Geesh. Let's get our facts straight here. First of all, roughnecks (common name for those working on oil rigs) are having a hey-day right now. They are getting paid better than they ever have. Its the fastest growing job sector in the U.S. right now (see link below). So why on earth would they go on strike??? I believe they are getting in excess of $30/hr on average, plus per diems.
Second the owners of drilling rigs are not the ones enjoying the profits of oil or natural gas sales. Oil companies own and operate wells, whereas drilling rig companies own and operate rigs. One is the client of the other.
And regarding the answer above, there are blatant misstatements of facts. Iran, IRAQ and Venezuela only make up approx. 11% of the world's oil production,......not half.....not even close. Additionally, the U.S. is the 3rd largest producer at approx 8 million barrels per day, NOT the holder of the 3rd largest reserves - we have approx 3% of the worlds proved reserves - we've just developed those reserves far more than most so we are producing more. The problem is that we use 21 million barrels per day, so we import 70% of our oil. That's sending approx $700 BILLION to foreign countries PER YEAR. The imports keep growing as well as the price of oil, thus increasing the number from both ends. This is what is having a huge impact on our economy. Now if our government would just let oil companies drill here in the U.S. we could keep those $$$ here, and cause massive job creation.
Lastly, speculators have a very limited impact on the price of oil. Why, because they are not users. All the future contracts they buy, they eventually sell, hence they NEVER take possession of the actual commodity, so all the ';demand'; they create, they eventually unwind a few months later when the future contract matures. An understanding of markets and economics comes in handy here.
How do I know this? I also work for a small domestic oil company and we have a subsidiary that owns and operates drilling rigs. Before that I worked on Wall Street providing financing for oil companies.
This is just a hot topic these days, but the tragedy is that very few have the slightest idea about what is truly going on, and even less have a grasp of actual facts. If the average American (and politican) were just to take a economic class....Would a strike by the oil rig hands/oil field workers cause the U.S. to pay more attention to gas prices.?
No. Because it is not the problem with the high prices of oil and gas. The problem lies with speculators. They did it in the late 1990's to the Asian currencies when we laughed at Dr. Mahathir from Malaysia who said these mercenary funds and their operators would come home to roost eventually as they would need another commodity to bully.
The US remains one of the largest owners of the world's oil as well as the largest user of oil and gas. Within the US lie the 3rd largest world reserves of oil. Its interest in the oil production of Saudi Arabia and other countries makes it possibly the largest in the world as far as control of reserves are concerned. Its ability to control the sea lanes which the oil is carried through and to interdict and interrupt its flow makes it ultimately responsible for what happens to oil and oil prices.
Recently though, Venezuela, Irak, Iran, Indonesia, Nigeria, Libya and Algeria have been experiencing problems with foreign direct investment in oil production domestically.
Iran and Irak of course together with Venezuella make up about half the worlds production. Collectively these countries all unfriendly to the US and its attitudes towards them, control more than half the worlds production. The Saudis too are not very friendly with the US.
Irak was meant to be a push over with the killing of Saddam a former ally. But like most other dreams they turn into nightmares and this one provied no different. So there is 6.5 million barrells per day less on the market from Irak.
Add to this the US desire to force China and India to free their currencies so that it can be speculated against, and you get an American controlled oil industry worldwide raising prices through the use of futures contracts and other synthetic financial devices to drive up prices. Why?
China and India are voracious users of imported oil to drive their economies. They have little control over that commodity on the supply side. China has enormous foreign exchange reserves which are the largest in the world. It keeps the Yuan, its currency artifically low to make them super competitive against the world in terms of manufacturing and other industries.
The US and Europe have repeatedly asked them to free float the Yuan and they have not complied. This is a way of forcing them to release some of the foreign exchange reserves if they don't want to free float the Yuan. In increasing oil prices artificially they have been forced to sell down some of their reserves especially US dollars they hold to pay for oil denominated in US dollars. It also makes production of manufactured goods in China in the end more costly than it has been so far. get the picture?
If oil workers lay down their tools, they can be replaced immeidateely with cheaper workers. Workers are people. People are dispensible commodities in the world today. Not just in China, but also in Irak and in the west.
The fact many in the west go cold, hungry and without what they would otherwise have been able to afford dos not matter. We have a government of oil and construction executives. Thats what matters. Go to Allentown and ask them what happened to their jobs. The government line is that this is the free market. Free for them to sell your rights to a less responsible government who can kill or imprison their people who do not comply or who will strike with impunity. Its a form of rendering. Rendering your jobs
In God we trust. All others pay cash.
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