Posted on 12/12/2014 8:38:48 AM PST by Signalman
A global glut of oil will persist next year, putting further pressure on prices and raising the risk of unrest in some producing countries. That's the stark warning from the Paris-based International Energy Agency, which on Friday cut its forecast for global demand growth in 2015. It now sees demand growing by less than 1% next year.
Oil prices have already fallen by more than 40% in six months, but there's little sign of that stimulating demand yet, or constraining production enough to remove excess supply. "Oil price drops are sometimes described as a 'tax cut' and a boon for the economy, but this time round their stimulus effect may be modest," said the agency, which monitors energy market trends for 29 of the world's wealthiest nations. U.S. crude prices fell again on Friday to around $59 a barrel.
(Excerpt) Read more at money.cnn.com ...
Most of OPEC wants to raise prices right now. Saudi, who is driving the move not to make a total production cut, had their production fall slightly the last few months.
The US production has been climbing about 100,000 bpd each month.
How low can you go...
Question is, when is the time to buy? ;-)
I suspect the majority of US oil production will survive this period of low prices better than Venezuela and Nigeria does.
The US produces about the same amount of oil that the smaller half of OPEC does. I’ll bet when price eventually climb, the US oil industry will be in better shape than half the countries in OPEC.
That is the magic question.
Given my attempts at timing investing, buy in June, sell in December.
As long as you had hedges in place that would work ;-)
There should be some good bargains in the energy sector though. I might need to think about getting in soon.
Sorry, instead of oil taxes, I should have stated gas taxes.
Most gasoline taxes are fixed per gallon and do not change with price.
Some have percentage based, but it is less common.
I understand capitalism.
The problem is that we rarely let capitalism work much any more.
Time will tell.
could not agree more!!!
True. Just yesterday, “if you don’t spend a could trillion dollars stopping global warming, no Peruvian asparagus for you!”
So as long as they don’t have nukes....... No wait. Iran
Just a thought, imagine Iran trying to block the world’s oil supply in the Gulf of Hormez and Iran sees Chinese navy ships instead of US navy ships, get your popcorn ready, popcorn futures would be sky high.
The Chinese would be less merciful than the US would be with Iran......
Lookout Iran, this is just a warning, the Chinese at sometime will be breathing down your back and they will mean business.
There is a Bible prophecy that says that there will be a huge military force and army cutting it’s way by land straight across Asia to the middle east, Iran ? Can’t say you were not forwarned.
The fracking industry won’t go away or be delt a fatal blow with this downturn ?
Or the barrels a day production decline ?
Venezuela will be lucky to survive the revolution that is likely to occur. They have been out of toilet paper for a long time already.
How much is the lower energy costs helping America’s industry and production as a whole ?
Is it helping bringing production back to America’s shores ?
More investment in America ?
Inflated taxes along with their inflated egos.
In a related thread
Oil price collapse claims WA’s Red Fork Energy, shale gas company in receivership (1st Major Victim)
http://www.freerepublic.com/focus/f-news/3236760/posts
The Oil and Gas industry had done hydraulic fracturing since 1940s. In winter 08~09, the oil price dropped to $35. It has bounced up and down over the decades. The industry will survive; not all companies and certainly not all jobs will survive.
Or the barrels a day production decline ?
The growth rate is going to slow down. If the price stays low long enough, it will stop climbing or start to decline.
But the technology won't go away and neither will the shale. It isn't the first downturn for the industry and won't be the last. If the rate falls enough, it will drive the prices up even faster.
Lower prices for oil/gas/ngl is not bringing in more investment dollars for production. It takes away incentive for investment for production.
I doubt Russia will stand for this very long. They’ll be sending the Saudis a message pretty soon.
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