Federal interest rates raise the price of oil. For every quarter of a percent raise in rates, the effect on oil is about $1 increase per barrel. To reduce rising inflation, Feds will need to slowly raise interest rates to 5% or 6% which will equate to about a $20 increase per barrel. China's oil and gas fields are ageing and they do not have the workers to quickly drill new wells and forecast a decrease in production of 1 million barrels per day by 2018- 2020. However, China must comply with global warming regulations and reduce dependency on coal fired generating facilities. So, China's demand will slowly increase while their O/G production slowly decreases. Hopefully, we will see a $10 increase in oil prices due to China's influence. In addition, the US dollar may cease to be the world oil trading currency and the US Feds will have to raise interest rates faster to encourage the purchase of US treasuries to secure our World economic rating. The fast rising rates may cause a knee jerk reaction and oil will go higher than expected. $80 to $100 is possible by 2020, so value your minerals accordingly.
Well all mineral rights owners should also consider the large increase in value of these minerals due solely to the increased production amount of barrels per day. For what use to be a 100 BPD wells are now from 1000 to 4600 BPD as well the multiple wells that they are now drilling up to 32 wells per section. So if you consider that just a year or so ago they were paying $1000/ nma with a 1/4 RI. for just a single well per section you now should get 32 times that. So the lease amount for today's minerals should be times the number of wells they drill on that section. So if $1000/ nma for one it should be $32000/ nma for 32 wells. So given all of this our minerals value has increased very significantly and all should consider this before leasing their minerals. If we all stick to our guns here we will all profit and get a fair amount for our minerals once and for all. For the profits of the oil companies will increase very significantly as well, like billions more maybe even trillions. So lets get our fair share.
I'll start from the bottom up.
Chinese yuan officially became a world reserve currency on November 30, 2015. It represents 10.92% of the IMF's Special Drawing Rights currency basket. This makes Chinese yuan the fifth reserve currency after US dollar, Euro, British pound sterling and Japanese yen.
A report released by the United Nations Conference on Trade and Development in 2010, called for abandoning the U.S. dollar as the single major reserve currency. The report states that the new reserve system should not be based on a single currency or even multiple national currencies but instead permit the emission of international liquidity to create a more stable global financial system.
Countries such as Russia and the People's Republic of China, central banks, and economic analysts and groups, such as the Gulf Cooperation Council, have expressed a desire to see an independent new currency replace the dollar as the reserve currency.
On 10 July 2009, Russian President Medvedev proposed a new 'world currency' at the G8 meeting in London as an alternative reserve currency to replace the dollar.
According to economist Michael Hudson, China has said, "we don't want to make any more foreign exchange reserve of any paper currency, because all the paper currencies are government debt currencies." China, Russia, India, Turkey, Brazil, Venezuela and other oil-producing countries have recently agreed "to transact all of their mutual trade and investment in their own currencies" effectively minimizing the need, at least in the short term, for a global reserve currency. Nevertheless, at the beginning of the 21st century, gold and crude oil were still priced in dollars, which helps export inflation and has brought complaints about OPEC's policies of managing oil quotas to maintain dollar price stability.
Some have proposed the use of the International Monetary Fund's Special Drawing Rights (SDRs) as a reserve
China has proposed using SDRs, calculated daily from a basket of U.S. dollar, euro, Japanese yen and British pounds, for international payments.
On 3 September 2009, the United Nations Conference on Trade and Development (UNCTAD) issued a report calling for a new reserve currency based on the SDR, managed by a new global reserve bank. The IMF released a report in February 2011, stating that using SDRs "could help stabilize the global financial system
SDRs were created by the IMF in 1969 as part of the Bretton Woods System. Under this system only certain countries can belong to the SDRs elite group. China's currency, the renminbi, officially became part of the SDR club on September 30, 2016.
The US dollar is still the currency for trading gold and most oil. However, Iran, OPEC's second-largest producer, has completely stopped conducting oil transactions in U.S. dollars and Iran's oil is sold in euros, but both euros and yen are paid for Iranian crude in Asia. Asia is now the World's largest importer of oil. http://time.com/3853451/china-crude-oil-top-importer/
China's water problems are their earthquake problems too, but current O/G technology is creating waterless fracking.
China's fault lines create problems when using hydraulic fracking. The Chinesse government in 2004, had ascertained the location of the faults in the 21 cities," Xu Xiwei, deputy director of the Institute of Geology at the China Earthquake Administration was quoted as saying by state-run daily Global Times. "Of the 130 fault lines, 80 were deemed inactive," he said. The USD 76 million project, which concluded in April 2008, was aimed at evaluating potential earthquake risks in densely populated cities in order to help institute safety measures. Some 26 faults in the pilot cities were found to have active fault lines. For more information contact: Gao Shu, dean of the School of Geographic and Oceanographic Sciences at Nanjing University.
One San Antonio company, Black Brush Oil & Gas LP, is replacing water with a butane-rich mix to avoid the costs of moving and disposing of large amounts of water.
Butane is already present at the well site, and an additional advantage, according to Lobet's report, is that the butane-oil mix used for fracking can later be sold as oil.
Also, there is a non-flammable propane stimulation solution developed in 2013.
The US Federal Reserve:
Among the Fed’s main duties is its responsibility to make sure the money supply doesn’t grow too quickly or too slowly. It uses monetary policy to control that growth.
Monetary policy consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault (bank reserves).
The Federal Reserve is in charge of the United States' monetary policy.
The correlation between interest rates and the market price of oil:
The simple rule of thumb is that a positive oil production shock lowers oil prices while a positive shock to real economic activity increases oil prices. An increase in the Federal Reserve Funds rate makes it more expensive to borrow and makes oil cheaper. The subsequent drop in production, however, eventually puts upward pressure on prices until the market finds a relative equilibrium. Market equilibrium occurs when there is not shortage or surplus of a product.
"Oil Price Shocks and Policy Uncertainty: New Evidence on the Effects of US and non-US Oil Production"
See Working Paper No 0295-dallasfed.org
Historically, oil has been priced in dollars, however, China and Russia have been buying oil with gold which deals a blow to the position of the US dollar as the oil pricing currency, because the US and many other countries abandoned the gold standard. Currently, it's a big secret as to how much gold is actually being mined, so the price of gold is highly unstable. To further the advance of gold and it's affect on currencies and oil, China, India, Russia, are hording gold. Many advocates of the gold standard propose using a combination of Bitcoin for the internet and treating gold in tax terms as currency. CNBC reports: "In 2015 the Bitcoin was classified as a commodity just like oil or gold. In August 2013, the German Finance Ministry classified it as a "unit of account", meaning it is can be used for tax and trading purposes in the country and is like "private money." http://www.cnbc.com/2015/09/18/bitcoin-now-classed-as-a-commodity-in-the-us.html
You have presented no references to support your statements and claims, so would you please cite all the references you have used to formulate your personal opinions. I enjoy reading highly supported and well documented reports also. Thanks and have a good day.