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To: bananaman22

If the Sauds were to tighten up it would not put Russia in the black. The price of oil probably can’t go much higher than $60 whatever OPEC might decide to do short of starting a general war. At that price the shale wells become profitable again and come back on line. There is so much shale oil in the ground in so many places that the cost of producing it is what determines the unmanipulated price of oil. Even now, as the price is too low for most shale oil to be profitable, the industry is working on technology improvements to reduce the cost. Once it is opened up again by some combination of falling costs and OPEC controls OPEC loses its last handle on the price. Arabia keeping the taps open would seem to be the most profitable long-term policy, I think. The Sauds can always choke down for a short term flood of money in a national emergency even though that will hasten long term lower prices. If they restrict production as a general rule to keep the price up the price will fall steadily as shale oil production ramps up and the cost of production goes down.


4 posted on 12/30/2015 8:48:03 AM PST by arthurus (Het is waar. Tutti i liberali sono feccia.)
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To: arthurus

It would be in Russia’s interest to start a war.


5 posted on 12/30/2015 9:28:44 AM PST by stinkerpot65 (Global warming is a Marxist lie.)
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