Posted on 11/27/2014 3:06:00 PM PST by TigerLikesRooster
Oil prices in freefall as OPEC fails to agree output cut
by Geoffrey Smith @Geoffreytsmith November 27, 2014, 11:31 AM EST
Oil futures fall nearly 8% to their lowest in five years as Saudi Arabia tries to squeeze U.S. shale industry.
Oil prices fell to their lowest level in over five years Thursday as the cartel that produces one third of the world’s output failed to agree on measures to tackle the current glut.
In what had been billed as their most important meeting in decades, ministers from the Organization of Petroleum Exporting Countries agreed to keep their self-imposed output ceiling at 30 million barrels a day, but promised each other they would cheat less on their agreed quotas.
(Excerpt) Read more at fortune.com ...
True. Over the long term, even if some go bankrupt because of the low prices, as soon as they manipulate prices back up, those wells will be brought back into operation. Over the long term, they can’t win that war. As you correctly stated, the oil is STILL there.
Ding, ding, ding, ding, ding!!!!!!!!
The wind and solar boys have a friend in the White House and at the EPA.
Oil continues to fall. It’s now at $68.69 a barrel.
Maybe Americans shouldn’t be taking Saudi Arabia’s actions so personally, since the Saudis have closer and fiercer enemies, particularly Iran, Syria, and Russia, that they’re interested in bringing to their knees.
Iran’s oil-based economy should be hit hard, and their suffering people might rebel against the Ayatollahs.
In addition, Iran won’t have a lot of discretionary income to devote to their nuclear operations.
And Russia, with its failing oil economy, is no longer in a good position to keep sending large amounts of money to Syria’s government to help keep it afloat.
Sunni Saudi Arabia is now poised to sit back and watch its Shiite enemies twist slowly and painfully in the wind.
And here we’ll be enjoying falling gasoline prices. Our oil companies will suffer, but our oil-dependent industries, particularly the airlines, will be doing well, and since we’re still a capitalist country we can invest in the stocks of the likeliest winners.
Let them eat their sand and drink their damn oil.
“The smaller guys must have oil at $90-$100 to be profitable.”
Not true, 80% of shale is profitable at around $60 a barrel.
Also, people keep forgetting that the wells already drilled cost very little to produce. It’s only drilling that becomes risky at lower prices. New drills will slow, leading to higher prices later.
It’s a self-correcting system, the current alarmism is silly. It’s the Saudis who are running scared, not the USA.
Enjoy the temporarily lower prices, they won’t last more than a year or so. This is a great problem to have.
But Nancy Pelosi said it would take 5-10 years to get the oil out of the ground.
Earth to Nancy, we started drilling 5 years ago. Now, go sit in your commie corner.
Bull.
Both of you have it right.
Yes, the oil market is volatile but self-corrects beautifully.
We hit $35 a barrel in 2009, when shale production was much more expensive than it is today.
Also, no one has mentioned what always happens when energy gets cheap.
People start using a hell of lot more of it, leading to guess what.
Not true, 80% of shale is profitable at around $60 a barrel.
Also, people keep forgetting that the wells already drilled cost very little to produce. It’s only drilling that becomes risky at lower prices. New drills will slow, leading to higher prices later.
It’s a self-correcting system, the current alarmism is silly. It’s the Saudis who are running scared, not the USA.
Enjoy the temporarily lower prices, they won’t last more than a year or so. This is a great problem to have.”
Agree!
When I graduated from graduate school (along time ago) I worked with Humble Oil & Refining (EXXON) in south Louisiana. They were making money hand over fist selling crude at $3.25 per barrel.
Enjoy the the temporary “cheap prices” and watch the Saudis take it in the shorts!
Recommended reading for a comprehensive history of the business.
http://en.wikipedia.org/wiki/The_Prize:_The_Epic_Quest_for_Oil,_Money,_and_Power
lol I’m SURE as hell enjoying them.
I remember back... I think it was 1998, reg unleaded was like 0.98 per gallon here. Those were good times, all around. I remember when it got to around $1.75 at around 2004, and the manager at the gas station said we’d probably never see $1.50/gallon gas ever again. (sucked to hear that because he’s always right when it comes to that)
Now, we’d just be DELIGHTED to see it get to $2.25! LOL
Yes, but they have a problem. The subsidy levels are set and those subsidies won’t make wind and solar competitive at these prices.
It’s some green energy folks who are going to go out of business.
I see great things out of this move by the Saudis.
Thanks.
I’ve been around the oil/gas patch since the 60’s.
Yes, I’m enjoying it too, even though my royalty checks will go down.
They’ll be back up soon enough.
Freefall is right. Damn
1. American domestic petroleum production is zooming through the roof.
2. China is about to do a GIGANTIC deal to buy petroleum products from Russia and will build pipelines to get both crude oil and natural gas from Siberian oil and gas fields.
In short, OPEC is about to lose its two biggest customers--that could result in a huge surplus of oil on the open market soon.
Be thankful this Thanksgiving Day that those folks in the White Hut and EPA only have 2yrs to screw things up.
No honor among thieves.
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