On the oil sands, although perhaps not on every part, I think established companies can make money she oil is only going for $40/barrel. There’s no exploration when it is this low, but what has been developed can still be profitable.
are the price of groceries going to go down along with the downward spiral of gas prices?the price of groceries and just about everything else went up drastically when gas prices went up why don’t they go down when gas prices go down?
This is why the Saudi's can continue to pump at current levels. Their infrastructure has long been paid for, everything that comes out of their wells now (sans labor costs) is pure profit. They know they can pump at current levels for a very long time without feeling too much pain.
As opposed to the American fracking boom which has high start-up infrastructure costs that relies on higher costs per barrel to recover the high start-up infrastructure costs quickly.
The only way we win this pricing game against the Saudi's is via continued innovation in fracking and horizontal drilling to continue to drive OUR extraction costs per barrel down.
So the choice here is to place your money on the Saudi's, or place your money on American ingenuity and innovation to drive our own extraction costs down while increasing production to maintain profitability and pay off our own infrastructure quickly.
My money's on America. Never bet against good old fashioned American innovation and ingenuity. We STILL are the best in the world in that game.