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Title: How low can it go? Oil, gas prices in freefall as OPEC reels from US fracking
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Published: Nov 30, 2014
Author: staff
Post Date: 2014-11-30 03:54:10 by Tatarewicz
Keywords: None
Views: 181
Comments: 14
Fox News...Drivers paying less at the pump due to free-falling oil prices can thank the U.S. energy boom for generating shale oil - and weakening OPEC's ability to keep the cost of a gallon of gas high. In just a matter of months, the price of a barrel of oil has dropped from more than $100 to about $70, and gas is now cheaper than it has been in years. But a recent report conducted for the American Petroleum Institute claimed oil would cost twice as much as it does now if it weren't for America's fracking boom, which wrings oil and natural gas out of shale miles underground. ADVERTISEMENT But the next question could be whether the fracking industry can survive the low prices it brought. “The shale boom is on a par with the dot-com boom," Russian oil baron Leonid Fedun of OAO Lukoil told Bloomberg. "The strong players will remain, the weak ones will vanish.” OPEC, the cartel of oil-producing nations that has historically been able to calibrate the price of oil - and ultimately gasoline - by increasing or decreasing supply, announced Thursday that it won't fight the price skid by cutting production this time. That likely means prices will continue to fall, and the more costly production technique of fracking could become cost-prohibitive, say experts. Drivers have benefited in recent months from the falling prices, the API study found. “This reduction in petroleum product prices have saved U.S. consumers an estimated $63 to $248 billion in 2013 and estimated cumulative savings of between $165 and $624 billion from 2008 to 2013,” stated the report. OPEC decision to maintain a production target of 30 million barrels a day was seen as a reflection of its members view that the short term pain was necessary to pressure rival producers in the U.S., who need moderate oil prices to break even. Saudi Arabia, the leader of OPEC, appears to be hoping to drive prices below the level at which shale oil production is economical. Experts say shale oil production turns too costly at the $60 a barrel level. BUt other OPEC countries may not be able to withstand the steady production and the falling prices it brings. OPEC members like Venezuela and Nigeria need levels close to $100 or above to fund national budgets. Saudi rival Iran is suffering, too, with the price drop adding to huge revenue losses due to sanctions on its crude sales imposed over its nuclear program. And Russia's economy is in trouble, making falling oil revenues a problem there, as well. "I think you're going to see additional tension between the OPEC ranks," said Jamie Webster, senior director of crude oil markets at IHS consultants. In the U.S., gasoline prices are averaging $2.82 per gallon, the lowest price this time of year since 2009, according to the U.S. Energy Information Administration, which says the average U.S. retail regular-grade gasoline price has fallen 88 cents/gal since the start of July. But in the U.S., consumers' joy at pump prices falling toward $2 a gallon will be tempered by fears the burgeoning economy in places like the Dakotas, Texas and Oklahoma could be hurt by the lower cost. The industry is credited with creating nearly 2 million jobs, a number projected to double by 2035. "If prices don’t recover soon this could be the beginning of the end of the Great American oil fracking boom," Forbes' Christopher Helman recently wrote. BIgger energy companies with money of their own to invest might be able to ride out the dip, but smaller, highly-leveraged oil and gas companies will have problems, he said.
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#1. To: Tatarewicz (#0)
Nonsense. Continue that line of thinking. World consumption of oil increases every year, never decreases. Drive the price of oil up and the American wells start pumping once again. It is a NO WIN situation for Russia and OPEC. The leverage is no longer there. Our economy has never depended on oil exportation as its sole provider. We are the worlds largest exporter of food, Russia and OPEC must eat to survive.
Anyone who understands economics knows that falling prices and the elimination of profit is the norm. Whether or not it is good or bad is irrelevant. It's the way it is. And exactly why do I give a damn about Nigeria? "Have Brain, Will Travel
It sounds like you don't buy many soccer balls or straw hats.
Turtle... Surrounding and under me, we have hundreds of natural gas wells, sitting at the idle because government brings the building of pipelines to a near halt. A 36 inch line is needed into New England to modernize them and take them off expensive fuel oil. To lay that line requires crossing New York state and that is not allowed.
My fill-up yesterday was at $2.359 - almost reasonable. Anyone thinking that the oil/gas industry is in danger of collapse, is not very bright. “The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
lol
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
In high school gas cost 32 cents a gallon. $5, cruised, beer, food.
"Have Brain, Will Travel
Snicker.... We hill billy rubes gets our royalty check every year from Shell, never bounces.
Yep, and they'll be paying 'till Baby Jesus returns, however long that may be...
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Energy company execs will continue to drive Mercedes-Benz sedans and send their children to any college desired, nobody is getting in the soup line over falling prices.
"If prices don’t recover soon this could be the beginning of the end of the Great American oil fracking boom,"
#2. To: Cynicom (#1)
#3. To: Turtle (#2)
And exactly why do I give a damn about Nigeria?
#4. To: Turtle (#2)
#5. To: Tatarewicz (#0)
#6. To: Jethro Tull (#3)
#7. To: Cynicom (#4)
#8. To: Lod (#5)
Anyone thinking that the oil/gas industry is in danger of collapse, is not very bright.
#9. To: Cynicom (#8)
(Edited)
#10. To: Lod (#5)
-Alex Kurtagic
#11. To: X-15 (#10)
Just like they did when the price was $3/bbl. Energy company execs will continue to drive Mercedes-Benz sedans and send their children to any college desired, nobody is getting in the soup line over falling prices.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#12. To: X-15 (#10)
Shell paid local rube farmer a cool million for one corn field. We rubes wondered why. In front of field is large federal dam, lots of water, year round. All around are capped gas wells with pipelines to nowhere. We rubes have an idea what they up to.
#13. To: Lod (#11)
Example: www.hortonclassiccarmuseum.com/about-us.html Pete and Barbara Horton's home town of Nocona was once a stop on the famous Chisholm Trail cattle drive. The area later on was noted as the home of Justin cowboy boots, Nokona baseball gloves, and for the North Field oil field, which brought the oil industry to north Texas. Raised in the oil business, Pete grew up roughnecking on drilling sites. Continuing in the family tradition he and Barbara founded Peba Oil & Gas in 1986, a successful business venture which enables them to pursue their twin dream of owning an ultimate car collection and restoring the historic town of Nocona. Pete always loved every aspect of automobiles. As a teenager, he started his high-performance passion with a 1963 Pontiac Grand Prix. In 2011, his collection started gaining speed with the help of Pete Vicari - an affinity which first brought the Vicari Auction Company to Nocona in April 2013. The Hortons have teamed with the city of Nocona to save and restore many of the downtown buildings, several of which now house the Hortons car collections and corporate offices. Pete and Barbara's efforts continue today, providing an enormous economic boost to the revitalization of downtown Nocona and the surrounding community.
-Alex Kurtagic
#14. To: X-15 (#13)
Thanks for bringing that great story here!
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
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