william the wie
Gold Member
- Nov 18, 2009
- 16,667
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While there are disagreements as to importance there are three forces driving oil prices down:
Iraq has 1/5 of the world's known oil reserves and if run even semi-competently oil could hit $15/bbl so Saudi Arabia and other oil states are funding ISIS and putting on a price war to get out of oil and into cash.(other reasons may also exist for this strategy such as alternative energy, opposition to Iran and other things.)
Demand for imported oil in emerging markets is declining in part due to slowing growth but also due to stabilization making drilling possible in more of the world. That last bit tends to be ignored but it more directly means that less oil needs to be imported.
Drilling technology is getting cheaper. Hydraulic fracking gets the publicity but increasingly artillery and shaped charges are giving more bang for the buck. Also artificial diamonds are getting cheaper to make so diamond rather than diamond tipped drills will also be coming online in the not too distant future.
There is no reason to believe that any of these trends will reverse prior to He3 mines in outer space making energy really cheap. So, what consequences can be expected?
Iraq has 1/5 of the world's known oil reserves and if run even semi-competently oil could hit $15/bbl so Saudi Arabia and other oil states are funding ISIS and putting on a price war to get out of oil and into cash.(other reasons may also exist for this strategy such as alternative energy, opposition to Iran and other things.)
Demand for imported oil in emerging markets is declining in part due to slowing growth but also due to stabilization making drilling possible in more of the world. That last bit tends to be ignored but it more directly means that less oil needs to be imported.
Drilling technology is getting cheaper. Hydraulic fracking gets the publicity but increasingly artillery and shaped charges are giving more bang for the buck. Also artificial diamonds are getting cheaper to make so diamond rather than diamond tipped drills will also be coming online in the not too distant future.
There is no reason to believe that any of these trends will reverse prior to He3 mines in outer space making energy really cheap. So, what consequences can be expected?