President Trump needs a lesson in supply and demand. When you add too much supply the price of the product or commodity falls. Lets
take oil because of president Trump executive order for a Canadian company to
build a pipeline across America that will transport Canadian oil to China. First off how does this benefit America? It doesn’t.
What happened to oil when we started opening up oil drilling
in America and Alaska under Obama? Oil
went down from $150 a barrel where it was under Bush Jr to $50 where it is today. So drilling more oil out of the ground and
sand actually adds too much supply and thus decreases its price.
What will happen when the pipeline is up and transporting
the oil from Canada to Mexico? Here’s
what will happen. Oil prices will fall
even further leading oil drillers to stop drilling and shutting jobs down. So in actuality the Keystone pipeline is
actually a job killer.
Here’s what President Trump must do instead of creating an
oil pipeline that will lower oil prices and then cause massive layoffs in oil
sector. He must sign an executive order
to repair bridges and tunnels in this country that are falling apart. Obama tried to do this, but republicans stopped him. This will create long term employment. He must tell Canada to forget its pipeline which
is a pipe dream job killer.
We need to learn from OPEC if we want to play in the oil
production business. When oil falls
below $60 OPEC knows it’s no longer worth it to drill. So they stop drilling. Oil majors know that they only make money
when oil is $60. So adding more supply
when oil is about $60 will only cause oil majors to stop drilling leaving us
with an empty pipeline.
Instead of drilling more when oil prices are low, we need to
stop drilling and wait until prices go up and there’s a reason to drill. The oil that comes from Canada is extracted
from sand, which is more expensive than drilling from the ground. This is why the republican idea that Keystone
Pipeline creating jobs here is a pipe dream.
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