Bank of America sees $50 oil as Opec dies.

[Puremallace]

If you live in the US then you shouldn't complain about gas prices IMO

No we should not. There is a very large lobby force out right now trying to export our oil. In regards to OPEC. GOOD LET THEM ROT

Venuzuela
Saudi's
Russia

They can all rot in hell

[Grummgug]

What's important to remember is that the loony liberals, back ten years, were SCREAMING about "peak oil", that we had begun a permanent decline in production, and we NEEDED to get on solar ASAP. Liberals confidently drew charts that extrapolated out current trends to show the oil industry was doomed. Permanent high prices. Republicans attempted to say we could have cheap oil again but THAT was met with the usual mockery from the liberals.

And now, we have an oil glut.

This played out before. In the 1970s. We had a shortage in the 1970s and the liberals made the same insane arguments back then. Wound up with an oil glut. And here we are with another one.

This shows the ENORMOUS fallacy in blindly projecting current trends to make a point. What liberals REFUSED to model was that new technology such as fracking would come online to add supply. They refused to model things like Mexico increasing its output, or OPEC refusing to cut output.

All you need to do is google "peak oil" and do the image search to see liberal scare tactics:





HERE is what oil production actually looked like, destroying those projections:



Its very important to remember how wrong the liberals were on this issue, because they are ALSO doing it on GLOBAL WARMING.

When liberals discuss global warming, they simply project out current trends and never factor in nor model anything that could alter that course. A big factor is that solar is getting cheaper to produce and more efficient, to the point where it will be cheaper than oil by 2030, without us having to do anything but allow the pace of technology to continue. Global warming alarmist models assume we keep burning oil all the way to 2100, and then draw their INSANE charts. We will be off oil by 2030, and that means global warming is not going to happen.

But, just as they did with the peak oil scare, they need to keep voters in a state of fear to drive election wins. But they are wrong and insane....

[Rukentuts]

What's important to remember is that the loony liberals, back ten years, were SCREAMING about "peak oil", that we had begun a permanent decline in production, and we NEEDED to get on solar ASAP. Liberals confidently drew charts that extrapolated out current trends to show the oil industry was doomed. Permanent high prices. Republicans attempted to say we could have cheap oil again but THAT was met with the usual mockery from the liberals.

And now, we have an oil glut.

For maybe a decade.

Its very important to remember how wrong the liberals were on this issue, because they are ALSO doing it on GLOBAL WARMING.

Oh mother of God.

Yes, an emergence of new previously unknown technology is just like failure to grasp a concept called the greenhouse effect.

[ringthree]

The argument that the article makes is kind of self-contradictory. The more loose the oil market becomes (price drops and fluctuations) the more OPEC has strength because it still has enough clout to stabilize the general price of oil. Honestly, I don't know the political/economic motivation to not raise the price of oil, but I believe their are two potential scenarios. One, it could very easily be because it keeps down the income of ISIS which is essentially living off of selling oil it has seized in territorial gains. Two, it could be because US (and others) oil production has a relatively high break point for profitability.

In either case, this isn't really sustainable for OPEC because they require the income from oil to support their domestic economies, and given the recent tendency of ME countries to become unstable if domestic payments are not maintained, they will need to increase the price of oil eventually. So, the price drop is a short-term thing, and a direct decision made by OPEC. It is not a sign of weakness for OPEC. It is basically trying to drive out competition by lowering prices (this is one of the reason it is a cartel and why some countries don't participate in their pricing regime).

[Grummgug]

For maybe a decade.
Oh mother of God.

Yes, an emergence of new previously unknown technology is just like failure to grasp a concept called the greenhouse effect.

Solar is going to be DIRT cheap and highly efficient by 2030. It is insane to think we will be burning fossil fuels past that date. Global warming is an insane theory.

- - - Updated - - -

The republicans were correct about everything when it came to oil. Absolutely everything.

[Keyboard Champion]

Solar is going to be DIRT cheap and highly efficient by 2030. It is insane to think we will be burning fossil fuels past that date. Global warming is an insane theory.

I think it's more insane to believe there is no such thing as global warming.

[Rukentuts]

I think it's more insane to believe there is no such thing as global warming.

I was going to link shit, such as how the heat trapping properties of CO2 which have been proven for over a hundred years, or how the rise in global temperatures cannot be attributed to the sun and the equations cannot be replicated without drastic human activity, but he'd handwave that shit.

[ringthree]

Solar is going to be DIRT cheap and highly efficient by 2030. It is insane to think we will be burning fossil fuels past that date. Global warming is an insane theory.

Your argument does not follow. While I agree that alternative energy is inevitable and is rapidly becoming competitive, this was largely because of the high price of oil for so long. But I fail to see how this relates to your argument that global warming is an "insane theory".

Could you explain that part?

[Reeve]

Bakken sees 10% profit at about $40-43.

And the recent decision by the Saudis heralds that OPEC as we knew it is gone.

The graph I showed was break even on non-producing assets. Stuff that hasn't even been drilled yet. And it's an average across all sources of a particular type, so some will be higher and some lower. Is the $40-43/bbl profitable number you're using for already drilled producing wells, or is it for undeveloped fields, where you may drill several dry wells or poorly producing wells in your efforts to get good production wells?

The chart I showed was straight out of a Fugro trading and strategy presentation.

[ringthree]

The graph I showed was break even on non-producing assets. Stuff that hasn't even been drilled yet. And it's an average across all sources of a particular type, so some will be higher and some lower. Is the $40-43/bbl profitable number you're using for already drilled producing wells, or is it for undeveloped fields, where you may drill several dry wells or poorly producing wells in your efforts to get good production wells?

The chart I showed was straight out of a Fugro trading and strategy presentation.

I have heard that the average US profitability point is around $80 for fracking/oil sands. This has been reported in several places (most recently I heard this on an NPR series).

[Reeve]

Solar is going to be DIRT cheap and highly efficient by 2030. It is insane to think we will be burning fossil fuels past that date. Global warming is an insane theory.

- - - Updated - - -

The republicans were correct about everything when it came to oil. Absolutely everything.

Jesus Christ, does everything have to be an ideological debate with you? This topic isn't about global warming or dirty liberals or whatever else you're on about.

[Rukentuts]

The graph I showed was break even on non-producing assets. Stuff that hasn't even been drilled yet. And it's an average across all sources of a particular type, so some will be higher and some lower. Is the $40-43/bbl profitable number you're using for already drilled producing wells, or is it for undeveloped fields, where you may drill several dry wells or poorly producing wells in your efforts to get good production wells?

The chart I showed was straight out of a Fugro trading and strategy presentation.

Existing afaik. They said ND costs as low as $29 and almost all are turning 10% profits at $40.

Could this stem new wells? Probably, but I don't see a decrease because of it.

Edit:

http://www.reuters.com/article/2014/...0SA26L20141015

[Reeve]

I have heard that the average US profitability point is around $80 for fracking/oil sands. This has been reported in several places (most recently I heard this on an NPR series).

Eh, that's kind of what I'd heard in the past as well, but I think that's sort of a finger in the air analysis sort of deal. The truth is a whole lot more complex than that.

Business Insider claims Bakken is around $60 in break-even, for example:



And, again, if you're only breaking even, you aren't giving the investors the return on their capital they need to justify the investment.

[Orange Joe]

If you live in the US then you shouldn't complain about gas prices IMO

Why just because yours are higher?


yeah.... no.. I bitch about it all I want.

[Reeve]

Existing afaik. They said ND costs as low as $29 and almost all are turning 10% profits at $40.

Could this stem new wells? Probably, but I don't see a decrease because of it.

Stemming new exploration is a big freaking deal though, since that's a large part of what causes future supply crunches. There's a tipping point of instability past which you start having really nasty boom bust cycles based on a dearth of new exploration followed by a glut of new exploration, back and forth. It's bad for the industry, bad for prices overall (which have an upward trend in that sort of market due to higher average operating costs), and bad for world economies, that have to deal with greater risk and volatility.

It's just bad.

[Rukentuts]

Stemming new exploration is a big freaking deal though, since that's a large part of what causes future supply crunches. There's a tipping point of instability past which you start having really nasty boom bust cycles based on a dearth of new exploration followed by a glut of new exploration, back and forth. It's bad for the industry, bad for prices overall (which have an upward trend in that sort of market due to higher average operating costs), and bad for world economies, that have to deal with greater risk and volatility.

It's just bad.

I want price instability to increase, as in the long term hopefully it will get us to kick the habit.

[Reeve]

I want price instability to increase, as in the long term hopefully it will get us to kick the habit.

We're already on our way towards technology that will help us kick the habit. Ruining the world economy while we're working on that isn't good for anyone.

From the same Fugro presentation:

[Gilian]

I do not want high gas prices anymore then anyone else does, but what they are doing with such a sharp decrease is not helping anyone but themselves (Saudi Arabia)

The idea behind it is that other oil faring countries dont have the bankroll to sustain such low prices and make any money after refining and shipping costs along with payroll and maintenance of their facilities, a few companies can weather the financial burden for a long time, driving out the competition due to them not having a lot of money to do that.

What will happen after those companies sell to subsidiaries of the main company is that without competition the prices will go higher than what they are today.

Short term its great for us consumers, long term we will be forced to pay higher prices due to little competition and there is nothing we can do about it unless electric cars and vehicles become more mainstream.

So maybe this is a good thing long term and there will finally be more reason to work on electric cars becoming mainstream.

[ringthree]

Eh, that's kind of what I'd heard in the past as well, but I think that's sort of a finger in the air analysis sort of deal. The truth is a whole lot more complex than that.

Business Insider claims Bakken is around $60 in break-even, for example:



And, again, if you're only breaking even, you aren't giving the investors the return on their capital they need to justify the investment.

I think that "break-even definition" may be the explanation of the difference. Your chart shows true break-even points, where the extractor literally is forced to make a decision to keep the wells open or not. The NPR report (which was definitely more finger in the air, as you put it) was more about a decent profitability point. Also, at least part of the report had to deal with the cost of opening new wells, which definitely has a higher "break-even" point than already sunk wells.

I do not think that either set of information contradicts the other necessarily.

[Rukentuts]

Ruining the world economy while we're working on that isn't good for anyone.

Countries need to stop relying on commodity markets for their money.