Posted on 11/03/2014 2:09:43 PM PST by SeekAndFind
Technological advances in hydraulic fracturing have fueled what some call the Great American Shale Boom. Oil and natural gas extracted from shale basins have left the US flush with energy. It's been a boon for US energy-related jobs and equipment suppliers.
But it's not cheap to tap these so-called unconventional plays.
In other words, crashing oil prices will soon make many of these energy sources money-losing projects. Morgan Stanley estimates the average breakeven oil price for these US plays to be about $76 to $77 per barrel. Goldman Sachs puts that number at closer to $75.
If the price of oil can't cover production expenses and these companies are forced to idle their operations, then you could expect spending to drop, jobs to get cut, and delinquencies and defaults to rise.
To make matters more complicated, many of these energy companies are financing their operations by borrowing in the junk-bond market, which means borrowing rates are relatively high.
(Excerpt) Read more at businessinsider.com ...
Time for a 40% tariff on Middle Eastern oil!
Yeah, ok. The whole reason to find more oil is to bring down prices! And to make us independent of course.
The high-falutin Wall Street types just LOVE high oil prices.
Your opinion?
Maybe ISIS can disable some ME oil terminals....(say Saudi Arabia and Iran).
The Saudis appear to be trying to crash the shaleoil industry. They cut production and raised prices to Europe and Asia, but cut prices to the US.
Tell me our government is going to slap somebody.
Why we put up with this blatant attempt to destroy our industry is beyond me and for those who faciliate these actions in our country, beyond contempt.
Why are we importing oil from Muslims who hate the U.S.?
Are they admitting that the free market still works and that supply and demand are self correcting forces?
Price goes down below cost of fracking, fracking slows down, supply shrinks.
Supply shrinks, prices go up, fracking becomes economically feasable again.
Good we need to produce more and undercut "them". Too bad we don't have a President Cruz or Palin to open all the Federal Lands that have it....
Nothing new here. OPEC manipulated supplies and prices, several times since its inception.
Sometimes, their manipulation were in part, to discourage development of alternate sources.
Example: During Carter then Reagan, the US funded several pilot programs, for oil extraction from oil sands/tar sands. OPEC brought prices down, and eventually those projects were ended.
Canada on the other hand, kept their oil sands/tar sands programs going, with private and public funds, and they are now established and profitable with out govt. assistance.
This has never happened before!!!
>The high-falutin Wall Street types just LOVE high oil prices.
They probably like volatility more. Then they can make money on every trade and hedge.
why can’t we double our reserves at these prices. Build more storage facilities. What we have stored is based on archaic “use estimates.
ISIS can stay the hell out of Maine.
They will pump it til it is unprofitable and then hang around that number. Lower fuel prices stimulates everything including fuel prices.
Pray America wakes
I call those same people traitors
LOL. Nope, the oil and gas guys I know in Dallas and Houston have factored a price drop into their business models. Here’s the take-away: US oil and gas from fracking is more economical than ME oil and gas on a production cost basis. To be blunt, it is not even close.
The US players are looking to break the ME’s oil producers’ spines and have planned accordingly. They have squirreled away large fortunes AND diversified their holdings into tech, hence the (largely unnoticed if you are not here) massive tech boom going on in Dallas right now.
Get out the popcorn!!!
Exactly. The country needs lower prices—and that’s what the market is delivering. The idea of artificially boosting prices in a market is crony capitalism.
Damn...cheaper gas at the pumps means less profit to Obama donors. It’s almost as if they could manipulate the market the whole time and made trillions more.../s
RE: Are they admitting that the free market still works and that supply and demand are self correcting forces?
Price goes down below cost of fracking, fracking slows down, supply shrinks.
Supply shrinks, prices go up, fracking becomes economically feasable again.
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That is ASSUMING that the government doesn’t step in somewhere and mess the whole cycle up.
A huge assumption of course.
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