Probably won’t happen. I can see $75ish but the cost of production is higher than the 20s.
In a panic of selling the futures may fall to the 40s but it won’t stay there.
Even Mexico has a growth rate of 4.5%. Yes, Europe and the U.S. are sucking wind right now and China seems to be poised to follow. The latter could cause a serious drop in prices.
Low prices, for the first time, are not a good thing. Low prices could help oblabla stay. To get rid of the POS I’d be happy if oil hit $200 but it won’t.
Markets are like the seasons in a way. Last summer was one of the two hottest and driest on record here in Texas. Records don’t happen very often and don’t last that long. Most things return to the norm or equilibrium when outside or artificial forces are removed.
Over the last 35 years we have endured many price crashes in oil and surfed the highs. Neither of the two events usually last very long (’86 to ‘94 was devastating, ‘98 was short lived and the reactions proved foolish, 2001 was imposed by external forces, 2008’s rapid increase was a panic and it did a lot to precipitate the Great and ongoing Recession) and people always panic and attempt to extrapolate the current point of events far into the future. They have always been wrong in the long haul.
If drilling in shale oil ends or slows much I believe production will fall pretty quickly. I believe I have more learned company in that view than there are those who think the declines in production from wells will be slow.
Warren Buffet lost a billion dollars speculating on the price of oil in 2008 (running it up while Boosh was President).
He won't do that to his pal Barack Obama.
If drilling in shale oil ends or slows much I believe production will fall pretty quickly. I believe I have more learned company in that view than there are those who think the declines in production from wells will be slow.
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Production of shale oil will rise significantly in the next couple years not just because of the rise in production in the Baaken field — but because a half dozen other big shale oil fields and maybe a dozen minor shale oil fields are going to be coming on stream.
The is a secular change in oil production