ROCKMAN wrote:A US "oil glut" right now? Latest numbers Oct 2016: US oil production...273 million bbls for the month. Total consumption..608 million bbls for the month.
Again: glut?
Did I say US oil glut, or oil glut? Of course there isn't a fracking glut. There have been a lot of bankruptcies. Never mind what is in storage the question is really, how long would it take for the fracking industry to ramp up production to a level replacing lost supply from an embargo while oil sources outside of the Middle East maintain supply? Would it take so long that gas prices would rise to a level that killed the economy, or would it only take as long as high gas prices that the economy could live with? There might even be rationing used as a measure to balance out the problems, but markets tend to be more efficient and independent contractors wouldn't function well under rationing, unless there were exceptions to maintain commerce.
As far as government measures go, I suppose this would include relaxed laws regarding financing for fracking operations. They would probably allow more risk. They might let pension funds and investment banks walk into some debt instruments they ought not to. They might even encourage it as a way to keep the investment off of the public debt roles.
There might also be a manpower shortage. The government might introduce measures designed to make people more comfortable with relocation, such as making it easier to unload an underwater mortgage if you were going to move to North Dakota. They could make promises, that is. They might get enough movement just from promises.
Oh, and you'd probably see the US Navy in the gulf of Guinea. These days I guess the Marines are separate. You'd see the Marines too. Something might happen in Haiti, as that is the best staging area for intervention in Venezuela. They probably wouldn't do anything inside Venezuela. The threat would probably be enough.
Basically, what I am saying is that the Breton Woods world would be at stake if the US were to back Israel and fail at it, should the Israelis attempt a land grab. That's just one scenario for a possible oil shortage. I'm saying that the nature of the shortage does have a say in what would happen as a result of it. Geopolitics are different than a comet strike or a dollar panic.
Thanks for giving me the chance to say fracking glut. My inner child is really amused by that.