Limited understanding here too. But while they haven't really pushed that many people out of business, what they have done is halted the increase in US production and even more importantly forced pretty much every major oil company in the west to make huge cuts to their CAPEX. That means less new production in the coming years and less cash spent on trying to find new oil rich areas in the west. All of this, in the long run, is slowing down the oil production business in the west. It won't be showing up yet as the fields that are currently being produced will probably (at least the majority of them) be completed anyway but things will be slowing down considerably in the west in a couple of years, simply because money is not spent now on exploration and starting new projects.
The estimate is that it would take roughly 9 months for US shale companies to get up and running again. One of the top brass in OPEC claims they expect oil prices to rebound in 2016 from what one might assume is in part to the decline of production from NON-OPEC countries. That said, within OPEC apparently Venezuela is going to propose production cuts on the October 21st meeting. I don't expect much to come from the discussion, but it's compelling though.
Good question. Wish I knew more about the world market in crude and geopolitical realities. While growth is likely to fall world-wide, leading to less demand. There is real inflation and the cost of getting oil out of the ground and then to a harbor. Canada has additional costs, as do American frackers. Then the oil itself is not of the same quality... Personally, I'm afraid of a perfect storm coming. Rising crude prices, higher interest rates and falling stocks. More unemployment and some chaos spreading throughout the Euro Zone due to nasty and little known issues. The Euro itself is the rotten heart of Europe (a book by the brilliant economist Bernard Connolly. May he write a sequel). Not sure when and how - but there is a common interest oil producing countries share. And one day the Saudis will regret having incurred steep losses and join Russia. This is how a small mind imagines things. What's your take? Trading: limit orders to go long at low prices, hoping to get fills one day for Brent around $ 47. Vehicle: CFDS. BTW, the WTI is traded about 10 x more and more volatile, too.
Venezuela might propose production costs but will countries like Iran [which plan to increase production once the sanctions are lifted] play by the rules? I doubt it. So Venezuela's dream, raising prices of crude oil to $70 a barrel won't be realized. Not this year and I'm almost certain that it will take a really long time for crude to bounce back to $100 a barrel.
