Topic: Pump the oil, baby, pump it! (Read 113 times)

Everything except the math perhaps. It's one thing to release big words during a campaign, it's quite another to translate them into reality.

At $50 a barrel, it's probably impossible to be profitable for oil companies. There's the tax break, however, as well as deregulation policies. The nitty-gritty of which is yet to be determined. Hopefully, it would end up fair to everybody lest "drill baby, drill" only benefits the drillers while the oil companies are overflowing with supply.

Well, if the domestic supply is cheap, dependency on Canadian and Mexican or even Venezuelan imports might significantly decrease. The rest of the supply could boost the country's oil export. Add to it the factor that foreseen stricter implementation of sanctions against Iran and Venezuela might deprive the world market of a million barrels a day.

This article is actually quite interesting in this regard.

The oil price could lower according to it, but not only because of federal regulations being relaxed (what Trump promised) but because of trade wars between a Trump-led US and the rest of the world, which would lead to lower economic growth and lower oil demand.

There could also be a contrary effect: As Trump has also promised stricter sanctions against Iran and Venezuela, these could actually lower the availability of oil in the US and rise the price.

The article also mentions that a lower oil price would reduce profitability of American oil companies, so there will be less incentive for exploration work.

So it's a complex situation, and the US president is not the only influential piece of the "oil price puzzle". The most likely situation seems to be a slight price decrease (and oil futures seem to be already trading lower), but not enough to really make a difference for the US population.

I'm unaware of some of the challenges, but within the very first year in office, the new administration should be able to achieve this.

A reduced price of oil will allow citizens to have more money to spend on other things.

Around the world, countries that depend on the US for oil will be happy that they will have to spend less on it, while competitors to the US on the oil market will be forced to reduce their own prices to eliminate the advantage the US will have from the reduced price.

When it comes to determining the price of oil there are other countries that needs to be on a table to effectively see it true, like you said this isn't a political board but there is no economical discussion without a little bit of politics here and there, and the Donald Trump's "Pump the oil, baby, Pump it" could be yet another political game to get on power.

Oil is an integral part of any industrious country and every nation hopes to get the price down at least the citizens but there are exporters of this oil who benefit from the high prices, am not saying Trump won't leave up to the hype but in terms of lowering the oil price to the figure he has in mind won't be an easy task.

With COP 29 in Azerbaijan having being exposed as what he is.

https://www.bbc.com/news/articles/crmzvdn9e18o

A deal-maker for Oil. A wolf in a Sheepskin.

I'm taking literally about the oil, they need to befriend what the past administration unfriended. That oil pumping means more oil in the circulation to decrease its price per barrel and to lessen the impact of inflation. And that's why the unfriended countries that produces a lot of oil needs to be on their side again, IYKYK.

From there, they'll have a better and stable economy. I've also heard that the Trump administration is going to be strict with the illegal immigrants and that will impact them economy, giving the opportunities to their own citizens instead of the illegal immigrants and that will give their people more purchasing power.

There is nothing wrong with the opportunities, the illegal immigrants can take them back if they're going to enter legally.

Trump actively engaged with the oil industry throughout his campaign, and I think he will follow through with relaxing industry regulations and scaling up oil production. It makes sense for him to do that not only because oil is still very profitable, but also because he does not seem to believe in climate change being a serious global issue. So he probably does not account for potential negative impact (including negative economic impact) of such policies.
However, Washington Post says that analysts are sceptical that White House policies will have a major influence on the price of petrol, so I'm not sure how economically beneficial his decisions will be, even from the short-term perspective. In the long run, I believe it will be bad for global economy because climate change is not just an environmental issue but also a challenge that will cost a lot of money to fight, and such policies exacerbate the problem.

First of all, the US alone cannot determine the price of a barrel of oil. That is determined by the global demand and supply of oil. Currently, the price of a barrel of oil ranges from $71 to $75 depending on the type of oil, so they can't decide to put laws in place that will reduce the price of a barrel to about $50.

What the new government can do is make policies that will reduce the price of gasoline.
One of those ways is increasing subsidies, but currently, the US already pays about $20 billion on subsidies so I don't see how that number is going to be increased because there have already been proposals to reduce it. If it's reduced, the price of petrol will also increase.

If the president-elect talked about how he will reduce the taxes of oil companies so the price of gas will reduce, I guess he's just saying what people need to hear because oil companies already pay lower taxes than a lot of other sectors which will make it difficult to reduce it even further and that aside, reducing taxes doesn't necessarily mean reduced gas prices.

One thing they can do though is bring back the payment of subsidies on ethanol. There used to be a 45% subsidy on ethanol. The majority of the gasoline in the US contains 10% to 15% ethanol and with a 45% subsidy the price of gasoline can be reduced by a few cents if not more. This might also help bring down the cost of other things like alcohol, cosmetics etc.  I don't think this will happen btw.
The government can also eliminate the federal tax on gasoline and diesel. There's an 18-cent tax on each gallon of gasoline and a 24-cent tax on a gallon of diesel. Eliminating it might reduce the price of petrol by a few per cent. I still don't believe this will happen too

So in my opinion, what the government can do is to find a way to make the dollar stronger and have more value, thereby reducing inflation and reducing the prices of things.
Speaking of inflation, Inflation in the US is at about 2.4%, i don't see how they are going to reduce it more than that, but fingers crossed.

As we all know by now, a new president was elected in the US this week. We will not discuss the person, we will discuss a few of his election slogans and the expected market reaction.
So, I would like to talk about two slogans “Make America Great Again” and “Pump the oil baby, pump it !”
What's that about? I will not go into the political aspects as this is an economic topic. Economically, it means regaining lost leverage, markets and forcing some market players to take the place that Trump thinks they deserve instead of playing gods. We won't discuss what Trump will do with the economy of China and other “fighters against the US and the dollar”, we'll talk about...oil. The second slogan, perhaps not known to everyone, is “Pump the oil baby, pump it !” and the idea is very simple - make oil cheap, give tax breaks to American oil producers and lower the price of oil to about 50 dollars a barrel. It should be noted that the US has everything it needs to REALIZE this !

Actually the question - your opinion, what is the forecast of realization of this slogan and what will be the impact on the economy of the U.S. and the world ?

PS Since the topic is likely to be about political views, the topic will be self-moderated, to avoid spam and all sorts of littering, I hope for understanding.