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$100-a-barrel oil never again

Hilander

Free Spirit
Staff member
V.I.P.
Saudi billionaire businessman Prince Alwaleed bin Talal told me we will not see $100-a-barrel oil again. The plunge in oil prices has been one of the biggest stories of the year.

Saudi prince: $100-a-barrel oil 'never' again
He thinks we will never see $100 a barrel oil again, hope he is right, and says part of the reason it dropped so low was a sluggish economy and a oversupply of oil. He also says that the low oil prices wasn't because of trying to hurt Russia over Ukraine. Which I have to admit crossed my mind.

I hope it doesn't go back to $100 a barrel, it was taking too much out of consumers pockets just to go to work. These lower prices are like getting a raise for many people that were barely making ends meet.

Still I look for it to go back up, probably even to $100 a barrel. The reason I think this is the cheaper it gets the less profitable it will be to go after in places it requires fracking to do so. In some cases it would put companies in the hole trying. I wouldn't be surprised if we don't start seeing bankruptcy filed over this.

Gas is at $1.92 where I live now. Haven't seen it this low in years.

Thoughts?
 

Dr4gon

Registered Member
V.I.P.
Well Saudi Arabia said it could only survive for one year at $60/barrel and its lower than that now. So yeah Im expecting that the prices will rise again. But its not just hurting Russia. Other countries like Venezuela are wanting to cut production too.
Venezuela, Iran plea for oil cut hits Gulf OPEC brick wall | Reuters

I wont even guess about what caused the low prices but I do know it all started after fracking began so that definitely has something to do about this.
 

Hilander

Free Spirit
Staff member
V.I.P.
Getting everyone to go along with a cut in production might be a problem. The Saudi prince said the last time OPEC got together and decided on a cut in production a lot of the members cheated.

I've heard that Russia is planning on pumping even more to make up the revenue over the falling prices. I've not read this but people have been telling me this. If I can find a article I will post it.
 

Dr4gon

Registered Member
V.I.P.
The same article (in the OP) is also in Komsomolskaya Pravda today.
ЦенÑ

Notice in the article that the falling prices arent blamed on geopolitics.

При этом принц отверг «конспирологическую» версию о том, что причину падения цен на нефть следует искать в геополитике и желании США «сделать больно» России, для чего Штаты сговорились с союзниками, включая Саудовскую Аравию:
- Саудовской Аравии нет никакого смысла делать это, потому что Саудовская Аравия страдает не меньше России. Это не так заметно, благодаря нашим большим резервам. Но я уверяю вас, что Саудовская Аравия и Россия находятся в одной лодке.

Also the prince rejected "conspiracy" version - that the falling prices are caused by the USA to hurt Russia. The States agree:
- Because Saudi Arabia and Russia are both suffering from the lower prices.
But at least the dropping prices slowed down.



Notice that the worst drop was from November to December but that was $17 and from December to January is only $14.
But they also believe that a lot of the fracking companies will have to file bankruptcy before the price comes back up.
 

Hilander

Free Spirit
Staff member
V.I.P.
Some places in the US its already hurting. Like North Dakota. I look for many of the fracking companies to fold if prices continue to drop.

Only five oil rigs were drilling in Divide County this week, down from 12 last August, according to state data. While those only account for a handful of the more than 162 rigs still drilling in North Dakota, the drop has been much steeper than elsewhere in the state and could signal trouble across the No. 2 U.S. oil producer behind Texas if prices continue to slide.

North Dakota fracking town’s economy collapses as oil prices plummet
 

MenInTights

not a plastic bag
I think its weird how we got so used to $100 oil and $4 gas when that is a historical anomaly.
With solar coming on strong and new fraking technology, I think the prince may be right. The economy just can't survive without cheap transportation. You can trace the US economic funks to the price of oil on the chart below. 2015 is going to be a rebound year for the US economically if this continues. There's just no greater stimulation than cheap fuel.

 

Hilander

Free Spirit
Staff member
V.I.P.
They think the cheap prices won't last, which I'm sure it won't, supply at some point is going to go down when they stop pumping so much.

Oil price collapse still not enough to boost demand: IEA

Since I started this thread the price for a gallon of gas has dropped again, it is now at $1.80 here.
 

Smelnick

Creeping On You
V.I.P.
I've already noticed that grocery prices have dropped. Freight costs were greatly affected by gas prices so we're probably going to see a nice trickle down effect in the prices of other things
 

Hilander

Free Spirit
Staff member
V.I.P.
Yes that is another wonderful thing about cheaper gas, cheaper prices on other things like food. This should give the economy a good boost. I'm sure it will go back up but I hope it doesn't go back to $100 a barrel. Makes things too hard on your average person.
 
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