The price of crude oil momentarily dipped to just below $40 per barrel on Friday. Hearing about the oil market reminded me of the coming Second Signpost, the invasion by Iran (as if I needed a reminder). About these low prices, the Wall Street Journal article said there is “a growing consensus that cheap crude is here to stay.”
Indeed, if there was no Second Signpost coming, I would agree. US producers with their new technologies are attempting to make the US independent of foreign oil. Saudi Arabia, wanting to maintain its position of leadership as the number one producer of oil in order to maintain its markets has raised its production. On top of that demand has eased a bit with China’s slowdown. Yes, low oil prices would be here for a while much to the benefit of consumers.
But the Second Signpost will put an end to that. As I have shown in Daniel Revisited and in numerous posts on this website, great turbulence in the oil market and a resulting deleterious effect on everyone’s lives will result. A test is coming of the Signpost interpretation. If the four horsemen are indeed representative of each of the Four Signposts and hence the four beasts of Daniel 7, we should see peace of mind and relative lack of concern for day-to-day living be removed from much of the world. Revelation 6:4 says of the second horseman, “Its rider was given power to take peace from the earth…”
How else could peace (in the Greek, iraynay) be taken from the earth? How would a great Sunni-Shia War covering the Mideast take peace from the earth. We only have to look as far back as the Arab-Israeli Wars of 1967 and 1973 to know how peace was under assault. Was it because Israel was being attacked? Unfortunately, no. It only concerned Americans (and Israelis of course). It was the oil.
In the last forty years whenever anything bad happens in the Middle East the oil price jumps a bit. In 1973 when 6% of the world’s oil supply was cut off the price doubled (yes, doubled). If Iran takes over the oil fields and turns off the spigot we are talking about a 25% cut off. I believe a doubling in the price would occur overnight and only be the beginning. This is a guess on my part of course, but what kind of prices might we see? We could possibly see oil at $200 per barrel and gasoline at $10-12 per gallon here in the US. But this might be conservative – it might go even higher. It will go to a level that fulfills the prophecy of the second horseman.
The point is, consumers and nations could get used to $40 per barrel oil and make investments and decisions assuming it will be like this for a long time. For instance, look at the graphic half-way down the article. It shows in the last year that the number of rigs being used has been cut in half in the last year because of the low prices. There is pressure to reduce oil production which would make the Second Signpost, when it strikes, an even greater hardship.
The Second Signpost will change many things and impact the world economically. Be aware of the Second Signpost. And don’t count on continuing low oil prices. Iraynay could be taken from the earth.
Categories: In The News, Signpost #2: Iran
Real oil shortages do always lead to much higher prices in the beginning. But because of the high prices, some businesses go bankrupt, and others fire part of their employees, so the number of unemployed will rise sharply. This can be so bad that the demand for oil, from companies and from consumers, goes down irreversibly. This is called “demand destruction”. Because of this, the oil price will go down again, but the average wage of everybody (including the unemployed) then may have become so low that the oil, cheaper in number of dollars per barrel, is still unaffordable for many.
I mean to say: after a shock such as an Iranian takeover of the oil wells, the oil price will not stay as high as immediately afterwards for a very long time. But the fact that the price goes down then is not a good sign (except for those happy few still having jobs with good salaries), for it is the affordability that matters, and that has gone down.
If the initial oil-price-shock is bad enough (and it may well be), the financial system of the entire Western world itself may collapse. In that case prices, high or low, have no meaning anymore, except on the black market (for gold, silver etc.) Governments will distribute whatever oil there is (in sort of an emergency-communist way), as was done in many countries in World War II. And that has to be done then for many more goods, not just petrol.
And if indeed “peace is gone from the earth” in such a way that many countries prepare for more war, as is to be expected after an Iranian conquest, much resources will go to the militaries everywhere, decreasing what is left for civilians even more.
A too am very curious for this test of the signpost interpretation. Right now it still seems highly plausible.
I just saw today on cable news that Iran just unveiled a new VERY LONG range missile system. Its sights are just not on Middle East hegemony…they truly want to take out the USA to make them unresponsive to anything Iran does. It just confounds me how incredibly naive our national politicians are regarding Iran’s intentions and our passivity to take proactive measures and so utterly fail in these recent nuclear negotiations. It is as though we are inviting Iran to take us out and they may deliver on our negligence. Perhaps it is the calm before the coming storm. It may very well be that Iran takes a direct swipe at the US homeland before Obama leaves office!
Prices may eventually settle down, but keep in mind that with one quarter less oil for today’s world – on average – that is one quarter less energy, gasoline, food, tires, plastics, roof tiles, etc, etc. We really haven’t seen anything like this so when the Second Signpost strikes we will be in virgin territory oil-wise.
good points all, you may have hit a point good4U1, there is more than one way to take away peace from the world, if the US cant defend the free world the second horseman would have a free rein.
Then again Iran may not turn off the wells,they will require money to keep there empire going,with out petro money there empire will be short lived.
Thank you for this