Posted on 12/15/2014 1:08:58 PM PST by PJ-Comix
Worldwide oil consumption is 90 million barrels per day. I would say the falling demand for oil due to sluggish world economies has been a bigger factor in plunging oil prices than has fracking.
In the USA oil production from fracking accounts for about 3 million barrels daily. Hardly a pittance when compared to worldwide production.
Yes - in a fair market, low cost production wins. (for commodities especially)
A problem occurs when private enterprise competes with state sponsored/owned companies. The state can, for sustained periods, make decisions that public companies cannot, because they are not held to a ‘smart business - worth my investment’ standard. There are no shareholders and markets there to make sure that the business decisions make sense for the business.
The Saudis have that “advantage” of making anti-competitive decisions without stock market or governmental oversight token them honest.
This situation sure cries out for consideration of a protective tariff, applied to OPEC. Hey, if they’re willing to embargo us, they have no legit beef against a protective tariff. Live by economic warfare . . .
Yes. Also a hedge protects against a drop in price. Most were indeed hedged and protected out for a year or so against this loss.
Before the oil price slump the US reached about 8.5 million barrels a day.
That’s domestic production.
Good point.
Crude oil production in the USA before the fracking surge beginning around 2005 was 5+ million barrels daily. Current USA crude production is 8.5 million barrels daily.
Horizontal drilling/fracking accounts for about 3+ million barrels daily of this increase offset by decreases in the existing conventional wells.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A
I always think of the new Battlestar Galactica whenever the word comes up...
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