Oil - How low can it go?

[OwlHoot]

Just how low can oil prices go and who is hardest hit? - BBC News

Low $20's?

As low as a snake's belly button.

[jbond007]

It'll keep dropping until the Saudis feel they've killed off competition from shale oil, I expect. So the real question is: how low is too low to bother with shale?

But what if USA considers Shale oil industry an important one for their oil independence and props it up

[seanraaron]

But what if USA considers Shale oil industry an important one for their oil independence and props it up

Well they've been talking about lifting the export ban on domestic crude recently so I'd be surprised. I suspect it will come down to the size of Saudi contributions in the upcoming Presidential campaign.

[tomtomagain]

But what if USA considers Shale oil industry an important one for their oil independence and props it up

The Saudi's can pump oil for around $5 a barrel. And not only that, they will have to as 90% of their economy depends on it.

The US won't protect it's Shale industry. It won't need to. Sure it will be a bloodbath for most of the Shale producers but this will just let companies like Exxon pick up more proven reserves so that they are ready come the upturn.

The thing about the Americans is a) They are really inventive. There will be smart, motivated minds working on how to get the costs down.
b) The have a flexible market. That is they'll shut down when times are bad but as soon as it's profitable again, they'll spring back into life.
c) They are not squeamish about exploiting their own natural resources.
d) They love oil.


The current market conditions are a classic case of oversupply. Oil was $100+ for a long time ( when I was first working in BigOil $50+ was considered fantastic). $75+ oil brought on a huge number of projects from West Africa to the coast of Brazil, from Gulf of Mexico, Canadian Tar sands, US Shale to the North Sea.

And don't forget the extra barrels that Iran is going to bring to the table.

I would not be surprised if oil trades around $5 - $15 for the foreseeable future. By that I mean at least the next couple of years.

[jbond007]

The Saudi's can pump oil for around $5 a barrel. And not only that, they will have to as 90% of their economy depends on it.

The US won't protect it's Shale industry. It won't need to. Sure it will be a bloodbath for most of the Shale producers but this will just let companies like Exxon pick up more proven reserves so that they are ready come the upturn.

The thing about the Americans is a) They are really inventive. There will be smart, motivated minds working on how to get the costs down.
b) The have a flexible market. That is they'll shut down when times are bad but as soon as it's profitable again, they'll spring back into life.
c) They are not squeamish about exploiting their own natural resources.
d) They love oil.


The current market conditions are a classic case of oversupply. Oil was $100+ for a long time ( when I was first working in BigOil $50+ was considered fantastic). $75+ oil brought on a huge number of projects from West Africa to the coast of Brazil, from Gulf of Mexico, Canadian Tar sands, US Shale to the North Sea.

And don't forget the extra barrels that Iran is going to bring to the table.

I would not be surprised if oil trades around $5 - $15 for the foreseeable future. By that I mean at least the next couple of years.

I remember reading somewhere that Saudi's economy is based on them selling oil for atleast $50-$60. Sure, they can sustain short term cheap oil, but for how long coupled with the war in Yemen. It will increase their deficit and will create social unrest in a country used to luxuries and high pay for showing up to work and all the other subsidies the government provides

[clearedforlanding]

I remember reading somewhere that Saudi's economy is based on them selling oil for atleast $50-$60. Sure, they can sustain short term cheap oil, but for how long coupled with the war in Yemen. It will increase their deficit and will create social unrest in a country used to luxuries and high pay for showing up to work and all the other subsidies the government provides

Actually the sand people have a horrendous budget deficit and are considering an IPO of Aramco. If this happens it will create the worlds largest company with a market cap circa $1T. Using the past as a yardstick they will piss this up against the wall on hookers, Italian cars, watches and SW1W. (Shhh, don't mention the booze)

[DimPrawn]

With Diesel and Petrol now below £1 @ litre it's a certainty that the Fuel duty will be raised in the next budget

Climate Change is killing every living thing on the planet. We should all be paying £50 a litre duty, what price the planet Earth!

[PurpleGorilla]

It'll keep dropping until the Saudis feel they've killed off competition from shale oil, I expect. So the real question is: how low is too low to bother with shale?

They don't have that power on the market - this is global oversupply.

[PurpleGorilla]

Oil - How low can it go?

Climate Change is killing every living thing on the planet. We should all be paying £50 a litre duty, what price the planet Earth!

Whatever...

[seanraaron]

They don't have that power on the market - this is global oversupply.

Surely if they were hurting price-wise they'd close the taps a bit to try to increase it? Of course with the Iran embargo ending that might not matter, but I can't imagine the Saudis aren't contributing a significant amount of the world's oil still.