A barrel of oil has dropped in price globally by more than 30% since June, 2014.
Why?
Not because of "free market capitalism" - there is no supply vs demand explanation.
Mr. Putin suggests the price drop is a political maneuver by the West to bankrupt Russia [1] - another sanction for Ukraine. [2]
Is the drop in oil prices a maneuver by the established fossil fuel folks to knock down fracking and gas fuel for home heating and electrical generation?
When is the best time to kill a new technology/new competitor? (like Tesla) (like community wifi) ( like wind generated electricity) (like roof top distributed solar)
The best time to annihilate a potential competitor is when they get up and running and begin to significantly impact the income stream/profits of the legacy business. WRONG
The best time to wipe away a potential competitor is as sooooon as you see that they have a smarter, more efficient product than the obsolete/fossilized legacy product.
Examples?
The compact fluorescent bulb patented by GE and never produced by GE.
“The spiral CFL was invented in 1976 by Edward E. Hammer [5], an engineer with General Electric,[6] [6] in response to the 1973 oil crisis [7].[7] [8] Although the design met its goals, it would have cost GE about $25 million to build new factories to produce the lamps, and thus the invention was shelved.[8] [9] The design eventually was copied by others.[8] [9] In 1995, helical CFLs, manufactured in China, became commercially available.[9] [10] Since that time, their sales have steadily increased.” See Wikipedia link here [11]
One rationale explanation for the spectacular drop in oil prices is that the established players are trying to kill a newbie. Who is the new competition?
What do you think?
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