Now we know WHY oil prices suddenly dropped. The Saudis want the U.S. OUT of fracking in order to control the market. They also knew the people were going to vote the way they did, so they waited to make it rough on Republicans. Shrewd, evil people they are.
Oil prices are dropping because the U.S. dollar has been gaining strength against almost every other world currency in recent months. There’s really nothing more to it than that.
At $75~80 a barrel, it won’t end hydraulic fracturing and horizontal steerable drilling in tight formation like shale.
It will certainly slow down the growth. It will drive down the cost of the companies providing services like HydroFrac since the demand will not be driven above reasonable supply.
But at those prices, it will still grow the number of wells, just at a more reasonable pace.
Fracking is not going away. The possibility of fracking will keep the prices down a certain amount. And fracking will become cheaper, less quickly than if there is less of it being done for a time but it will continue to get cheaper all the time. The fact is the oil is in American ground and off American shore.The Saudi dominance is gone. If the Sauds induce the price to decline to $40 to retain their dominance, fracking has done much of its job. The price cannot rise again without American production ramping up again and displacing Saudi oil in the market. Eventually it will be cheap enough that the Sauds don’t have sufficient cost advantage to keep American wells out of production. And the Saudi fields are depleting.
Not so much shrewd as desperate.
Exactly - the Saudis want the US out of fracking in order to control the market, and are having a fire sale in order to do this.
They’ve done this every time the US ramped up production.
But I think the tech curve is way ahead of them this time.
They won’t be able to lower their prices below what existing fracked wells can produce, and they don’t have the supply to keep up with the demand at $1.60 per gallon of gas.
It’s a repeat of 1999-2000.
Remember the recession Bush inherited from Clinton.
That orchestrated recession came directly from Clinton using the Oil for Food Program to manipulate the price of oil and the Saudis and other oil producers flooding the market with oil.
The price of oil went so low it put millions out of work.
The MSM ignored the recession until Bush was elected then it became Bush’s recession.
The recession that’s coming is going to be blamed on the republicans by the dems and the republicans will blame it on Obama.
Hillary will blame both.
What a coincidence.