This is where I agree with Steve Dawson, honestly. It feels appropriate to try to keep the U.S. oil for themselves and the fact U.S. exports are forbidden helps to bound the U.S. produced oil to United States, meaning they're not dependent of the Middle East for that "fixed" amount of oil and that's a security just in case, and it helps political independence. Well, "heard", no, I'm not sure of that and many at the governments want to lift the ban of the oil export in U.S. so I think it is obvious they shouldn't tell much that theory, since they just want to make more easy money I guess.
I think the refineries are all working well too. Sometimes when one of them has problems it raises oil prices in a certain sector of the country. I have no complaints about the price of oil though. Since the price of gas is so low, consider me a happy camper. It works for me@! I say keep the low prices around as long as possible.
Well, when it comes to the energy prices, there's winners and people who looses. For example, some energy companies are happy to buy it cheaper, this means they can do more margins while they lower the price, but for those who extract and sell the oil, the market is hurting them a lot currently and make them less profitable than it can be when it's $100/barrel. It's expected. So customers, transportation companies, everyone buying something that uses the transportation are happy of the situation, and it comes all along the economy to the consumer prices since delivery of goods needs transportation, itself needing oil. That's why it is so much important. But the oil companies are unhappy, yes.
The margin for oil producing companies has come down dramatically. Of course they are cutting costs now, lowering wages/other benefits, slowing down their investments into new production sites as well as investment into exploration. Thing is, the production that is already in place continues to be profitable but most of the new projects wont' be... that is why a lot of the new production has been pushed back or simply cancelled altogether. Long story short: the existing sites will continue to produce and create profit for the companies but there will not be many new projects. That of course means that at some point in the future supply and demand will balance.
I imagine it easily, since in one year or two you can have suddenly the price of oil divided by a factor of 2. Imagine that with any other resource, it would already be the disaster and the economy would have stopped to work. That's the impressive thing with oil. However, they don't try to search for new sites because they wait for less though times, in my opinion. Finding new oil reserves would only put prices even more down than it is and it's not their interest here. That's why I can't wait to see what will happen when renewable will grow enough to put oil on the side. Currently, they are certain the prices will go up one day. That wouldn't be always the case. There's also the problem of the U.S. gov: I think they're pretty happy of these lowered oil prices. How can they act to keep them low, eh?
According to some articles I've just read, oil prices are expected to keep dropping and by March next year oil prices could go as low as $30 a barrel. While it isn't impossible, it's highly unlikely that oil prices would dip that low. The countries who economies depend on oil have already started feeling the effects of cheap oil and will be forced to cut production. This would drive up oil prices a little.
In December 2015, US will take back sanctions against Iran. I think, that's the turning point, Oil can crash after that.
And there's there rivalry with Saudi Arabia but since Iran doesn't sell as much oil as Saudi Arabia their entry won't make that huge a difference. Nonetheless because there'll be more oil on the market prices will stay down.
yes agree, Now I think, Iran, Saudi Arabia matter, don't matters as much. Saudi's Fiscal deficit and recent growing tensions in Middle-East,after killing of Nimr-Al-Nimr, Indicating, In future Crude will fall more. many countries started relying on other countries for crude and many countries are working on other side-options as a fuel for vehicles.
