OPEC Policy Ensures U.S. Shale Crash

I think this oil price war will budge out the oil-killer technologies

China has been buying large amounts of gold at higher prices.

With this drop in oil prices the price of gold will drop or crash.

This will really hurt anyone selling oil for gold.

Who cares about the price of oil when you are going after the drinking water by pumping fracking chemicals into the water table.

Ho dear, what a shame so we brought shares in bottle water drinks company and can get away with it because we have special laws protecting us from prosecution.

What goes down must come up !

a reply to: VirusGuard

sir with a reply like that are you oil tycoon tbo pickens

originally posted by: FarleyWayne
PERSONAL-ASSUMPTION: Sheer-Panic is occuring on Oil-Street.

Why? This is the oil price and the lower it goes the better it impacts on Western economies. The price of oil is falling as there is over-supply in the system. If OPEC wants to flood the market, then that's good - it's bad for Russia and Venezuela and other nations whose extraction costs are high, or who need to have the price of oil maintained at a high level, but that's global economics for you. The oversupply is largely due to Libyan oil terminals coming back on line, apparently.

The US fracking industry will probably weather this storm as they are in it for the long-term and besides, the average extraction costs are 60 dollars a barrel, depending on the source.

As a side note - it's lucky Scotland did not become independent after all as all the nationalist plans were rooted on a high oil price!

Regards

Didn't this happen in 2008, like to the tune of $40/barrel? How did that affect our economy? It literally affected everything! History repeating itself. So I am wondering what happens in 2015 say if the prices continue to drop? Does that mean these current futures will be underwater so to speak? This market is confusing. They bet on the hopes of the price staying the same or doing better I suppose.

December 2014 OIL & Gas Futures



Current Previous Change ($) Change (%)
NYMEX Crude Oil ($/BBL) 67.11 78.97 -11.86 -15.02%
ICE Brent Crude Oil ($/BBL) 72.86 87.48 -14.63 -16.72%
Light Louisiana Sweet Crude Oil ($/BBL) 69.79 81.80 -12.01 -14.68%
Dubai Crude Oil ($/BBL) 70.30 87.48 -17.18 -19.64%
NYMEX U'___' ($/Gal) 2.1500 2.4834 -0.3333 -13.42%
NYMEX U'___' - Brent Crack ($/BBL) 17.45 15.31 2.1308 13.91%
NYMEX RBOB Gasoline ($/Gal) 1.9390 2.2397 -0.3007 -13.43%
NYMEX RBOB - Brent Crack Spread ($/BBL) 8.58 7.49 1.9959 26.66%
ICE Gasoil ($/MT) 674.14 765.51 -91.38 -11.94%
ICE Gasoil - Brent Crack Spread ($/BBL) 17.63 16.55 1.08 6.54%

originally posted by: paraphi

originally posted by: FarleyWayne
PERSONAL-ASSUMPTION: Sheer-Panic is occuring on Oil-Street.

Why? This is the oil price and the lower it goes the better it impacts on Western economies. The price of oil is falling as there is over-supply in the system. If OPEC wants to flood the market, then that's good - it's bad for Russia and Venezuela and other nations whose extraction costs are high, or who need to have the price of oil maintained at a high level, but that's global economics for you. The oversupply is largely due to Libyan oil terminals coming back on line, apparently.

The US fracking industry will probably weather this storm as they are in it for the long-term and besides, the average extraction costs are 60 dollars a barrel, depending on the source.

As a side note - it's lucky Scotland did not become independent after all as all the nationalist plans were rooted on a high oil price!

Regards

It is my assumption (which could be waaaayyy off base) that the US counted/betted on a certain price per barrel and if OPEC floods the market with their cheap oil then US oil has to sell at the lower price as well, which if they bet on $90 a barrel and it sells for $40, they are going to lose their shirts, bankruptcy.

a reply to: TM62

The loss of a bunch of traders betting on the price of oil would be no loss to the economy. May even do it some good. However, as with all games in a casino, the banker always wins in the end.

Regards

originally posted by: paraphi
a reply to: TM62

The loss of a bunch of traders betting on the price of oil would be no loss to the economy. May even do it some good. However, as with all games in a casino, the banker always wins in the end.

Regards

Yes most definitely! I know the airlines would be in a fix since they depend on setting futures, isn't that correct? So I guess airline tickets could sky rocket to cover their asses or losses.

While dropping oil may mean slowing down on the fracking wells, the cat is out of the bag.
The us is no longer beholding to the middle east.
So we close the valves while the Saudis sell us oil cheaper than we can produce it.
When their economy/politics crashes and they raise their prices we can still open the valves.
If Putin takes a bruising in the mean time so be it.

a reply to: TM62

So I guess airline tickets could sky rocket to cover their asses or losses.

No they are buying their oil today to be delivered at a later date.
Was it Southwest a few years back who had struck a long term contract that gave them fuel about .79 lower than all of their competitors?