"OPEC Cant Stop North American Energy Boom"

[Economy 52,951]

http://www.usatoday.com/story/opinion/2014/12/21/opec-oil-price-gamble-fracking-us-energy-budget-revenue-column/20738305/

 

The a--lysis is that Saudi Arabias and OPEC using temnporary low prices to squeeze out the energy boom in North America is doomed to fail

 

First of all, most US frackers can still make a profit at $50 to $60 a barrel. Only smaller less efficient companies, or more difficult shale formations require $70 to $80+

 

This means US frackers wont go out of business unless prices drop below $50/barrel for quite some time. And most OPEC members require $100/barrel or more to balance their budgets so its unlikely they can last long enough to beat out US frackers

 

As for Canadian oil sand companies, as expensive as oil sands operations are, they are a long term project. Once an field is developed it will provide oil for up to a decade which means 1 or 2 years of low prices is a small percentage of its long-term average selling cost per field. Also Canandian oil companies have lots of cash reserves they can tap into

[Wild 1,296]

Good.

[ARTPOPisaChoice 946]

North American oil companies can thrive under really hard economic conditions, it's OPEC game to lose really.

BTW I love your political threads! It adds a lot of interesting comversation to the site!

[Economy 52,951]

North American oil companies can thrive under really hard economic conditions, it's OPEC game to lose really.

BTW I love your political threads! It adds a lot of interesting comversation to the site!

Here in Canada few companies are cancelling projects... As expensive as it is to develop oil sands, once an area is developed it will give out oil for up to 10 years. That means the average earnings of the fields throughout their life span wont be affected much even if the prices remain low for up to 2 years

 

The US shale oil is different. Each field lasts a lot less time and requires constant investment to maintain production... But its average costs per barrel have dropped with improved technology

 

OPEC cant succeed unless they keep these low prices persistent for some time. But they will kill their oil dependent economies/budgets in the process

 

And if they cut production then they loose market share. They are screwed either way :haha:

[LibraLove 1,281]

Slay. I'm loving the nearly two dollar a gallon price that I'm getting in the U.S. right now!

[Luc 4,776]

Slay. I'm loving the nearly two dollar a gallon price that I'm getting in the U.S. right now!

In my country you get 3,8x less for the same price because of environmental taxes and stuff

[LibraLove 1,281]

In my country you get 3,8x less for the same price because of environmental taxes and stuff

 

Is that because of the currency exchange between our countries or what?

[Luc 4,776]

Is that because of the currency exchange between our countries or what?

It's exported from Russia or an Arab country usually, and there's many taxes (excise duty) on oil to limit CO2 emission.

[Economy 52,951]

Is that because of the currency exchange between our countries or what?

ummm obvioisly hes converting to US dollars. He had said taxes

Gasoline is expensive in Europe. I know here in Canada gasoline was about $1.20 per litre before the recent fall in prices. If you comvert to gallons, gasoline is more expensive in Canada than the US....

But in portugal (my background) it was nearly $2 a gallon which is almost double what it is here in Canada. So we cant complain :emma:

[Economy 52,951]

It's exported from Russia or an Arab country usually, and there's many taxes (excise duty) on oil to limit CO2 emission.

once environmentalists get out of the way and finally let us build a pipeline to the pacific coast... U should buy from Canada. Were more friendly and stable than Russia or middle east :haha:

Plus were already the worlds 5th largest producer, and we have the worlds 3rd largest reserves :gaga:

[Echo 327]

I am loving prices rn. Lowest i've seen them since I was a child.

[Woolfsmck 2,763]

From the sales perspective, the U.S. buys the most by far. So hi or low, some part of the U.S. will benefit?

[Economy 52,951]

From the sales perspective, the U.S. buys the most by far. So hi or low, some part of the U.S. will benefit?

The US is still a net importer of oil and the consumer and manufacturing sector are still much larger in the US than the energy sector so these low oil prices will be of net benefit to the US as a whole

 

Here in Canada energy makes up a much bigger part of the economy and we export more oil than we import... and they believe this will be a net negative for Canada

 

Its expected to shave off 1% to 2% growth in Canada in 2015, however when you factor in the positives for the consumer, manufacturing as well as a weaker currency that comes from low oil prices, the real negative impact on a net basis they estimate will only be 0.25% to 0.5% with Ontario and Quebec which have the most manufacturing getting most of the positive impact

 

But for the USA, i think low oil prices will do more good than bad over-all. Unless your Texas or North Dakota

[Sebastien 16]

That's such great news, thank you for this!  :)

[Woolfsmck 2,763]

The US is still a net importer of oil and the consumer and manufacturing sector are still much larger in the US than the energy sector so these low oil prices will be of net benefit to the US as a whole

 

Here in Canada energy makes up a much bigger part of the economy and we export more oil than we import... and they believe this will be a net negative for Canada

 

Its expected to shave off 1% to 2% growth in Canada in 2015, however when you factor in the positives for the consumer, manufacturing as well as a weaker currency that comes from low oil prices, the real negative impact on a net basis they estimate will only be 0.25% to 0.5% with Ontario and Quebec which have the most manufacturing getting most of the positive impact

 

But for the USA, i think low oil prices will do more good than bad over-all. Unless your Texas or North Dakota

texas has a diversified economy, agriculture, manufacturing and energy.. Lower oil will spread the wealth more evenly across the spectrum where as hi oil benefited energy and its supporting factions .... North Dakota is booming from the 'construction' of the oil wells .. Once that slows down , so will that region.... The oil itself doesn't really benefit anyone besides the oil companies ... Lower demand will reduced interest in new construction projects however thereby slowing that segment.