Petrol Price crisis......

[simon varley]

Originally Posted by superroo

Peak oil theory isn't a failed theory, it's just as time (technology) has rolled on and prices have increased the previous "unviable" oil fields are now worth drilling, eg Bakken Shales in Dakota.
So the theoretical peak keeps moving.

and that's exactly why the price is dropping now. The previous high price of crude made shale oil more economically viable so the Yanks brought more on line. The OPEC countries cracked the ***** that the Americans were importing less, so they kept their production high and hence the price drops as there is an excess of supply.

At some point soon the price of crude will drop below the point that the shale oil is viable, and as soon as they stop producing it, the OPEC guys will be laughing all the way to the bank as we hit $2 a litre.

[Syndrome]

Originally Posted by simon varley

and that's exactly why the price is dropping now. The previous high price of crude made shale oil more economically viable so the Yanks brought more on line. The OPEC countries cracked the ***** that the Americans were importing less, so they kept their production high and hence the price drops as there is an excess of supply.

At some point soon the price of crude will drop below the point that the shale oil is viable, and as soon as they stop producing it, the OPEC guys will be laughing all the way to the bank as we hit $2 a litre.

That is part of the story. The other part is to hurt the Russian economy as crude oil is one of their main exports.

[sexyxe]

Originally Posted by simon varley

and that's exactly why the price is dropping now. The previous high price of crude made shale oil more economically viable so the Yanks brought more on line. The OPEC countries cracked the ***** that the Americans were importing less, so they kept their production high and hence the price drops as there is an excess of supply.

At some point soon the price of crude will drop below the point that the shale oil is viable, and as soon as they stop producing it, the OPEC guys will be laughing all the way to the bank as we hit $2 a litre.

But won't that then repeat this cycle? They stop producing shale oil until it is economically viable, once fuel prices increase enough, they then start pulling more of it up, decreasing the price of oil again... Rinse and repeat?

[bobthebilda]

Originally Posted by sexyxe

But won't that then repeat this cycle? They stop producing shale oil until it is economically viable, once fuel prices increase enough, they then start pulling more of it up, decreasing the price of oil again... Rinse and repeat?

Theres alot of investors in the American shale business that are hurting big time at the moment. You only have to look at some of the companies on the Australian Market whos shares have more than halved. The american shale business wasnt even making money when oil was at $100 a barrel (they were being funded by alot of debt), thus imagine how good they are going now. In addition, the payoffs for shale wells comes short and sweet ( these wells are productive at start, but die rather quickly compared to your tradional oil well). Theres a good chance that over 75% plus, of US production is losing money at the moment, and once you shutdown a shale oil well, its a huge cost to get it running again. Any sane investor wont be returning to this situation for a long time. Smart investors out there would be buying 44 gallon drums, and throwing a bit of petrol in there each week. Come latevthis year, or early next year, petrol will be staying above $1.60 a litre.

[sexyxe]

Originally Posted by bobthebilda

Theres alot of investors in the American shale business that are hurting big time at the moment. You only have to look at some of the companies on the Australian Market whos shares have more than halved. The american shale business wasnt even making money when oil was at $100 a barrel (they were being funded by alot of debt), thus imagine how good they are going now. In addition, the payoffs for shale wells comes short and sweet ( these wells are productive at start, but die rather quickly compared to your tradional oil well). Theres a good chance that over 75% plus, of US production is losing money at the moment, and once you shutdown a shale oil well, its a huge cost to get it running again. Any sane investor wont be returning to this situation for a long time. Smart investors out there would be buying 44 gallon drums, and throwing a bit of petrol in there each week. Come latevthis year, or early next year, petrol will be staying above $1.60 a litre.

I see. Guess we will have to wait and see what happens then. Fuel in Darwin is 45% more expensive then Vic anyway. So we are screwed.

Zipping - peak oil can't be a false prophecy. If we keep using it, it certainly doesn't compose at the rate we are using it. It may just take a bit longer to get to that point though. Making an accurate prediction as to when that is would be a hell of a trick though.