Bitcoin Forum

Today an important event happened that is OPEC won't cut oil output, which sends crude oil prices plummet to 4yr low to 70$ per barrel.

How this affects bitcoin?

Russia is already facing heavy sanctions by the western world for invading Ukraine and hence these sanctions are making credit agencies to downgrade ratings for Russia and hence both credit and Russian money is fleeing away from Russia for past few months.

https://www.youtube.com/watch?v=pnU2oBAszYo (https://www.youtube.com/watch?v=pnU2oBAszYo)
https://www.youtube.com/watch?v=0rHwmgg5pMk
 (https://www.youtube.com/watch?v=0rHwmgg5pMk)

While this has affected Russian economy there is even more,  much of the National budget and social schemes of Russia was planned on the hope that oil will always stay above 90$..but today with 70$ its sad day for Russia

All this will make Russia completely standstill and finally Putin will have to accept to the western terms and conditions!

This is cleary evident in ruble vs bitcoin..imagine just 1% of Russian money into bitcoin!

http://www.reddit.com/r/Bitcoin/comments/2nm261/russians_fleeing_the_ruble_for_btc_localbitcoins/ (http://www.reddit.com/r/Bitcoin/comments/2nm261/russians_fleeing_the_ruble_for_btc_localbitcoins/)

http://bitcoincharts.com/charts/localbtcRUB#igWeeklyzm1g10zm2g25zvzcv (http://bitcoincharts.com/charts/localbtcRUB#igWeeklyzm1g10zm2g25zvzcv)

TLDR: Russia isn't Cyprus! But what is happening seems to lead the country in that path! and if it happens in the same way then moon is just a blip in the trajectory.

I think it's ISIS that are dropping the oil prices, last I heard they were selling for like $20 a barrel.

And now I feel if the ISIS is really the gamechanger in the whole second cold war between west and Russia

Selling .001% of the supply at dumb low won't tank the price.

I feel bad for the Russian people, if their leaders were not complete and utter morons they would be using BTC to save their currency.  Alas they are from the 20's and are still probably scared of the fancy radio device never mind that interwebz thingy.

Are you crazy?  Their deep suffering was well earned.  When you allow yourself to be governed by thieves and bandits, you will pay later.  It is the duty of all persons to hold elected officials accountable.  If you accept their bullshit, the bullshit will fall on you eventually.  Russians now have to pay.  Millions of people shivering in the cold eating beets.  This is what they deserve.

Feel sad for the Russians, the best thing they can do is to buy bitcoins and HODL them

The effect of the falling oil prices are offset to Russia, to a large degree, by the falling rouble. Since Russian oil companies account for their profits in roubles (and also their costs are mostly in roubles as well), they haven't been affected all that much.

Conversely, the falling oil prices are much more damaging for the US shale oil companies. Their costs are rather high and they need a much higher oil price just to break even. The fact that the US dollar is raising is a double whammy for them.


LOL. Yeah, good luck with that.


Didn't Russia ban Bitcoin some time ago?

They also banned homosexuality.  That didn't work either.

AFAICR the only people who can hold their head up in that regard in recent history are Icelanders.

http://unenumerated.blogspot.ca/2008/06/commodity-hysteria-overview.html?m=1

No, they didn't ban homosexuality. They banned advertising homosexuality to minors. And it has worked very well - you can't advertise homosexuality to minors there without running the risk of being arrested.

The same can happen to Bitcoin. While they won't be able to stop everyone from using it there (heck, they can't even close down their own dark market for illegal drugs), they are perfectly capable of reducing it to a niche market used only by criminals and without real importance.

Anyway, time will tell. Maybe Putin will wise up and open his country to the free initiative. (Fat chance.)

So how does this affect the US nation? This shale is just new business and maybe could cut profits for few US companies, but on the other hand for russia the falling oil prices wil have severe impact on the social security bills and deficits, which putin will have to transfer upon wealthy oil and other oligarchs so that the streets does not start to riot!

Too early to tell. For now, the only observable effect is that US oil production has increased for the first time in decades.

My personal opinion (warning, I'm not an expert in oil production or economics but I am an "informed amateur" in economics) is that this whole fraking/shale oil thing is a scam (or a fad, if you prefer). Production costs are very high, the companies involved take on huge debts, and the output starts falling precipitously in just a couple of years. In the long run, it probably won't matter. The cheap oil is gone. We must either become more efficient or discover a new, more economical energy source.


Nor really, because of the falling rouble and also because Russia is starting to do more business with China and other Asian countries using currency swaps and avoiding the dollar altogether. It will have impact only on the Russian income from oil in US dollars and on Russian businesses who incur costs in US dollars. I don't have sufficient data to determine how significant those are but I rather doubt that they are as significant as you seem to think. Besides, Russia is perfectly capable of being self-sufficient. For now, Putin seems to be more concerned of the reaction of the hard-liners who accuse him of not taking more "decisive" steps toward Ukraine than of the reaction of those oligarchs who would be negatively affected by a falling oil price (when measured in US dollars).

We'll see.

What's weird is I saw recent article citing unprecedented demand for corn ethanol, for E10 and that made me WAT??? pretty hard, given apparent low demand for the oil part of that equation.

That's a good point. I work directly in the transportation of oil into the Gulf of Mexico and it's ports. Oil production is slow right now, not due to scarcity, but they actually have ALOT of production just shut down. The supply boats for the rigs are tied up in port, rigs only have skeleton crews onboard(watching generators, doing maintenance, etc...) I've been told in the spring they should start producing again???? It's very strange in the oilfield right now......

Note: I don't know how much the world knows about what's going on with LNG right now, but since 2004 enormous seemingly hidden, not talked about LNG ship docks and plants have been being built in the Gulf of Mexic(6 that I've personally seen steaming into ports and more do exist that I have not seen).....a big change is about to happen, and it's going to be LNG. From what I've seen from these massive plants, it may be a real game changer. The only thing publicly I have seen about it is Shell making motor oil from it and some new ships are being built to run off it.

Yeah the Panama canal is meant to be enlarged to take LNG tankers so they can sell it to China, it's been held up about a year though.

Looks like we are putting 2+2 together.....it seems like it's all about getting our steal, gold and now LNG to China.

Gotta pay for all that Walmart crap somehow.

LNG through Panama plans ... http://oilprice.com/Energy/Energy-General/Panama-Canal-Expansion-to-Grow-LNG-Trade.html
Delays.. http://www.energyglobal.com/news/processing/articles/Panama_Canal_delays_will_affect_LNG_and_coal_trade.aspx#.VHlMAGewXwo

Blasted to all ISIS cruel deeds, but on the other hand it brings a positive influence. when world oil prices fell automated purchasing power is getting better. and hopefully can improve the lives of the poor

I dont think ISIS are the ones making the price fall, as the oil fields they control produce a very small percentage of the oil produced globally. Something else has to be making it drop, but on the other side, the price of most commodities might drop.

The demand for corn (when being used for energy) is directly tied to the demand/price of oil, as corn is primarily mixed with oil to make E85 gasoline. I don't think there would be an increased level of demand for corn without an increased demand for gasoline (and oil)

XAXAXAXAXAXAXA!!!!! trololo blya

You forgot to add that fraction those thingies that USA does, can only be profitable at high Oil price. Since Opec will pump same amount of oil, that will move price lower. And Those companies will close and those that give loans to those companies will not get them back and those banks will bankrupt and guess who will pay that again?

Yah, seems unlogical http://www.businessweek.com/news/2014-11-25/wheat-climbs-to-one-week-high-as-u-dot-s-dot-freeze-seen-hurting-crops

Lol, isis don't have enough oil to effect the price. They're also not going to give it away for peanuts, though oil is very cheap in places like Iraq anyway.

Well maybe it's a two birds one stone thing, US strongarmed Saudis into it, so they can bring Putin to heel and also starve out ISIS.


Something like "You make sure production doesn't cut, or you don't get nice shiny new F-35s."

In contrast, the International Atomic Energy Agency, IAEA warned ISIS development in Iraq could cause world oil prices rose.
ISIS group in fear will prohibit companies that invest in production in the country. Iraq predicts a contributor half of the growth in oil production.
Only 10% of Iraq's oil production decline this year, because the area controlled by the ISI is not the region's oil resources.

if russia adopt bitcoins the Price will be back at 1000 dollars the rubles is losing is value people overthere are saving in us dollars and gold coins.the nuclear energy sector russia with china is developing hybrid nuclear ernergy a cheap energy

There is a very strong link between oil and the dollar, not so between Bitcoin and oil. Crude oil being denominated in USD is what makes the dollar the reserve currency of the world. In my opinion, any step by an oil producing country to sell a portion of their output denominated in Bitcoin will be a huge boost. There are some oil producing countries with a pathological hatred for the US, like Iran.

This could potentially be true. Or the Saudis could have declined to cut output in order to bring the world farther from the brink of war which would likely result in someone invading/taking over Saudi Arabia so they can get their oil to "gas" it's war machine

Like other eastern European countries in Russia there is a clear separation in society between "modern" people (guys who travel, uses internet for more than porn and facebook/vk, know a foreign language, etc) and utterly stupid and imbecile peasants (have few savings, go to church each sunday and then striaght to localbar to get some vodka, consider voting for Putin/former communists, never went farther than 300 km from hometown, don't have/watch any foreign tv station, etc).

In Russia the split is around 20/80, hence it is very easy for putin regime to demonize anything they want via their brainwashing (and amusing for westerners) massmedia. 

This being said, the "smart" guys already have their savings (or even salaries) in EUR/USD/gold etc. They are affected in a small part by falling rouble, and anyway they can't mitigate this with bitcoins.

For the rest of  80%, they are highly affected by this, but  they are at a living standard their parents and grandparents never dream of (they have electricity, running water, a WC in house and not back of the yard) so there is still a lot to "cut" until they will actually try to think about this. They are all used with "hard times" and even if they try to think/do something about it they will miserably fail since they don't have the knowledge or capacity to think for themselves when it comes to stuff like "should I keep my savings in a cryptocurrency or not"

I agreed with you. ISIS plays a great role in low prices of oil.

The main cause behind the unfolding oil glut is not declining demand but rising supply.

The dramatic expansion of shale extraction in the U.S. has been such that Saudi Arabia has effectively lost its main client. With global shale deposits apparently exceeding the equivalent of Saudi Arabia’s entire oil deposits, it was only a matter of time until technology would allow the energy industry to tap into this resource.

Now, hardly two decades after American industry began extracting it, shale accounts for nearly half of U.S. gas consumption, as drilling abounds in Texas and Dakota while the U.S. produces one tenth of the world’s oil and looms as a net exporter of oil. Other countries with great shale deposits, most notably China, will soon follow suit.