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  1. #21
    Nav jāuztraucas par manu zirgu Baron015's Avatar
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    Why has the price collapsed from $140 to $40 ?

    Increased supply from Saudi ?


    Memento mori.

  2. #22
    Established TDF Member jamesp's Avatar
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    Quote Originally Posted by Baron015 View Post
    Why has the price collapsed from $140 to $40 ?

    Increased supply from Saudi ?
    OPEC made no effort to cut supply.
    In my opinion an exercise(in economic warfare) in driving the price down to cripple fracking and drive it out of existence.

    The USA was becoming a net exporter due to shale gas(fracking), I`ve seen that quoted as having a viable production cost of around $70 a barrel.
    A lot of US fracking has been shut down.........

    There was an article last week where an O&G bod was suggesting that the industry needed to get itself used to being viable at $60 a barrel.

    There was an item earlier this year/late last year that listed oil producing countries and what oil price their national budgets were based upon; some of the gulf states were north of $120, several were $100+ very few were sub $90.

    They must be taking a huge hit as well, which reinforces my belief that it was a deliberate policy to counter fracking.

    I honestly thought that the yanks would adopt a "FU Aaarab" approach and stick with home produced/fracked supply; but you can never underestimate an idiot.

  3. #23
    Nav jāuztraucas par manu zirgu Baron015's Avatar
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    Doesn't seem much evidence that the price is tending towards the marginal cost of production ..... I guess a lesson in the dangers of allowing a cartel to flourish. Or the dangers of a small number of massive producers who essentially control the market.


    Memento mori.

  4. #24
    Established TDF Member jamesp's Avatar
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    Quote Originally Posted by Baron015 View Post
    Doesn't seem much evidence that the price is tending towards the marginal cost of production ..... I guess a lesson in the dangers of allowing a cartel to flourish. Or the dangers of a small number of massive producers who essentially control the market.
    It is for some of the North sea fields.

    Just remember that Saddam invaded Kuwait when they refused to back lifting the price to $21, the USA was swamping the market with oil from it`s strategic reserve to surpress the price down from well over $21 after the invasion.

  5. #25
    Established TDF Member MikeF's Avatar
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    Quote Originally Posted by jamesp View Post
    OPEC made no effort to cut supply.
    In my opinion an exercise(in economic warfare) in driving the price down to cripple fracking and drive it out of existence.

    The USA was becoming a net exporter due to shale gas(fracking), I`ve seen that quoted as having a viable production cost of around $70 a barrel.
    A lot of US fracking has been shut down.........

    There was an article last week where an O&G bod was suggesting that the industry needed to get itself used to being viable at $60 a barrel.

    There was an item earlier this year/late last year that listed oil producing countries and what oil price their national budgets were based upon; some of the gulf states were north of $120, several were $100+ very few were sub $90.

    They must be taking a huge hit as well, which reinforces my belief that it was a deliberate policy to counter fracking.

    I honestly thought that the yanks would adopt a "FU Aaarab" approach and stick with home produced/fracked supply; but you can never underestimate an idiot.
    you really need to look at lifting cost rather than gulf state budgets.

    North sea is a hostile, high cost environment. send a DSV to the North of Shetland to open a manual valve on the seabed, thatll be @ $1M. send a pickup truck into the desert to do the same thing that'll be $10k. crew change an installation in the North Sea = fleet of helicopters. crew change onshore = scheduled flights and a bus. you get the picture

    therefore lifting cost for the North sea is high, probably averages @ $65/bbl with some newer assets better than this. some of the older ageing assets are nearer $100+. fracking as has been said $70/bbl ish and at that US went from importer to self sufficient to exporter in a very short space of time. compare that to a middle east land based lifting cost of @ $10/bbl.

    Do the arab states care if they take some short term reduction in profit while eliminating competition, stifling alternative energy development that will reduce the worlds dependency on a carbon economy (and may mean their oil in the ground is ultimately worth less long term) and taking the opportunity of refocusing the US on supporting the arab states that are effectively run as family businesses and are a source of 'cheap oil'? I don't think so.


 
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