Weird how when oil was down below 40 bucks a barrel gas went down below two dollars. I appreciate that there are other factors involved but c’mon man.
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Obviously it remains to be seen, but I’m not sure it’s that clear cut. No oil company is viable below about $20/barrel and Saudi Aramco below about $35/barrel. So at the moment they’re heavily dependent on either existing funds or further investment. I think the latter is somewhat hard, and a substantial portion of the US industry is heavily indebted (and break even is much higher than the Saudi’s). So the question is, what happens next? I’d be surprised to see much investment in US oil ever again, since i suspect there will be lots of “loss of shareholder value”, and the Russians and the Saudis have shown a willingness to drive down the price. So where does the investment go? Well, in the energy sector, wind and increasingly solar are cost competitive with fossil fuels, and the markets are not subject to the whims of despotic nations.
Broadly, I expect the long term outcome to be driven by investment, not short term prices, and i see little good news for the oil industry on the investment front. Still, what do i know?
Edit: these numbers above should be taken with a pinch of salt, but with more reading it looks like they might be overly optimistic for the oil industry.
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very early on the government started buying for the strategic oil reserves to try to keep the prices up. ( an oil subsidy basically. ) and, last week(?) they were announcing trump’s vert successful call to russian and saudia arabia to reduce supply
so they have been desperately trying to distort the market for months now
they just aren’t very good at their jobs
[ edit for links ]
reserves:
“successful” call:
trump bad at job:
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The gas at your local station was already bought at that price and needs to be sold at that price to make the money back, so it’s a lagging indicator of the cost of raw crude.
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unless prices go up, of course. then we see that very quickly at the pump
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Almost 30 years on, there’s not much I can do about it, but this is not how the gas stations handled things during Desert Storm, when the price of oil went the other way.
The converse of very high oil prices led to a boom in oil exploration and investment. Of course, that doesn’t mean low oil prices will necessarily invoke the opposite, but it’s not like high oil prices ushered in an era of renewables. The point is the investment case for renewables was much harder to make when great returns could be made from oil.
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Just spitballing here, but it seems like the answer to the storage problem is to give each person a gallon drum or three of crude oil along with their stimulus check. /s
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If only we could heat our homes and light our way with their pain and suffering.
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Saudi Aramco costs > 35$ barrel? I heard their costs more like 7 / barrel but the Saudi treasury needs high prices for the overspent budget ( like > 90 ). At any rate, Saudi oil will always be cheaper than anyone else’s costs, so they can undercut everyone. And the winner here is who sells all their oil before the market eventually fails, however long that takes , and Saudi won’t run out before then. And our premier in Alberta is pissing away 8 billion on a pipeline no one wants.
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Geez…I hope you’re not related to Mortimer and Randolph! 
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We’ll just take it to the local refinery and…wait, I almost forgot:
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No satellite photos, but yes that’s absolutely happening:
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Yeah, I’m seeing 50¢ difference at gas stations near me. I don’t think the ones hoping to recoup their costs are gonna sell much gas.
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The 2nd paragraph is the key here, and it’s more amusing than what’s happening to the actual price of oil
I live 30 mi from Downtown Houston in a suburb. Apparently this is not a big deal (hahahahalololol).
The new gold.
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I guess we’ve hit Valley Oil.
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