$50 Oil Could Crush American Shale Growth

https://oilprice.com/Energy/Energy-General/50-Oil-Could-Crush-American-Shale-Growth.html

by toomuchtodo • 9 months ago

31 49 9 months ago

oilprice.com

Finnucane• 9 months ago

oh no!

lawlessone• 9 months ago

Won't someone think of the shareholders ;_;

rogerrogerr2• 9 months ago

If you are American, it is _exceptionally_ short sighted to think that energy production in your country is not a good thing to have.

datadrivenangel• 9 months ago

The whole point of shale is that you can get it going again quickly and piecemeal based on the price of oil. It puts a large plateau/floor on oil at $~60 per barrel which is geopolitically very useful.

alephnerd8• 9 months ago

Depends, breaking below $60 per barrel does lead to significant layoffs and it's difficult to rebuild that know-how because knowledge isn't 100% elastic.

The oil glut itself is largely because of the KSA and Russia in the midst of a mutual price war as well as the US expanding it's own production.

That said, it's still an open question of whether a glut will exist or not - at this point it's China, India, and Japan that's become the primary driver for oil prices because they are getting similar deals from both KSA and Russia, and are trying to pressure other suppliers to give similar deals.

actionfromafar3• 9 months ago

Easy solution, bomb more Russian oil infrastructure.

fraserphysics• 9 months ago

Yes! There's more oil in the ground than we should ever burn. The places where it's cheap to get out are ruled by unpleasant people. Shale limits the price they can charge. Yea shale. However, low prices encourage putting CO2 in the air. Boo shale. I wish we would find a better way to reduce use than paying unpleasant people high prices.

consumer4514• 9 months ago

Yes! There's more oil in the ground than we should ever burn.

I don't think that everyone realizes what would happen if we did so. [0]

Our calculated global warming in this case is 16°C, with warming at the poles about 30°C. Calculated warming over land areas averages ~20°C. Such temperatures would eliminate grain production in almost all agricultural regions in the world (Hatfield et al., 2011). Increased stratospheric water vapor would diminish the stratospheric ozone layer (Anderson et al., 2012).

My question is, what is going to stop this trajectory?

https://mahb.stanford.edu/library-item/what-if-we-burn-all-t...

jameslk• 9 months ago

It hasn’t kept up with inflation and the price of hard metal commodities so it’s more like the price keeps going down:

https://www.macrotrends.net/1369/crude-oil-price-history-cha...

https://www.macrotrends.net/1380/gold-to-oil-ratio-historica...

Given the sharp rise in production since 2010, it seems the flat price has more to do with increasing supply and less to do with waning demand:

https://www.eia.gov/dnav/pet/hist/leafhandler.ashx?n=pet&s=m...

https://ourworldindata.org/grapher/oil-production-by-country

mathgeek• 9 months ago

There are a lot of things such as situation _could_ do.

shrubble• 9 months ago

The rule of thumb is that for every penny of gas price at the pump, averaged over the year, it takes $1 billion of consumer spending.

So if the gas prices drop by say 20 cents per gallon vs last year, that’s $20 billion more dollars in consumer pockets that can be spent elsewhere.

downrightmike• 9 months ago

So oil dropping is like reverse tariffs

alephnerd8• 9 months ago

That's why China, India, and Vietnam have continued to purchase Russian oil, even if resorting to barter agreements such as Vietnam's procurement of the SU-35 [0] and India's agreement for a JV to domestically manufacture the SJ-100 [1] (which also helps their French partner Safran recoup costs, as Safran is part of India's domestic jet engine program and was a partner in the SJ-100 project before sanctions began).

And it's not like Asian countries are purchasing less from other sources either - they're just using the Russian barter to force MFN deals and discounts from other suppliers.

[0] https://defencesecurityasia.com/en/vietnam-russia-su35-fight...

[1] https://www.reuters.com/world/india/india-signs-pact-with-sa...

eulgro• 9 months ago

Uh. So we should jack up prices to reduce consumption elsewhere. That will reduce oil consumption and every other consumption at the same time, it's an environmental win-win.

neoecos• 9 months ago

It amuses me how OPEC is the world largest cartel... And they go with it

$50 Oil Could Crush American Shale Growth

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