“Drillers around the world have already begun to trim exploration budgets and delay new projects as a result of low prices, but production from existing fields will continue and keep supplies high.”
You can find gas in South Carolina below $2 a gallon and experts predict it will get lower. As the above line from the story below indicates, there is too much oil on the world market.
So why do we want to risk all the negative consequences of building the Keystone XL Pipeline to bring CanadianTar Sand Oil to the Gulf for processing (i.e. oil spills polluting ground water, increasing the cost of gasoline in Midwestern states, burning dirty oil containing higher levels of carbon thus feeding climate change that threatens our SC coastal tourism economy)?
The answer is simple. A big Canadian oil company is throwing around tons of money to make it happen and proponents in Washington either believe or are pretending that the pipeline construction will create thousands of permanent jobs. The latter is absolutely untrue. The U.S. State Department estimates that possibly only 50 permanent jobs will be created.
The proponents in Washington also either believe or are pretending that constructing the pipeline will reduce U.S. gas prices. But as we now know, the world has way more oil than demand so driving it much lower simply won’t happen. And besides, the Canadian Tar Sand oil doesn’t belong to our country. It belongs to a private Canadian company that will sell it on the world market.
So when Congress very soon starts voting to approve the construction of the pipeline, remember that they aren’t doing this for you. They are rewarding the petroleum industry.
Canadian big oil companies get the profits and America gets the pollution.
US oil falls below $50 for 1st time since 2009
By JONATHAN FAHEY
AP Energy Writer January 5, 2015
NEW YORK — The price of oil plunged again Monday and fell below $50 a barrel for the first time since April 2009 as evidence mounted that the world will be oversupplied with oil this year.
Benchmark U.S. oil dipped to $49.77 before closing down $2.65, or 5 percent, to $50.04 a barrel. Brent crude, a global benchmark used to price oil used by many U.S. refineries, sank $3.31, or 5.9 percent, to $53.11.
In June of last year oil traded above $107 a barrel. But rising production outside of OPEC, especially in the U.S., boosted supplies just as weakness in the global economy slowed the growth in oil demand. OPEC’s decision in November to maintain existing production levels accelerated the rout in oil prices.
Slower growth in China’s economy, a driver of oil demand in recent years, and a strong dollar, which makes oil more expensive for holders of foreign currencies have also pressured oil prices.
On Monday Citigroup cut its forecast for 2015 global oil prices as a result of high supplies. Citigroup analyst Ed Morse wrote in the report that the first half of this year will bring “a step-up in oversupply, more volatility, and turmoil.”
Morse reduced his forecast for global crude to an average of $63 a barrel for 2015, down from $80 a barrel.
Drillers around the world have already begun to trim exploration budgets and delay new projects as a result of low prices, but production from existing fields will continue and keep supplies high.
The last time U.S. oil traded below $50 was April 29, 2009.
The low oil prices have led to sharply lower fuel prices for shippers, airlines and drivers. Morse equated the drop in global oil prices to a $1.6 trillion stimulus package for the world economy.
On Monday the U.S. national average price of gasoline fell to $2.20 per gallon. That’s $1.12 cheaper than last year at this time and the lowest since May of 2009. The Energy Department estimates the drop in gasoline prices will save U.S. households $550 this year.