I work for a division of a major oil company, and though times are tight, I don't think OPEC and Russia can continue at this level for more than another 2 years. I understand even Saudi Arabia is losing money at the current price. It looks like it's a bid to drive the smaller shale producers out of business.
Economist here. If you look at the data, the declining prices have been accompanied by *declining sales* of crude oil. To an economist, this says that the declining prices are not a result of sellers cutting prices to try to drive out alternative--the declining prices are a result of buyers saying, well, we don't need/want as much of this stuff. (Sales from shale are included in the data on sales of crude oil, btw.) Sales of natural gas and coal are rising as prices are falling, which says that sellers of natural gas and coal are lowering prices in order to sell more.
6 comments:
I work for a division of a major oil company, and though times are tight, I don't think OPEC and Russia can continue at this level for more than another 2 years. I understand even Saudi Arabia is losing money at the current price. It looks like it's a bid to drive the smaller shale producers out of business.
I think that's exactly what it is, Graham. And it's working.
Economist here. If you look at the data, the declining prices have been accompanied by *declining sales* of crude oil. To an economist, this says that the declining prices are not a result of sellers cutting prices to try to drive out alternative--the declining prices are a result of buyers saying, well, we don't need/want as much of this stuff. (Sales from shale are included in the data on sales of crude oil, btw.) Sales of natural gas and coal are rising as prices are falling, which says that sellers of natural gas and coal are lowering prices in order to sell more.
You economists are always messing up my theories.
Sorry.
Uh oh, this could be the end of Rick Perry's "Texas miracle" Presidential campaign?
What?
Post a Comment