BBC on Oil - are low prices here to stay

Mallotum_X

The bbc seems to think so

http://www.bbc.co.uk/news/business-30814122

purch

Predicting the oil price is a bit of a mug's game.

As that is the first line of their "analysis" one wonders why they bothered.

Generali

The SNP should start worrying about fiscal devolution!

The number of rigs going in the US is falling already and there is probably some more to go. However our experience with technology tells us that unconventional oil is only going to get cheaper to access and perhaps the Saudis are best off getting the price today for the oil rather than nothing tomorrow.

Add to that the fact that the political winds are blowing against burning stuff to get around and I think the future looks bleak for the oil industry.

ruggedtoast

The Saudis are very worried about the oil industry drying up and are pouring a lot of money into Trans National Education at the moment. Its an attempt to upskill their nationals into actually being able to do something apart from buy expensive watches and sit on Business Class flights to London and New York.

They are having limited success.

The assumption that Scotlands comparatively tiny offshore oil industry would provide the backbone of any kind of modern economy is patently absurd.

cells

Oil won't go away in our lifetimes nor will its use decline this side of 2050 and perhaps not even this side of 2100

The thing with oil is that it is considerably more expensive than NatGas and that is its future competition. (Not expensive to produce but sold expensively)

you have $50 oil or the same energy in NatGas for $15

Plus it costs more to refine and transport that oil than to refine and transport the NG


technology lock in means there is no large switch and to do the switch a decade or more ago would have been impossible there simply wasnt enough nat gas in the world but that is changing.

A lot of the big energy producers think nat gas will go from the lowest used fossil fuel to the highest. It used to be oil was the worlds primary energy but coal surpassed it this decade.

cells

Generali wrote: »

The SNP should start worrying about fiscal devolution!

The number of rigs going in the US is falling already and there is probably some more to go. However our experience with technology tells us that unconventional oil is only going to get cheaper to access and perhaps the Saudis are best off getting the price today for the oil rather than nothing tomorrow.

Add to that the fact that the political winds are blowing against burning stuff to get around and I think the future looks bleak for the oil industry.

A lot of oil so cheap to produce it works fine at $10 so it won't fall off a cliff


think of it this way. Coal isn't taxed in the UK or much anywhere else its the cheapest fossil fuel to buy but it costs so much to mine and ship that governments can't really piggy back on them

gas is often in the middle. It does have taxes (abive and beyond normal taxes) eg I think in the UK the NG royalties are 62%. Its so cheap to produce nations are able to ride it like a donkey and you get places like Qatar.

Oil is the cheapest of all to produce yet the most expensive to buu. Its so cheap that some nations have 80-98% taxes on it. They flog that muel for all its worth



What will haooen if proces fall is that nations will lighten the burden on oil and gas as some royalty is better than none. It could even go to zero royalties as the other taxes and jobs are better than nothing which is where coal is today.


if aliens gifted us a star trek type transporter and overnight car use went to zero imo the oil industry wouldn't disappear but the coal industry would! Power stations woild switch to $5 to $10 oil which would undercut $15-30/ton coal at which price much of the worlds coal mining would stop

Thrugelmir

Oil is already 21% high than than it's low point. So what's regarded as "low" ?

purch

Thrugelmir wrote: »

So what's regarded as "low" ?

Judging by the Opec break even points in that article it's about $130 plus :eek:

cells

Thrugelmir wrote: »

Oil is already 21% high than than it's low point. So what's regarded as "low" ?

Lpw is a subjective term and it just means lower thab the very recent past

go back further and for oils history its been below $30 more than it has been above $30 for most of its history

antrobus

cells wrote: »

Lpw is a subjective term and it just means lower thab the very recent past

go back further and for oils history its been below $30 more than it has been above $30 for most of its history

Historically speaking, it seems that real price of WTI was about $20 in the years 1946-1973 i.e. right up until OPEC decided to flex its muscles, and traded at around $35-$40 for much of the 80s and 90s.

In that context $50 doesn't seem all that cheap.

http://www.macrotrends.net/1369/crude-oil-price-history-chart

wymondham

when my car gets renewed then a Humer it is!


Jeremy Clarkson must think he's gone to heaven!!