Tag Archives: Gas

Oil Prices Fall Again After Last Week’s Surge

Oil Prices Fall Again After Last Week’s SurgeE

American producers decimated

stock market crash drop decrease

(Reuters) – Crude oil prices rose on Monday as investors shrugged off a U.S. refinery strike and focused on a falling U.S. rig count that signaled lower production down the line.

“There were a lot of people on the sidelines waiting for an opportunity to buy,” said Bjarne Schieldrop, chief commodity analyst at SEB.

“Brent has struggled sideways for a long time but it closed above the 20-day moving average on Friday for the first time since July, and the rig count is falling sharply. So now they think, maybe this is the time to buy.”

At 6:49 a.m. ET Brent crude futures were up $2.05 at $55.04 a barrel, after leaping as high as $55.62 and dipping as low as $51.41, as the bulls battled with the bears.

U.S. crude was up $1.50 at $49.74 a barrel, after touching an intraday high of $50.56 and slumping to $46.67.

Both contracts had rallied about 8 percent on Friday, fueled by month-end short-covering and a record weekly drop in the number of U.S. oil rigs employed, according to industry data from Baker Hughes. The count is now down 24 percent from its October peak.

“Most market observers have been surprised by the scale of the decrease, and expectations of U.S. oil output this year will no doubt be lowered accordingly,” analysts at Commerzbank said in a note. “The foundation for a steady price recovery in the second half of the year has thus been laid.”

However, in the short term the price increase has been exaggerated, as there is still considerable oversupply, they added.

Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said the bounce was mainly due to technical factors rather than any fundamental reason.

“I wouldn’t be surprised if this afternoon we sell into (the rally) because the global fundamentals in oil and the economy haven’t really changed much since last week,” he said.

On Sunday, workers at nine U.S. refineries and chemical plants went on strike in an effort to pressure oil companies to agree to a new national contract.

“So far only a handful of refineries have been affected, but the last time they went on strike like this, in 1980, it lasted for three months,” said Ole Hansen, senior commodity strategist at Saxo Bank.

Last week U.S. crude inventories hit a record high, and any dampening of refinery demand would likely push stocks higher as the slowdown in drilling has still not affected U.S. production, analysts said. [EIA/S]

“The market is likely too excited about falling rig counts,” analysts at Morgan Stanley said in a note on Monday. “The most productive rigs will likely remain as long as possible.”

Land Grab! Obama To Take Control Of ANWR

Land Grab! Obama To Take Control Of ANWR

ANWR Alaska oil gas drilling pipeline wildlife environment

President Obama announced Sunday that his administration plans to lock up the oil-rich 1.5 million acre Arctic National Wildlife Refuge coastal plain and offshore areas in Alaska from oil and gas exploration.

Obama is asking Congress to designate 12 million acres of ANWR as a “wilderness” to keep it off-limits to development, despite widespread Native Alaskan support for drilling in the area. ANWR’s coastal plain alone is estimated to hold 28 billion barrels of oil.

“Designating vast areas in the Arctic National Wildlife Refuge as Wilderness reflects the significance this landscape holds for America and its wildlife,” said Secretary of the Interior Sally Jewell.

The Obama administration argues that making ANWR off-limits to development will help protect the region’s wildlife and natural beauty. Obama is also considering ways to prevent new oil production at the National Petroleum Reserve-Alaska. Environmentalists have long campaigned to hinder oil production in Alaska.

ANWR Alaska oil gas drilling pipeline wildlife environment

“Just like Yosemite or the Grand Canyon, the Arctic National Wildlife Refuge is one of our nation’s crown jewels and we have an obligation to preserve this spectacular place for generations to come,” Jewell added.

But Alaska lawmakers were furious with the administration’s proposal — for decades Alaska Republicans and Democrats have been pushing for opening ANWR to drilling.

“What’s coming is a stunning attack on our sovereignty and our ability to develop a strong economy that allows us, our children and our grandchildren to thrive,” said Alaska Republican Sen. Lisa Murkowski. “It’s clear this administration does not care about us, and sees us as nothing but a territory.”

The Obama administration has already proposed designating 226 million acres of waters off Alaska’s coast as a critical habitat for the Arctic ringed seal. Alaska’s outer continental shelf is believed to be home to the world’s largest untapped oil and gas reserves. According to Alaska’s Resource Development Council, the outer shelf could hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

“The promises made to us at statehood, and since then, mean absolutely nothing to them,” Murkowski said. “I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.”

Alaska’s energy production has been hampered in recent years due largely to federal restrictions and adverse economics. In recent months, the state has seen its financial situation grow worse because of plummeting oil prices. At one point, the Trans-Alaska Pipeline used to transport some 2.1 million barrels per day. It now carries well under 1 million barrels per day. The pipeline has so far only carried oil from state lands, as federal lands have been off-limits. The pipeline will have to be shut down and dismantled if it drops below 300,000 barrels per day.

“This is the best news for the refuge since President Eisenhower established it in 1960 as the Arctic National Wildlife Range,” said Rhea Suh, a former Obama Interior Department official who is now president of the Natural Resources Defense Council. “It’s a national treasure worthy of the highest protection available for our public lands.”

Environmentalists have been keen on slowing down the flow of oil through the pipeline to make it uneconomical and impractical to get oil from Alaska. Eco-activists have labelled Alaska a ground-zero for global warming, saying shrinking sea ice levels are harming polar bears, wildlife and Native Alaskans — despite evidence to the contrary.

US Oil Company Plans To Slash 9,000 Jobs Due To Gas Prices

US Oil Company Plans To Slash 9,000 Jobs Due To Gas Prices


Schlumberger Limited. (NYSE:SLB) on January 15 announced to cut 9,000 jobs amid falling crude oil price. The largest oil service provider employs a global staff of 123,000 and the reduction in the workforce would represent a 7.3% cut.

Schlumberger released earnings report on Thursday and announced that it had undertaken charges of $1.77 billion in the fourth quarter last year. These charges included currency devaluation of Venezuela, job cuts, and impairment charges related to its seismic business.

Oil price since summer of 2014 have tumbled over 50%. The price that was hovering around $115 per barrel is now below $50. The US benchmark of crude oil, West Texas Intermediate (WTI), and Brent crude, the global benchmark for crude oil, was trading at $46.6 per barrel and $48.5 per barrel, respectively, during pre-market hours at 2:28AM EST.The company over the last ten years had doubled its workforce and clearly had not anticipated the crude oil price to be as low as they are today.

Due to falling oil processes, demand for Schlumberger’s services which include drilling and fracking services is expected to fall drastically. Major energy customers of Schlumberger in the US and Canada are expected to reduce their capital spending by 30-35%, according to Credit Suisse energy analyst James Wicklund.

Analyst at Cowen Group Inc Jim Crandall expects global capital spending to fall 17% year-over-year to $571 billion. According to Wells Fargo, the number of the rig counts is expected to fall to 750 in 2015. According to Baker Hughes Incorporated (NYSE:BHI), the number of rigs in operation was 1,744 at the start of this year. The fall in rig count will represent a decline of 43%.

The fall in oil price though beneficial to consumers is proving to be detrimental for the people who are being laid off. If this particular trend continues in the future, more layoffs can be expected.

Another oil service provider to announce job cuts last month was Halliburton Company (NYSE:HAL). It announced to slash around 1,000 employees amid the oil price. WTI during that time was below $59. The company had just finished merger talks with Baker Hughes at that time and had announced earlier that no layoffs would be made.

In addition to the falling oil price, unrest in Libya, along with the western sanctions imposed on Russia are some reasons for the company reducing its staff. The energy service companies on the Standard & Poor’s Index have fallen over 20% compared to the fall of 18% for the oil producers. Repercussions of lower crude oil price were also the first to impact these oil service companies.

BP plc (ADR) (NYSE:BP) has cut back on in its capital spending for this year and labor force amid the falling oil price. BP has divested assets worth $43 billion to help counter the scenario and has also announced major layoffs in its North Sea operations .

Edward Jones analyst Rob Desai has indicated that the year will be a rough one for Schlumberger. He has urged the company to tackle the current situation it faces aggressively. CEO Paal Kibsgaard has indicated that the company is trying its best to tackle the situation and deal with factors that are in the company’s control.

The situation indeed is tough for the company ahead. There is no stopping decline in oil price, which have fallen 50% since June. Although capital spending has declined, companies have reported rising production due to their focus on core and more efficient wells. Organization of Petroleum Exporting Countries has announced to maintain production at 30 million barrels per day.

However, oil production definitely needs to be reduced to prevent the price from further going down.Schlumberger stock dropped 2.25% to $76.63 when the market closed yesterday.

Court, not Congress, raises pressure on Obama To Approve Keystone Pipeline

Court, not Congress, raises pressure on Obama To Approve Keystone Pipeline

By Elana Schor, politico.com

Miles of pipe ready to become part of the Keystone Pipeline are pictured. | AP Photo

President Barack Obama may be closer than ever to deciding the fate of the Keystone XL pipeline.

That has more to do with the Nebraska Supreme Court than pressure from congressional Republicans, whose Friday passage in the House of a bill to push forward the long-delayed pipeline fell well short of a veto-proof majority.

The Nebraska court preempted the House vote by issuing its ruling early Friday that upheld the state’s law that fast-tracked a new route for the $8 billion oil project. The ruling effectively forces the the Obama administration to resume its years-long review that will ultimately determine whether Keystone is in the nation’s interest.

Keystone Pipeline Map
Keystone Pipeline Map

Related: What Is The Keystone Pipeline And Why Important To Americans?

As expected, the House easily passed its bill that would circumvent that process, but only 28 Democrats joined Republicans, putting the ‘yes’ votes in the lower chamber at 266. That’s five more than the last time the House passed a Keystone measure, but dozens of votes short of the support needed from Democrats to guarantee the bill would overcome the veto that the White House has promised.

Undeterred, Republicans vowed to force Obama to uncap his veto pen for only the third time in six years.

“What we’re trying to do is get to the point where the president has to make a decision,” said Rep. Pete Sessions, the Texas Republican who chairs the Rules Committee. “If he says he’s going to [veto] it, let’s give him a chance.”

The White House reiterated its veto threat on Friday after the Nebraska court ruling, saying Congress wouldn’t stand in the way of the review being conducted by the State Department. “We are going to let that process play out,” Obama spokesman Eric Schultz said.

But how long that process will take is not clear, and a 2004 executive order gives Obama no deadline to decide on a border-crossing permit for the $8 billion Alberta-to-Texas pipeline even after the State Department issues its recommendation.

Pipeline supporters’ chances of winning a veto showdown with Obama appeared slim on Friday, even after a court ruling that Keystone backers had hoped might sway new Democratic votes.

Of the 28 House Democrats who voted with all but one Republican on Friday to force Keystone approval, three are new in the yes camp: Reps. Brad Ashford (D-Neb.) and Gwen Graham (D-Fla.), both freshmen, and Rep. Kurt Schrader (D-Ore.), who has previously said he supports the pipeline in principle.

Two other Democrats, Reps. Jim Costa (D-Calif.) and Cheri Bustos (D-Ill.), who had voted against Keystone in November after offering support two years ago, moved back into the yes column on Friday.

Still, Republicans need roughly 290 to override an Obama veto, a mark the Democrats vowed they would never reach.

“We’ll definitely be able to uphold a veto,” said New Jersey Rep. Frank Pallone, the Energy and Commerce Committee’s top Democrat. “I’m confident.”

Arizona Rep. Raul Grijalva, the Natural Resources Committee’s top Democrat, predicted that a strong minority front to uphold a Keystone veto would set the tone for the entire 114th Congress.

“This is going to play out in a variety of other issues as we go along,” be it on education, highway trust fund or otherwise, Grijalva said in an interview. “While they have historic numbers, if the president moves to veto, we’re still in position to keep the worst from happening. … It’s not just XL now, it’s about party unity now as well.”

Five of the 31 House Democrats who voted to approve the pipeline in November have since left Congress. In the Senate, where the pro-Keystone bill is set to clear its first procedural hurdle Monday ahead of what likely to be a contentious open amendment debate, Republicans appear to be four votes short of the 67 needed to override a veto.

“I don’t think it’s going to happen,” Senate Minority Leader Harry Reid told Nevada radio station KNPR on Friday, adding he is “confident the president will veto it and, good, I hope he does.”

Republicans counter that all they need is time for the pro-Keystone arguments on economic and energy-security benefits to peel more Democrats away from Obama.

“Labor Dems are starting to turn the corner here,” one House GOP leadership aide said by email, “and I suspect the pressure to support this bipartisan jobs project back home will continue to grow.”

Unions that have long urged approval of Keystone seized on the Nebraska decision in urging Democrats to push the pipeline forward.

“The greenlight for the Nebraska route should certainly cause some Democrats to pause and realize the roadblocks they’ve been hiding behind are falling away,” Laborers International Union of North America General President Terry O’Sullivan said in a statement. “There’s really no excuse for a no vote.”

For Keystone sponsor TransCanada, whose pipeline proposal sparked the political tempest over climate change, jobs and the tradeoffs between economic growth and environmental protection, the Nebraska court case represented a major victory.

The company’s CEO, Russ Girling, told reporters Friday that the State Department’s process would resume about halfway through the 90-day window it has to render a “national interest” ruling on Keystone, meaning that final approval could come within “the next couple of months.”

But State spokeswoman Jen Psaki told reporters today that she could not offer specifics on when the Keystone review would wind down, saying only she did not expect the process to last beyond the end of Obama’s term in 2016.

As for Congress’ effort to push a veto showdown over Keystone with Obama, Girling was more circumspect.

“We’ve tried to not to get involved in the political process,” the TransCanada CEO said, “but what we’ve said as well is that we welcome all opportunities to put this to a positive conclusion.”

Sen. Schumer lays out battle over Keystone pipeline

Sen. Schumer lays out battle over Keystone pipeline

Keystone Pipeline
Keystone Pipeline

Sen. Chuck Schumer, D-New York, said Democrats have enough votes to support the president if he vetoes a bill to begin construction on the Keystone XL pipeline.

“I think there will be enough Democratic votes to sustain the president’s veto,” said Schumer, the number three Senate Democrat, on “Face the Nation” Sunday.

Related: What Is The Keystone Pipeline, And Why Is It So Important?

The Senate narrowly defeated a bill to fast track construction of the pipeline after the House passed it in November. After the vote, Senate Minority Leader Mitch McConnell, R-Kentucky, pledged it would be the first bill he takes up when Republicans assume control of the Senate later this month.

Despite Schumer’s belief that President Obama would veto the bill, he said that when it comes to the floor, Democrats still plan to offer a series of amendments to make it “more of a jobs bill.”

“Our Republican colleagues say that this is a jobs bill but that really is not true at all. By most estimates it would create several thousand temporary construction jobs and only 35 permanent jobs,” Schumer said.

The amendments his party might offer include requirements that the steel used in the pipeline be made in America and that the oil that is transported through it be used in America. They would also likely introduce an amendment to create clean energy jobs.

“Why create very few jobs with the dirtiest of energy from tar sands when you can create tens of thousands more clean jobs using wind and solar?” Schumer said. “Our Republican colleagues are doing what they always do: they’re appeasing a few special interests — in this case oil companies and pipeline companies and not really doing what’s good for the average middle class family in terms of creating jobs.”

As for how the amendments could affect the president’s response to the bill, he said, “These amendments will make it better but certainly not good enough at this point in time.”

Did Cuba cozy up to the U.S. over oil? Some experts think so

Did Cuba cozy up to the U.S. over oil? Some experts think so

The State Column

oil rigs wells pumps gas prices
Cubans are hoping it could help economically by encouraging U.S. businesses to take advantage of oil and gas basins off of Cuba’s northwest coast.

The sudden turnaround on United States and Cuba relations may have a more economic driver: falling oil prices.

Cuba has relied on the support of oil powerhouses like Venezuela and Russia for years, but the dip in oil prices may indicate that Cuba won’t be able to receive as much economic support from them as in the past, according to an Associated Press report.

The warming of relations between the U.S. and Cuba may have been a long time in the making, with this simply marking the perfect timing to open up relations once again. On the U.S. side, experts believe that it benefits Barack Obama politically, to further cement his legacy as his tenure as president winds down.

Cubans are hoping it could help economically by encouraging U.S. businesses to take advantage of oil and gas basins off of Cuba’s northwest coast. Still, even if restrictions on U.S. businesses are relaxed, there are likely better drilling opportunities in other areas of the world, and thus an oil boom is unlikely. However, every little bit helps for the struggling Cuban economy, and new relations with the United States could signal a new era.

The U.S. embargo has keep businesses with a great amount of deep-water drilling technology and experience from accessing Cuban oil reserves, meaning the island nation produces a measly 55,000 barrels of oil per day, a third of which comes from a Canadian firm. Cuba uses 155,000 barrels per day, and has relied on Venezuela to make up the rest. To give an idea of how little oil Cuba harvests, just one deep water Gulf of Mexico drilling platform pulls in 200,000 barrels per day.

The new relations could have ramifications for Russia’s presence in the region, or Russia’s relations with key South American ally Venezuela — or Cuba itself.

However, many experts noted that Russia has already disentangled themselves from the region for the most part.

Despite the new relations, the embargo against Cuba remains, and experts don’t think it is likely that the Republican-led Congress will lift it without Cuba agreeing to some concessions.

Early gift: Gas below $2 at some stations in 24 states

Early gift: Gas below $2 at some stations in 24 states

Just in time for the holidays, gas prices drop to below $2 a gallon in some parts of the country. Linda So reports.

low gas prices
(Photo: Valerie Mosley, Springfield (Mo.) News-Leader)

SPRINGFIELD, Mo. — Just in time for a holiday road trip, gas prices in many places in middle of the country have dipped below $2 a gallon.

And here in Missouri, close to the geographic center of the USA, is where drivers can find the cheapest gas as of Friday, according to GasBuddy.com.

“As of this morning, there are 24 states with prices under $2 a gallon. But Missouri is lowest,” said Patrick DeHaan, GasBuddy’s senior petroleum analyst.

In Springfield, gas prices at some locations have dipped to $1.96 for a gallon of regular unleaded. They’ll continue to drop for a while, DeHaan said.

Some surrounding towns like Republic and Nixa typically have even lower prices than Springfield. The last time gas hit $1.99 a gallon in Missouri was June 2009.

“It’s not guaranteed, of course. But we think they’ll drop a little more, 5 to 15 cents a gallon,” he said.

Areas east of Nashville, Tenn., also are reporting prices of less than $2.

“The gas at my exit, Stewarts Ferry Road (off Interstate 40), is $1.99,” said Doak Turner of Nashville. “Three stations next to each other is great!”

American Automobile Association travel analysts estimate that current gas prices, which are at their lowest since 2008, are likely to drop as much as 7 cents by Christmas and possibly 7 more cents by New Year’s.

Because of higher fuel taxes, some states won’t crack the $2 barrier, DeHaan said.

Thirteen states, many in the South, have gas taxes of less than 40 cents a gallon, according to the American Petroleum Institute. Seventeen states’ gas taxes are more than 50 cents a gallon.

Among the states with the highest gas taxes: California at 68.87 cents, New York at 68.65 cents and Hawaii at 66.29 cents. The rock-bottom lowest gas tax? Alaska at 30.8 cents a gallon. The federal portion of that pie is 18.4 cents.

In Chicago, where DeHaan is based, the price of regular unleaded was $2.74 a gallon. Illinois’ gas tax is 57.5 cents a gallon vs. 35.7 cents in Missouri.

“I wish, but it’s not going to happen,” DeHaan said of $2 gas in the Chicago area. “There’s no way oil producers would continue producing at 99 cents a gallon. At that price, it’s more expensive for them to just pump the oil.”

But prices below $2 are possible in some high-tax states. Some Citgo stations in Western Michigan, where taxes are 57.43 cents of the per-gallon price, popped below $2 Tuesday.

“My manager came in and changed it. Everyone went crazy,” said Jessica Henke, a Citgo employee in Greenville, Mich. “I had one lady come in and hand me $10 to fill up her truck. She couldn’t believe it.”

Regular unleaded gas prices peaked this year in late June at about $3.70 a gallon nationwide, according to the U.S. Energy Information Administration. This week the nationwide average is $2.55.

The most recent gas-price plunge was triggered in September when Saudi Arabian oil officials voluntarily cut crude oil prices, DeHaan said.

The average car has a 12- to 15-gallon tank, so customers are keeping at least $14 to $17 more in their pockets now compared with six months ago. SUV and truck owners, the ones with even bigger tanks, are feeling even richer after a trip to the pump.

“It doesn’t take me much gas to go back and forth to work,” said Kathleen Sagitano, who was filling up on $1.99 gas at Fuel City in Dallas. “But still, if I can fill my tank up just once a week, that’s awesome! It’s really great. Now I wish I had a four-door truck.”

That’s the double-edged sword for many economists. People feel better off when gas prices are lower because they have more money left at the end of the week, but cheap gas also brings back a longing for bigger, less-efficient vehicles and more travel, which in the long run can hurt the environment.

Don’t expect these exceptionally low prices to last, DeHaan said. Refineries will begin switching to a more expensive summer blend of gasoline in mid-spring, which they do every year to reduce air pollution, and that higher-priced fuel will work its way to the pumps by June 1.

Contributing: Jordan Buie, The Tennessean; Christopher Zoladz, WZZM-TV, Grand Rapids-Kalamazoo-Battle Creek, Mich.; and Carla Wade, WFAA-TV, Dallas-Fort Worth.

Lower crude prices challenge Keystone pipeline

Lower crude prices challenge Keystone pipeline


Backers of the Keystone XL pipeline became emboldened recently by the prospect of a Republican-led Congress finally pushing the project through.

But can dropping crude prices punch a hole in the controversial project?

Related: What is the Keystone Pipeline?

The cost of benchmark West Texas Intermediate oil dropped to $74.42 a barrel on Thursday — a 25% drop from the triple-digit highs it reached this summer. Federal analysts have warned that producers in the Canadian oil sands — slated to be a top consumer of the pipeline — will need oil prices to stay between $65 and $75 a barrel to make production there economically feasible.

“Assuming prices fell in this range, higher transportation costs could have a substantial impact on oil sands production levels — possibly in excess of the capacity of the proposed project,” said a U.S. State Department report on the pipeline released in January.

The 1,179-mile pipeline extension would carry tar sand oil from Canada to Nebraska, then be transported to refineries in Texas. It could carry some 830,000 barrels each day. President Obama has said he’ll approve the project only if it doesn’t “significantly exacerbate” the problem of carbon pollution. His administration is still studying the project.

But some members of Congress, led by Sen. Mary Landrieu, D-La., are moving ahead with efforts to immediately authorize Canadian firm TransCanada to build the pipeline. Lawmakers could vote on the issue as early as next week.

“We’re in this interesting place where we have this push by Congress for the project at a time when the marketplace is telling us we don’t need this new oil,” said Anthony Swift, a staff attorney for the National Resources Defense Council, who has opposed the project. “The reality is tar sands crude only makes sense in the world of expensive oil. That’s not the world we’re likely to be in in the near or immediate future.”

Needed or not, the sands-oil reserves in Alberta in Western Canada will likely continue producing crude into the foreseeable future, said Dinara Millington, vice president of research at Canadian Energy Research Institute, a Calgary-based independent, not-for-profit research group.

The break-even price to develop new greenfield projects at the reserves is at around $85 per barrel, so current crude prices could deter new projects, she said. But existing producers can continue pumping oil there at relatively low costs, Millington said. The oil-sands produce around 2.1 million barrels a day.

Also, conventional producers farther west in British Columbia and Saskatchewan will also be able to use the pipeline, bolstering its demand, she said.

“There’s enough demand and supply fundamentals to make the economic case for the pipeline to be built,” Millington said.

Customers to the pipeline have long-term contracts in place — some as high as 25 years — and its construction or use will not be impacted by the rise and fall of crude prices, Shawn Howard, a TransCanada spokesman, said in an email. He points out that customers did not shy away from the project when crude hit lows of $33 and $37 a barrel in 2009.

“Interest from customers to ship and receive oil through both Keystone XL remains strong and we continue to have a waiting list if space on Keystone XL becomes available,” Howard said.

Still, the fact that crude is relatively cheap and there’s more of it today than in recent years should shelve the project altogether, Swift said.

“We are in a dramatically different environment than we were in when Keystone was proposed in 2008,” he said. “We don’t need to consider paying that (environmental) cost.”

Obama, Russia, Guns, Vodka, and Oil

Obama, Russia, Guns, Vodka, and Oil

by Absolute-News.com

Ak47 rifle
Russian AK-47 rifle

A few days ago Obama signed an Executive Order banning the Russian made Ak-47 assault rifle.  His publicly stated intent was to hurt Russia.  His real reason was to take away gun rights from Americans under the disguise of an international crisis.

Related: Obama Signs EO to Ban AK-47 Guns

This “sanction” against the Russian manufacturer will have a very small impact to the Russian economy if any.  It will however have a long-term effect on US gun rights as we will never see this “law” reversed.

If Obama really wanted to hurt Russia with sanctions, he would have asked Congress to pass laws to ban Russian oil and vodka.  Oh, wait, Congress doesn’t write laws anymore: Obama is writing all the laws with Executive Orders so…

Obama should have written an Executive Order to ban Russian oil and vodka imports.  This would be a HUGE impact to Russia especially the oil.

Russian Vodka
Russian Vodka

The US imports a lot of oil from Russia.  So does Europe.  This is why both countries have been very timid on Russia’s invasion into the Ukraine and it’s seizing the Ukrainian province, Crimea. (see story) (What is Crimea?)

If these the US and Europe get too ugly with Russia’s Putin, he will simply turn off the oil supplies.  He has already done so on several occasions with Europe in order to let them know he’s the boss.   With many oil pipelines coming out of Russia, some through Ukraine, it is very easy to shutdown the supply of oil to Europe.

Russian Pipeline
Russian Pipeline

For the US, we do NOT need Russia’s oil.  Well we don’t, sort of.

Recently it has been determined that the US has HUGE amounts of oil…enough to last hundreds of years.  The problem is Obama has placed very strict restrictions on drilling.  So, the US is sitting on lots of oil but our government just won’t let us get it.  (see story)

Facts: See Dept of Energy (DOE) Oil Imports Chart

Now the great thing about Russian oil is that Putin’s billions of personal wealth has come from selling Russian oil. So, when you pump gas into your vehicle, part of that money eventually makes its way to Putin.  We/You are funding Russia and Putin.

After Canada and Mexico, Russia is the third largest non-OPEC source of US imports of oil per the DOE.

Regarding vodka, we import a lot of vodka but we also produce a lot within the US.   The Lone Star State of Texas alone has some great vodkas with Tito’s being voted the World’s best vodka.

Obama could write an Executive Order banning Russian vodkas that would not only punish Russia on a larger scale than AK-47’s but also help US vodka distillers make more local vodka.  Once people switched to US vodkas, this would be a longer lasting financial infusion into the US’s economy.

If Obama were serious about hurting Russia, banning oil and vodka would have a much greater effect.

Texas vodka
Texas vodka

Now you know that Obama does not intend to hurt Russia with sanctions, he intends to take away gun ownership rights for Americans.  On the surface this Executive Order might seem a “valid” international sanction against Russia, but its true intent is to take rights away from Americans.