Many oil analysts have attributed the latest enhance in global oil supply to elevated manufacturing from US shale producers, which has ramped up sharply in the final couple of years.
Is the shale growth right this moment on par with the dot-com growth or is it all a power play with OPEC to make sure US energy independence?
I believe OPEC’s objective is to “clear up” the US shale market, and that oil costs will finally rise – in my view though not earlier than early 2016 – when OPEC completes its goal of cleansing up the American marginal market.
The extra obvious losers within the current oil climate are Iran and Russia the former after all being Saudi Arabia’s archrival in the area, and the latter being no nice pal of the Saudis’ either.
The pinch to shale might simply be “a wonderful byproduct to screwing the Iranians and the Russians. Doing nothing has really been a very sensible move by the Saudis. With each transfer additional down in price, the actions of the Saudis turn into extra intently watched, reinforcing the country’s position as the world’s oil superpower.
Some US producers are surviving proper now as a result of they hedged their oil manufacturing at $90 a barrel, although these arrangements will eventually expire making life “much more difficult” if not “unattainable” for these companies.
So whereas it is evident to anyone with a half mind at present that OPEC is utilizing decrease prices as a struggle in opposition to US shale producers, the million greenback query remains: How low can these producers go before they start shutting down?
Possibly it is high time for the US to start out subsidizing or by some means helping the US oil producers until OPEC blinks?
Let’s be brutally candid: There may be nothing more essential to our future international political strategy than the liberty of not having to import our oil from OPEC nations. chlorinated toluene tower For those that will question this and convey up the associated fee issue into the equation, at the very least consider the cost of this versus the price of Middle East wars and increased navy presence. A fast evaluation would find that a proactive assist of US lead oil of any/all kinds would price so much less than the opposite different talked about and by a major order of magnitude.
Another option could be to perhaps accomplice with the fringe OPEC members and have them break away from the cartel – which might nearly drive the remaining core OPEC members to lower prices. This may after all mean stepping into bed with unusual bedfellows similar to Venezuela for example and even Russia – not an OPEC member- however deliver OPEC to rethink their strategy?
At the top of the day, who is the worst of foes in right here or better who’s going to assist us win the Oil battle- the largest commodity play on Planet Earth? Venezuela/Russia or OPEC?