So far I have been replied to with:
OPEC controls the market -
OPEC used to be the say all end all to oil. Their problem is very transparent now though. If they artificially inflate prices, they will lose market share to people who can produce oil at those higher prices. They have very cheap oil, and the only thing they can do is produce more of that cheap oil to hamper foreign production...but at the same time they are trying to keep prices inflated while pumping and selling as much oil as they can. They simply don't have as much power as they used to....because they don't have an option like they used to.
No I insist, OPEC controls the market because if they say they are going to cutback production, the price will jump
I think you are half right. If they said we're dropping production, yes prices would skyrocket....right along with everyone else's production, and then we would have a supply glut...kind of like right now. The thing is...they can't say they are decreasing production...and they don't want to say they are increasing...but they are.
Oil is too big to fail
So your best argument is that oil is too big to fail? The government is going to bail out oil companies if they go belly up? I think growth and profits accelerate when the price of energy comes down...I would think consolidation in the oil industry would just lead to organic economic growth...rather than a disaster. It would be a disaster to people who have invested too heavily in oil.
"because we depend on it", "oil is king", "energy density", oh and corn...just fucking corn http://redd.it/32tiu1
not going to reply, unless you insist
My own argument - The dollar could be on the decline
well semitard that is a good argument, why thank you semitard, but the problem is still there if the dollar inflates price...we have a supply glut. If the value of the dollar decreases, and oil continues to climb, it becomes economical for a lot of wells to come back online, and production will ramp, and at the same time, if prices are up, then demand will most likely go down. I suppose we could lift the export band at that point (or any point), but then what do you think OPEC will do?...not stop drilling and losing customers, that is for sure.
Rig count
Jaffe put the break-even prices for oil production at $37 in the Eagle Ford Shale in South Texas and the Bakken formation in North Dakota, $48 for the Permian Basin in West Texas and eastern New Mexico, and $43 for the Mississippi Lime in Oklahoma and Kansas.
There are roughly 2,500 to 3,500 drilled but uncompleted oil wells in the United States, according to analysts at IHS Inc. (NYSE: IHS). As many as 1,400 of those wells are located in the Eagle Ford shale play in south Texas.
What do you think rig count is going to do if oil goes up?
Oh and plus, there are a lot of wells that still have to be completed by law...
Wells must be completed within one year of being drilled by state law. More than 100 wells will hit that deadline in June.
Demand is going to increase
This is highly speculative, and loses weight as prices increase...and in my opinion a little ignorant considering the current oversupply. I don't think that demand has had its run and is over. I think that the control over the price of oil has had its run, and is now over. Production and demand are going to dictate prices, not so much politics and geology.
Iran deal is going to fall through
Probably, maybe not. Doesn't change the fact that they are increasing production and still have outlets to sell their oil.
Submitted April 17, 2015 at 08:36PM by Semitard http://ift.tt/1CXUAW3
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