The real oil revenue fixer is not Opec, much less American shale oil, but the European taxman.

Sir, I can’t believe you use extremely valuable influential space such as your “Comment” space to allow Alan Greenspan to opine such nonsense as the higher cost American shale oil extractor’s having taken over from Opec the power over the price of oil.

What’s wrong with him? Does he not know that the price per barrel of oil is between $50 and $60? Does he not remember that as late as March 1999, The Economist, in “The next shock?” wrote” “$10 might actually be too optimistic. We may be heading for $5”. Had oil not gone over $50, there would be no American shale oil extraction to talk about. 

But, if there is anyone who effectively has taken over the power of generating revenues from oil, which is even more important than influencing the price of oil, well that is the European taxman who by means of gas (petrol) taxes, gets way more revenue than what is paid for a barrel of non-renewable oil of any provenance.

PS. In fact Opec and American shale oil extractors have a common interest fighting the European taxman.

Should not US shale oil producers sit down with Opec to have a little conversation about mutual interest?

Sir, I refer to Roula Khalaf’s “A kingdom fit for an oil price ordeal” December 30. It refers to a battle, supposedly for market shares, between traditional oil and shale oil, in which Saudi Arabia in its own name, and fait accompli in the name of Opec, do no want to lose out one more barrel. We will see what happens.

That said to me it has been clear that even more than some weak Opec members might wish for a reduction in oil supplies that strengthens oil process, in order to help their fiscal accounts, so must most of the shale oil producers with their much higher extraction costs.

The fact is though that shale-oil extractors can probably not sit down and chat over production limits with Opec, because that would perhaps be regarded as a cartel… and we can’t have that with private companies, can we?

But at least Opec and shale oil extractors, as well as other oil sourcing countries, could have an interest to sit down and talk about what to do with all those taxmen who, for instance in Europe, by means of gas consumption taxes, are perceiving much higher revenues per barrel of oil than they are… and are of course helping to put a damper on the demand of oil...creating a demand deficiency. I mean, is not a tax collectors cartel just like any other cartel?

Tweeting "Oil: The Big Drop"

Sir, I refer to your FT series “Oil: The Big Drop” December 16, in order to suggests some tweets.

Oil is 97% of Venezuela’s exports, and 75% of Russia’s. If oil prices go down 40%... bye-bye Maduro, bye-bye Putin?

Venezuela suffers shortages of basic goods & inflation of more than 63%, and yet its economy is to shrink only 3%?

Hunger or Freedom? High oil prices make Venezuela a medieval feudalism; with citizens serfs to an elected Lord of Manor

The State gets 97% of Venezuela’s exports. How much does its citizens’ relevance increase, each $1 drop in oil price?

If Europe wants high oil prices, to get high inflation, so to repay its sovereign debts, it should be institutionalized

The European taxman is scared European motorists will ask: Why does not gasoline prices go down much?

It seems like those who should have the largest vested interest in joining Opec are shale-oil extractors in the USA

Will there be new rounds of quantitative easing to bail out failed expensive oil lenders and investors?

Have green energy investors or subsidy dependents, adequately hedged against so much lower oil prices?

Ps. More tweets might follow

http://theoilcurse.blogspot.com

http://petropolitan.blogspot.com

“My deflation is horrible, yours, oil, not so bad”

Sir, inflation seems to be have been identified as the number one tool to smack grandmother Europe back into fertility and force her to vibrate on the dance floor again. And though that must sound quite eerie to the poor of Europe, those who always end up being most taxed by inflation, most of you in FT clearly agree with that approach.

And that is why I was slightly surprised when I now read you categorically stating: “Weaker oil prices are a restorative that the flagging world economy needs”, “Opec members flounder in a flood of cheap oil.” November 28.

I say that because it would seem that lower oil prices are more likely to fuel deflation than inflation. But, I guess the beauty of inflation, like so much other, is also in the eye of the beholder, “my inflation is splendid, your inflation not so good”.

Sir, for the record, let me remind that though some inflation could help to put some kick back into granny again, that can only happen as long as she really wants, dares, and is allowed to do a comeback.

Unfortunately, while Europe insists on credit risk adverse regulations that effectively stop banks from lending to small businesses and entrepreneurs, that does not seem to be what the family wants for her. Currently Granny Europe is kept more into a “let me just die as painlessly as possible” mood.

PS. By the way, Opec should have invited the USA shale oil producers (extractors)

Perhaps the US shale oil producers should join Opec

Sir, in “A new chapter for Opec?” November 26, Anjli Raval and Neil Hume, describe Opec and the US shale oil-producers as competitors… and this though in many ways they share the same problem and perhaps would be better of as allies.

What problem? That the taxman, at least the Europeans taxman, needs, wants, and by means of taxes on gas (petrol consumption) gets more income per barrel of oil, than those who sacrifice that non-renewable resource forever.

What would the demand for oil be in Europe and other places if gas (petrol) was not such a handy product to collect taxes on? I don’t know how much higher it would be but, if I were one of those Opec ministers, I would certainly invite those shale oil producers for a little talk on shared strategies.