It needs to be $60 or fracking disappears. What am I missing?
When oil and natural gas prices are low, only less energy intensive methods of extraction are viable. That means the industry becomes more energy efficient, and outputs far less pollution.
I agree. Russia might be the target but the ulterior motive is to hurt the US oil exploitation industry.
Canada is already weak (thanks to Turdo) so now on to the US, making OPEC great again (to borrow a phrase)
They did the same thing in 2015 (?) and the America oil market survived. They can’t press the oil price down for too long. The Saudis will pay for it too.
When we went through this is 2014/15, our domestic industry radicalized cost control. In the long term, we need pricing above $50 per barrel to continue exploration and development. But, in the short to mid-term, most of our wells have a "cash cost" in the mid-20's. That means, our producers are not hemorrhaging cash at these levels. The ones that are under, will be able to find support from the banks.
Keep an eye on the price level. If it drops much below $30, then the Saudis are coming after the US too. If it stays around $30-33, it's a coordinated effort to take down the Russia-Iran alliance.
This could be the death of the oil sands in Alberta.
Plus production cost is low-- what will temporarily cease is new fracking, which is expensive. I suspect a big price rebound as Chinese production increases.