Is Shale oil still profitable. For the present the answer is probably no.
But, because of the investments of Banks in Shale oil, they likely will
Still go forward mining it for up to a year or more because it costs
to shut down and then start over once you have shut down.
So, it likely will be a waiting game now. How much is it going to cost
the Banks financing Shale oil? It depends upon how long the Shale oil world
can
hold out with oil somewhere between 12 dollars a barrel and 50 something
dollars a barrel? 1 month? 6 months? 1 year? 2 years?
In the meantime if you have an underground storage for your Gas or diesel it
might be in your interests to stock up somewhere between now and 12 to 15
dollars per barrel of Oil. Because what goes down must also come back up.
But, the real question is: "When does the price come back up and by how
Much?" The people who know this answer: "Likely Saudi Arabia or Opec or
others"
are likely to make a mint with this knowledge.
begin quote:
Oil just dropped below $60 per barrel. What’s going on?
The price for a barrel of West Texas Intermediate crude oil -- a U.S. benchmark -- closed today at $59.95, a level of great psychological significance. Ever since Thanskgiving, when member nations of OPEC decided not to cut oil production, prices have tumbled. But this is also part of a longer term pattern, a fall of over $40 per barrel since late June.
The last time prices for WTI crude were below $ 60 per barrel was July of 2009, amid the Great Recession.
On the one hand, the plunge in oil prices has been a boon to American consumers, who are now enjoying nationally averaged prices of $2.62 per gallon for regular gasoline. A year ago, in contrast, the national average price was $ 3.26, meaning that drivers are now paying a striking 64 cents less for a gallon of gas on average.
What's more, gas prices may have further to fall, as the market responds to the latest declines in oil prices.
One catalyst in the market today, according to Bloomberg, was comments by Saudi Arabia's oil minister, Ali Al-Naimi, who suggested there was no need to cut production, and that the oil market will naturally correct.
What's particularly striking is to find oil this low not in a time of dramatic recession, as in 2009, but rather, in a time when there's no immediate economic crisis. To find prices below $60 at a time significantly prior to the 2009 economic crash, you have to go back to early 2007.
end quote from:http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/11/oil-just-dropped-below-60-per-barrel-whats-going-on/
I was thinking more about the price today. The price drop actually says less about Saudi Arabia and Opec and more about economic collapse because of collapsing property values in China more than anything else with the resulting panic of people and businesses in China after seeing what happened in the U.S., then Europe and Japan. So, Chinese people are cutting way back on buying gas and diesel so they can save their money to survive whatever economically happens in China. The people are very scared. All the older people in China remember millions of people starving to death from the 1940s through the 1980s. So, the memory of millions starving is not as far away as it is to Americans which have to go back to the Great Depression for these kinds of experiences. For the Chinese this is a 40 year or more closer and very real experience for many still alive there now.
So, what is actually happening is Chinese people buying less gas and diesel so they don't starve to death in whatever comes next there. And then, also all nearby countries sort of doing the same thing so they can survive whatever comes next too.
Even though the U.S. is doing relatively okay now, China and countries tied closely economically like South Korea, Japan and others are fighting deflation (China and Japan) and joining China in recession (Japan and South Korea) and others in the Pacific Rim nations.
I was thinking more about the price today. The price drop actually says less about Saudi Arabia and Opec and more about economic collapse because of collapsing property values in China more than anything else with the resulting panic of people and businesses in China after seeing what happened in the U.S., then Europe and Japan. So, Chinese people are cutting way back on buying gas and diesel so they can save their money to survive whatever economically happens in China. The people are very scared. All the older people in China remember millions of people starving to death from the 1940s through the 1980s. So, the memory of millions starving is not as far away as it is to Americans which have to go back to the Great Depression for these kinds of experiences. For the Chinese this is a 40 year or more closer and very real experience for many still alive there now.
So, what is actually happening is Chinese people buying less gas and diesel so they don't starve to death in whatever comes next there. And then, also all nearby countries sort of doing the same thing so they can survive whatever comes next too.
Even though the U.S. is doing relatively okay now, China and countries tied closely economically like South Korea, Japan and others are fighting deflation (China and Japan) and joining China in recession (Japan and South Korea) and others in the Pacific Rim nations.
