Oil Plunge Raises Fears of Societal Unrest

[SwimExpert]

it's also gambling that once mothballed, the US fracking/Shale wells will be difficult to get back into service. From what I know about the process, they should be pretty quick to clean up and turn back on, thus softening any rise in prices.

Whether that is a good gamble or not, I'm not sure. Part of lowering the costs has been for oil producers to become more picky about where they drill, and where they are allocating their rigs. I saw some article not long ago that had an interesting graph which showed that as domestic production has increased the total number of rigs in the US has decreased dramatically. Producers are focusing their efforts on selecting the best producing areas, and are moving rigs around to work the crap out of those areas. After about the first year of production, a fracked well tends to see a dramatic reduction in output. So, it's alot of collect it while it's gushing and forget about it later. So, on one hand, I don't think it's all that easy to just turn it back on later. But on the other hand, once the well is operational the expensive part is done and there is little money to be saved by shutting down, even if the selling price is low.

 

[martybegan]

it's also gambling that once mothballed, the US fracking/Shale wells will be difficult to get back into service. From what I know about the process, they should be pretty quick to clean up and turn back on, thus softening any rise in prices.

Whether that is a good gamble or not, I'm not sure. Part of lowering the costs has been for oil producers to become more picky about where they drill, and where they are allocating their rigs. I saw some article not long ago that had an interesting graph which showed that as domestic production has increased the total number of rigs in the US has decreased dramatically. Producers are focusing their efforts on selecting the best producing areas, and are moving rigs around to work the crap out of those areas. After about the first year of production, a fracked well tends to see a dramatic reduction in output. So, it's alot of collect it while it's gushing and forget about it later. So, on one hand, I don't think it's all that easy to just turn it back on later. But on the other hand, once the well is operational the expensive part is done and there is little money to be saved by shutting down, even if the selling price is low.

I guess it is a lot of assumptions, made by a lot of people. At least we don't have Venezuela's issue, where these low prices may lead to serious instability, or at least contribute to instability.

 

[Toro]

I fill up my car for $35.

It's awesome.

 

[konradv]

He only has something to do with it when it goes up, right? Since he'd get the blame, I'll give him the credit. Everyone's going to have a better Xmas because of Obamagas.

No, it's cause you're not well read.1. They want to put American shale production out of business 2. They don't want isis profiting from oil sales 3. They like sticking their thumb in Russia's eye. Did The Saudis And The US Collude In Dropping Oil Prices? | OilPrice.com

Funny that you should call me "not well read", when it seems you don't even read your own cites! If we colluded with SA, wouldn't that imply that Obama had something to do with it? Until you can provide more compelling evidence to the contrary, I'm going to keep saying, "Congrats Barack, your Obamagas is the boss!"

 

[tyroneweaver]

Who know's why the price of oil has plunged.
One thing I do know is, obama has had nothing to do with it.

Wrong! - Saudi's love Obama. Al Saud and other top officials showered the Obama family with more than $1.3 million in gifts throughout 2014. Plus Saudi Arabia & other OPEC countries are pumping record amounts of oil during Obama's administration just like they did under Clinton. They hated Bush's devaluing the US Dollars oil is sold in. The US dollar has been on a steady climb under Obama.

ya and the 2 hate oil shale.

Wrong! - Carter signed the Energy Security Act, allotting billions of dollars for the creation of a Synthetic Fuels Corporation that would provide loans, price guarantees, and other financial incentives to stimulate synthetic fuel development projects. A dozen companies immediately applied for money to support their oil shale endeavors and began gearing up for production.

Reagan & Bush killed oil shale. US oil production fell under Nixon, Reagan, Bush 1 & 2. It rose under Carter & Obama. Nearly all the US fracking boom happened after setback boundaries were removed for EcoPad drillers after Obama took office. This made fracking cleaner, cheaper & $15/barrel more profitable, unlike under Republicans. EPA regulations for Environmentally Clean Solvent Extraction cut US Oil Sands production cost to under $25/barrel vastly undercutting Canadian Dirty Tar Sands production cost.

oh really

Wow good for obama
90 pct of fracking is on private land
10 pct on federal.
obama has nothing to do with lower fuel prices
You can go all the way back to the Truman administraion. You'll never convince me barry has anything to do with lower fuel prics.