Never fails, OPEC cuts prices and shuts down competition.
Maybe I’m missing something here, but is this really something to be concerned about? Oil prices fall so new drilling projects get shut down. Shutting down new drilling projects restricts supply, so prices stop falling. Eventually, an equilibrium is reached where the profitability of new projects matches the price of oil. That is pretty much the definition of a free-market price. I thought we believed in the free market around here.
I imagine that this will change the valance in the industry from “drill at [almost] any price” to, “is there a way to do this faster, better, cheaper?”
I'd read that at the height of the boom, companies were paying premiums for the resources needed to develop new projects. They probably were most focused on making hay while the sun shone, not primarily in finding ways to further innovate and bring down costs (although I imagine that happened also - the more these companies engaged in these newer methodologies, the better they became at them, and as in other fields, they learned lots of new stuff along the way that helped them incrementally reduce costs over time).
Now, with prices low, companies have two choices: shelve projects for now and wait for prices to rebound; or devote more time, energy, and resources to figuring out how to do the work profitably at lower prices. Some projects will be shelved, but I imagine some companies will put relatively greater effort to trying to produce profitably at lower price points.
Then, as prices rise, the efforts to reduce costs will be applied more broadly to a greater range of projects, resulting in more production at lower costs, meaning that overall, the US oil industry will be more competitive than before the price drop.
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