Posted on 01/11/2016 8:49:32 AM PST by Citizen Zed
U.S. oil prices dropped below $32 a barrel Monday for the first time since 2003 on a stronger dollar and continued concerns about Chinese demand.
Prices slumped to 12-year lows this month as the global glut of crude that has weighed on oil prices for more than a year continues to persist.
(Excerpt) Read more at wsj.com ...
Someone can correct me if I’m wrong....but is there any profit at below $32, or is pretty covering pulling out of the ground and transporting it?
Someone can correct me if I’m wrong....but is there any profit at below $32, or is pretty covering pulling out of the ground and transporting it?
With the exception of gold, all commodities are down. I understand the fundamentals as to why, I just wonder if we are going to get caught in a strong deflationary down draft.
Depends. Hence the supply curve.
No one made a profit on oil before 2000?
I heard on the news this morning that gasoline prices could drop to under $1.00. That hasn’t happened since 1999. It’s $1.70 here now. Where I gas up it’s dropped $.07 in a week.
Thirty two bucks in 2016 is worth less than 32 bucks in 1986. A lot of oil obtained today much harder to get than thirty years ago. Oil sand producers must be losing a ton of money.
Some wells are profitable below $3O. More will be so as technology advances and the Oilcos are working on improving methods full steam ahead. In Arabia oil is profitable at a much lower number than $30. In Russia I think the breakeven is north of $8o. The price at which the oil companies say they can profitably keep all the wells open and explore for more oil is sliding bit by bit and I think it is less than $60 now.
On existing wells, that would be cash positive on most oil wells, but likely not if you had any payoff on drilling the well and putting it in service.
In other words, few wells (relative to 2 years ago) would be economic to drill and start at this point, but wells already in service will mostly keep pumping.
But those existing wells in service keep declining in production without additional capital spent.
below $32 a barrel and we’re still $2.30 a gallon of gas
I “saved” $2.73 on gas this week. H
owever my 401K lost $3,000. Such a deal......
Yup- lots of taxes and in an area that is ‘hard to get gas too’ is their excuse for the high prices- We didn’t even drop below $2.25 the least time oil fell this low- all of Aemrica practically was enjoying $1.60 or so- but nope- not us-
Try commiefornia! Still about 2.75 a gallon.
Elections have consequences.
That would make lots of folks in my biz pretty danged happy.
Not if it is just added taxes....
That's the thought I have been acting on this past year. Debt-free and starting to amass some cash in the National Bank of Serta.
The only blip I see is the horrendous increases in foodstuffs. Yesterday we saw $5 a bunch asparagus, $3 a pound brussel sprouts and a 4-pound spaghetti squash at $5.
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