The rise and fall of oil price

[FrieFrench]

The price of oil has plummeted by more than a quarter since June but will Opec, which holds 60% of the world’s reserves and 30% of supplies, cut its own production to try to lift prices?

Will the cartel allow a further slide from the current price, which fell to just under $80 a barrel at one point last week, in the hope of making it impossible for US drillers to make a profit from their wells, and so driving them out of business?

There is a surplus of geopolitical risk in the world, but a greater surplus of oil. Something had to give, and that something has proved to be the oil price. Its dramatic 25%t plunge reflects the reality of a new era in world oil, one defined by a resurgence of North American supply.

Via The rise and fall of oil price

 

[Vinayak1000]

Energy investors have become very worried with what is transpiring in the oil market. But remember the oil market is cyclical. One thing that Americans were worried about is whether the shale production would be affected by the dramatic dip in the oil price. I don't think this will happen as shale oil production continues to be profitable even at prices as low as $50/barrel.
The technology is getting better and it is becoming more efficient to do oil drilling in the U.S. oil fields. Shale technology is definitely improving making it a good alternative.
The U.S. boasts of a profound economic leverage with a vast scale and diversity of hydrocarbon infrastructure. The U.S. has dozens of world-class fields, thousands of production companies, tens of thousands of related businesses, and millions of miles of pipe and rail.
The massive supply of oil is expected to stay the same at least for another decade.
In other oil news, US 'planning to bomb oil pipelines' to halt jihadists' funding. This is because Islamic State is believed to be making $2m a day in illicit oil sales.

 

[Pat Riley]

The price of oil has plummeted by more than a quarter since June but will Opec, which holds 60% of the world’s reserves and 30% of supplies, cut its own production to try to lift prices?

Will the cartel allow a further slide from the current price, which fell to just under $80 a barrel at one point last week, in the hope of making it impossible for US drillers to make a profit from their wells, and so driving them out of business?

There is a surplus of geopolitical risk in the world, but a greater surplus of oil. Something had to give, and that something has proved to be the oil price. Its dramatic 25%t plunge reflects the reality of a new era in world oil, one defined by a resurgence of North American supply.

Via The rise and fall of oil price

Tha Saudis are the only ones in OPEC holding out against reducing supply to bump the price. This is probably a good idea as OPEC isn't the only game in town any more. They reduce output, all the newer suppliers increase theirs or at the very least cash in on higher prices while holding production at the same levels. The only losers are the consumers - and OPEC. OPEC have to try and get the non-OPEC producers in bed with them or at least have an informal agreement to line up with them for this game to continue to work.

All this manipulation of supply in order to control price and profits, it's a sin I tell ya.

 

[NVP]

my first corporate role was in the oil business ...........

read the seven sisters.......you will never consider the mafia as criminals again ........

N

 

[Pat Riley]

my first corporate role was in the oil business ...........

read the seven sisters.......you will never consider the mafia as criminals again ........

N

Amen to that.

I've always felt organised crime does a better job of managing resource than any government department - and far cheaper too. Not just in Italy or the US either. The Rusko mafia do a fantastic job in a culture which is predicated on trying to survive in spite of the system. They've weathered communism, perestroika and proto-capitalism and still manage to provide the population with a steady supply of goods which the government could never hope to achieve.

Be useful in the UK in the current spirit of devolution to have a few test cities where all services and goods are provided and managed by self-serving, psychopathic war-lords presiding over their own little fiefdoms and operating the who shebang on a commercial basis. I'm betting the population this served would get a better deal. The benefits side would certainly be means tested like never before! LOL.