversupply will hurt the russin economy.It will also make investors think twice before investing in the keystone pipeline,fracking,or alt energy.This will keep the world dependant on middle east oil in the future.



posted on Dec, 1 2014 @ 04:37 PM
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Oh well.

Most of these financial institutions are a leech on the public and maintained by a close nit hierarchy.



posted on Dec, 1 2014 @ 04:55 PM
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I'm as interested in the effect this will have on the petrodollar. After all, it stands to reason that this will result in a bit of a decline in the demand for dollars if most oil is indeed traded in dollars...so....



posted on Dec, 1 2014 @ 05:05 PM
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a reply to: AnIntellectualRedneck

It`s all so much entangled that I`m wondering if they actual have a good idea about what goes out of balance.

We have seen it before since `08 that everything started to jitter and they had to do artificial measures in all sorts of places, fall `09 and the height of the Euro crisis were two of them.

But yeah, the Dollar can get jittery too...we just have to wait and see I guess.



posted on Dec, 1 2014 @ 05:13 PM
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originally posted by: AnIntellectualRedneck
I'm as interested in the effect this will have on the petrodollar. After all, it stands to reason that this will result in a bit of a decline in the demand for dollars if most oil is indeed traded in dollars...so....


I agree with you, but there is something else to consider here. This could be happening as a way to completely destroy the rest of what is left of this country. Let me explain...

Lower cost of oil means countries purchasing oil in US dollars will have to keep a smaller stock of US currency. This will be especially true the longer the run on oil continues and the lower the prices go. Even when it stabilizes, the majority of other countries might decide not to hold on to as much US currency as they were. That money goes back into the pool.

Welcome inflation.

As more countries release their holdings of US dollars back into the currency pool, the value of the dollar further deteriorates. This could happen in a dramatic fashion, otherwise known as hyper-inflation, if several countries were to suddenly dump their reserves.

I would be more worried about that scenario being the case, and someone playing the oil markets to try and tip the US economy over the edge by devaluing the dollar further.

Just my $.02


~Namaste


+1 more 
posted on Dec, 1 2014 @ 05:29 PM
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a reply to: BornAgainAlien


The article is not taking into account that the United States is producing almost as much oil as Saudi Arabia is.

Thanks to fracking.

Oil is dropping because there is an abundant supply of it.

And I'll throw this out there. It might also be a ploy weaken Russia and their oil market. Others can chime in. But I think that Russia needs to be in a certain price per barrel range to make a profit.



posted on Dec, 1 2014 @ 05:32 PM
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There is still enough fuel beneath the continent for domestic use....Canada, Mexico, and the US combined would have an edge perhaps internationally....(The encouragement of migration north by Mexicans increases)and the way they are negotiating this secretly still bugs me...they just need the right crisis, and this could be the kicker.....



posted on Dec, 1 2014 @ 05:35 PM
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Oil price weakness to "threaten Putin's power in Russia"

But for some of the oil exporting nations, it is a financial disaster. In Russia, it is estimated the falling prices have already cost it $100 billion.

With the economic sanctions imposed on Russia over Ukraine, the decline in oil prices could not have come at a worse time.

The price of this global commodity has declined by nearly 40 per cent this year - below the cost of production in some countries, including Russia.

While the oil pumps keep flowing there, the rivers of revenue gold in reverse have reduced to streams.

As the price goes down, so too does the Russian rouble, which has declined by around 40 per cent this year.



Well now!!!



posted on Dec, 1 2014 @ 05:44 PM
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Here is a short vid with breakeven oil prices...

Link



posted on Dec, 1 2014 @ 05:44 PM
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originally posted by: grey580
a reply to: BornAgainAlien


The article is not taking into account that the United States is producing almost as much oil as Saudi Arabia is.

Thanks to fracking.

Oil is dropping because there is an abundant supply of it.

And I'll throw this out there. It might also be a ploy weaken Russia and their oil market. Others can chime in. But I think that Russia needs to be in a certain price per barrel range to make a profit.


From what I understand, if oil remains at these levels the Soviet Union will need to sell China oil at a loss on the negotiated costs they both signed.



posted on Dec, 1 2014 @ 05:54 PM
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a reply to: BornAgainAlien

Gas prices predicted to drop below $2.00 in some places.
link



posted on Dec, 1 2014 @ 05:56 PM
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Right now, we are out producing the world due to fracking, while geo-politically it's brilliant, ecologically, it will have devastating effects on our nation. I do believe it is to destabilize Russia: ie: Putin, who's been waving the sword for almost a year now trying to shore up Russia as a global leader again. His ex KGB mentality has put a vise on his balls and won't let go till he either proves himself a stud or falls by the wayside with no balls left. Either way he's in it for the long hall. We all know he got re-elected due to voter fraud, there are still hardline communists in Russia and there in the driveway.
edit on 1-12-2014 by twohawks because: (no reason given)



posted on Dec, 1 2014 @ 05:57 PM
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originally posted by: ItCameFromOuterSpace
a reply to: BornAgainAlien

Gas prices predicted to drop below $2.00 in some places.
link


In the US this should stimulate the economy and lower prices on some stuff due to lower fuel prices. Poor and middle class will have extra money to spend on other things. If this goes long enough it might even produce jobs.



posted on Dec, 1 2014 @ 06:00 PM
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a reply to: auroraaus

Like I said in another thread, if Russia is being pushed with its back against the wall, I think first the Gas Card (cut it to Europe) will be played and next the Gold Card (back the Rouble with gold).

Russia still can sell its oil in Dollars, so it can now buy more Roubles for the Dollar.

But with the Rouble taking huge hits, you can watch out for gas-supply cuts to the EU...exactly what the US wants, so they can break Russia/EU ties even more. Very dangerous what is going on, if Russia is deliberately is being targeted, it might go for the Gold Card also with bypassing the Gas Card straight away.

I don`t think this is such a good idea if done deliberately by The West.



posted on Dec, 1 2014 @ 06:03 PM
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a reply to: BornAgainAlien

Yep - just backing up with a news article what I've seen you say

Something stinks like a gas leak or summat lol




posted on Dec, 1 2014 @ 06:04 PM
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a reply to: Xeven

The OP says it will cost millions of oil jobs...?



posted on Dec, 1 2014 @ 06:18 PM
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I think the price of oil is heavily manipulated.
There wasn't a glut all of a sudden over night.
This is the US and Saudi putting their collective might together to squeeze Russia.

It proves to me 2 things.

1. The oil companies have greatly manipulated the price of oil to make incredible profits for the past decade.
2. The Australian Government is full of BS. Oil hasn't changed in price here, yet the cost of oil has halved.



posted on Dec, 1 2014 @ 06:48 PM
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Funny thing is 1 Russia is trading in gold for oil...as in bars not paper iou bs. 2 is the efficiency of our shale oil wells...theyre not gonna be able to output as much cost effectively and therefore will not make much profit so they will have to scale back. There was a good thread on this yesterday and it looked at a lot of angles to this...including the US producing more gasoline than any other country...so while it hurts us on the oil production end who do you think gets to buy that cheap oil to sell as gas after its processed. Thats my take on it.
edit on 1-12-2014 by RickyD because: (no reason given)




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