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I'm just curious how those who claim the cartel controls the market will explain this. OPEC can influence prices, but only the demand side can really determine them.
Chavez was already hurting and this will hurt him further.He really is not very popular in his country. But he will cheat just as so many others did in the oil embargo.I still can't believe that people think Texas produces so much oil ;we peaked in the 1960's.
I would give Chavez more a life span at that price than most of the Canada Tar Sands and much of Texas.
Chavez survives playing to the bottom end. He can still do that with less money.
Chavez is not popular, and he's not Robert Mugabe. Once the lower oil price trickles down to the common man through reduced state benefits and job losses, Chavez will find himself in serious trouble. He's made what was once a reasonably diversified economy far too dependent on oil.
I agree that the Canadian tar sands will hurt, although consolidation in that sector will probably bring production costs down enough to keep it going - just to minimize losses on investment.
Some of the people that will really hurt are the hundreds of everyday types who found oil on their land across America, invested in expensive drilling equipment, and expected to be able to pay it off and make a modest profit. That was when oil was $130+.
Chavez was already hurting and this will hurt him further.He really is not very popular in his country. But he will cheat just as so many others did in the oil embargo.I still can't believe that people think Texas produces so much oil ;we peaked in the 1960's.
So who is less popular in their own Country, now? Bush or Chavez?
Out of the mindless politicks and back to energy -- Sure the rough stats are now Texas is producing (actually pulling from the ground) about 1/3 of the 1970 peak of 1MM barrels, annual. About the same as the 1930s, presently. Almost makes a perfect bell curve and a Super example of Peak Oil.
Difference now is it takes over 3 x as many wells just to get the 1930's level as it did then. Along with a lot more tricks. Lots more dollars and technology involved. Means a LOT more well (nyuk, nyuk) paying jobs and money now. At least for now. Part of why Texas is about the last standing job and real estate market in the US.
Oil goes down, and all the present Texas model goes buh, bye. Same with Natural Gas drilling, pipelines and processing across North Texas in the Barnett Shale. Buh, bye.
If this keeps on the current path, Texas will be running about even with, and straight into the hole with Michigan. Been there (and here) and done this game on both ends in the mid 80's.
Where did all the "Oil will be $200 a barrel and we will be rioting and resorting to cannabalism" posts go?
Chavez is very popular in his country by giving handouts to the poor. But his actions long term damage will eventually render the country an even bigger craphole which will be blamed upon someone else as Chavez will (does) have complete control. Think Fidel the 2nd.
Where did all the "Oil will be $200 a barrel and we will be rioting and resorting to cannabalism" posts go?
This rodeo is still in the early rounds, Mathguy.
As the price drops so do the valid supplies.
When you do estimates of what is available and in reserves, it is factored with "at what cost." As noted above, it costs more and more to bring Texas oil up, with less and less coming out.
Jumping into the big picture, at a world wide scale -- Means there may some trillions of barrels left at say $500 a barrel. But maybe only a trillion at say $50 a barrel. Under that, and even less. Those are just sample numbers. No one really knows the exact model and curves until we live them.
This is why you can always tell you are dealing with a bs'er when they start talking about "X or Y years supply." This is a economically recoverable factor involved that matters more than how much goo is left in the ground.
At each build up and collapse the cycles get closer and the peak prices get higher. Do you recall "underdamped" systems from any systems or controls math classes?
The whole Peak Oil model included that if demand dropped faster the the production dropped the prices could stay low all the way down the backside of the Production Bell Curve.
Presently the prices are coming down from demand dropping rather than additional supply or production. While that in itself could be a good thing, in this case it may not.
Sad part demand is dropping not because of better economics or renewable replacements but because the world economy is collapsing even faster.
Keeps going and you may still see that (metaphorically only, hopefully) cannibal, yet.
Chavez's weakness is that he has put so much of his oil money into subdising his popularity;not in investment like the Saudi's for example. But then we will gain alot more from lower oil orices because we are nolonger a big producer really. We peak in production here in Texas in the 60's as did the natio0n as evidenced by our evr increasing oil imports. Much of the new oil here is in the deep gulf of mexico and that is very expensive to produce.Not all oil is same cost to recover nad then ot are oil is eqaul in value. Many take alot more energy and investment in eqauipment to produce a refined product that is sold.Many opeople dont' even realise that we have few refineries that can use the sour crude oil the saudi's produce. We are a huge importer of Canadian oil and other sweet crudes. The oil refinerers are not crazy and are in fact mostly spending money to refine the oil that is from safer ;more stable poil suppliers than those from risky areas.As far as the american consumer we shpuld be thankful that the world consumtion especailly in like China which was buying oil companies just for their oil contratcs has allowed; otherwise gasoline and all crude products would be much higher. Only when aolternatives become competive in energy produed with oil will the world really strt getting off oil to much extent.
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