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Looks like OPEC knows how to price out competitors. But why should we care? There's less burden for us at the pump.
Quote:
(Reuters) - Sinking oil prices caused a nearly 40 percent drop in the number of new well permits issued across the United States in November, pointing to a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.
Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info showed 4,520 permits for new oil and gas wells were approved in November, down 37 percent from 7,227 in October.
New permits, which indicate what drilling rigs will be doing 60-90 days in the future, showed for the first time this year steep declines across the top three U.S. onshore fields: the Permian Basin and Eagle Ford in Texas and North Dakota's Bakken shale.
Them Domestic production increases and before it hits $4..
This is not a business you simply start overnight and with the threat of OPEC doing the same thing again investment from private interests will be very hard to come by.
IMHO OPEC "screwed the pooch" this time. It'd be a case of who "blinks 1st" and;
That depends on how low they can go and how long they can take losses. If they get it below the profitability margin of these US companies it's not going to take very long to put them out of business. These national oil companies make Exxon look like paupers.
Temporary only, they will take a short term loss to drive the emerging competition out of business and then it's back to $4 a gallon at the pump.
Dunno about that. the question is can all of the members of OPEC survive this? And if not....will they start producing more?
Also....while they could price out our production, once it goes back up we could just start producing again. The companies in the US aren't going to go out of business.....
That depends on how low they can go and how long they can take losses. If they get it below the profitability margin of these US companies it's not going to take very long to put them out of business. These national oil companies make Exxon look like paupers.
Word is the profit cut off point for fracking is about 40 dollars a barrel. Iran IS in some real trouble already and so is Russia even tho Russia ain't OPEC.
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