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March 09, 2017


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OIL PRICES and Water: If you follow oil and the comedy act around it then you have to be amused and amazed at the ability of the suppliers of oil to keep the price up. Oil is every where. All you have to do is dig deeper. First let's take the game players who have nothing but oil to sell the world: OPEC. If you had an unlimited reserve of water and it cost you nothing but transportation to produce it then what would you do with it? Sell it. How much would you sell? Either as much as you could above the cost to transport it to market or as much as you need to make as much profit as you wanted to support your lifestyle. So, what do you think the likelihood is that the OPEC players will live with production limits? Given that most of them are in the second group then as the price falls they have to sell more in order to meet their budgets. The lower the price goes the more they cheat. The higher the prices go if they do restrict their sales the more the US (and other) non OPEC producers will add to capacity and drive prices lower. In the meantime what is the easiest way to get prices up? Threaten to or go to war. Terrorists therefore are a marketing arm of the Muslim oil producers. The wars that have persisted in the Middle East have long played that role for them. Thus, it is not surprising for find the same governments funding terrorists. It is not surprising to find them against peace with Israel. And, they will always announce production cuts are they continue to pour oil out of every pipeline they have. Meanwhile the media will invite the oil industry to tell them where they expect the oil prices to go. Not surprising they say $60-70 oil is on the horizon. Just a couple quarters away. Meanwhile we have a President hell bent on increasing US production, exporting oil to compete and keeping the price lower. Now, today, we find we have a glut of GASOLINE out there. Want to buy some seawater? Or perhaps some Sahara sand?

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