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Posted on 12/17/14 at 2:55 pm to DelU249
quote:
When you greatly reduce costs, you lower the price for your product.
It also forces other sellers in the market to compete with that lowered cost. Even if they're a cartel
I know that sounds good and in a economic vacuum that is true...BUT, in this case, the reason the pipeline is being built is to get the oil to the gulf coast where the producers can get a higher price for their oil. The first leg has already been built from Cushing to the Houston Ship Channel...Permian and MidCon players wanted that bad because all of their oil was stuck up in Nebraska and they were getting a very low WTI price with additional deducts for the oil coming out of the Permian.
Also, transportation costs of oil sands isn't going to change the market price of oil.
Posted on 12/17/14 at 2:57 pm to DelU249
quote:
When you greatly reduce costs, you lower the price for your product.
Except the shale oil from Canada is not being sold to the US its being sold abroad for consumption abroad and the money goes to Canada. This will have no effect on oil/gas prices here.
The only economic benefit for the US is the construction and infrastructure jobs.
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