This Sunday (if you are interested in what is going on with oil worldwide) then you should watch the first 5 minutes of the August 23rd, 2015 Fareed Zacharia broadcast or go to:
www.cnn.com/Fareed
Some of the interesting quotes:
"We are witnessing a historic fall in the price of oil. 50% in less than a year. When a similar drop happened in the 1980s the Soviet Union Collapsed.
Nick Butler formerly of BP "We are in for a longer and more sustained period of low oil prices than in the late 1980s."
Why?
A Perfect Storm.
A decade of high oil prices encouraged producers throughout the world to invest vast amounts of money to produce oil. Those investments were made and will keep supplies going for years.
Leonardo Maugeri: "There is no way to stop this phenomenon."
Prices could actually drop down to 35 dollars a barrel next year.
Saudi Arabia is the primary reason the price of oil is declining.
Leonardo Maugeri: "(the Saudis know it hurts them but they hope it will hurt everyone else more)"
One of Saudi Arabias main reasons is to put Americas producers of Shale and Tide Oil out of business.
end quote from todays Fareed Zacharia Broadcast.
He goes on to explain the effects of Saudi Arabia on Russia, Iran, Venezuela etc.
However, the point being if the Saudis cannot drive American Shale oil and ocean oil out of business with these lower prices then they might be the ones driven out of business eventually instead. And I think that Russia would also like Saudi Arabia to permanently go out of business.
The U.S. isn't interested in that but Russia is which is why they have this oil producers game of chicken going on with Saudi Arabia to see who can out produce who at very low prices. And this among other factors is likely to drive oil by next year down to 35 dollars a barrel or lower.
How low can Saudi Arabia go and break even? It is said they can go down to 25 dollars a barrel oil and still break even which we also might see in 1 to 2 years also.
So, what is going to happen in the next few years? a lot of poor people around the world are going to take a great vacation while the low prices last because whenever this ends many will starve to death when oil prices return to 10 to 20 dollars a gallon even here in the U.S. and more than that world wide.
This appears to be the direction all this is going now. However, there could be other factors (many of them) that will also modify this projection into the future.
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