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Demand lull is temporary with global population growing, while new production is not coming on line significantly and low price is hindering investment.
Saudis won't let prices rise until Alberta and Texas reduce production.
The Saudis get 80% of their production from one oil field. They have done, primary, secondary and tertiary production on the field. They have under taken a 4th stimulation recently. Additionally they are trying out hydraulic fracturing to access natural gas deposits since they need a new source of fuel to produce electricity more cheaply than oil. If they didn't do this, they would become a net-importer of oil over the next few decades. Once their solar farms are built and natural gas is being produced, they will be in a much better position to keep supplying the world with oil at current levels despite their declining reserves.
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OPEC says cheap oil taking longer to subdue rival suppliers. Tomorrow morning, the Texas Railroad Commission releases their June production numbers. Not usually a huge market mover, but now I suspect it will be until production begins to drop off substantially, because OPEC is not going to rest until Canada and US reduce production by a couple million bbls per day.
But Sauds set the price, at least for as long as they can keep up with demand.
Saudis won't let prices rise until Alberta and Texas reduce production.
The Saudis get 80% of their production from one oil field. They have done, primary, secondary and tertiary production on the field. They have under taken a 4th stimulation recently. Additionally they are trying out hydraulic fracturing to access natural gas deposits since they need a new source of fuel to produce electricity more cheaply than oil. If they didn't do this, they would become a net-importer of oil over the next few decades. Once their solar farms are built and natural gas is being produced, they will be in a much better position to keep supplying the world with oil at current levels despite their declining reserves.
Are low oil prices a reason for Alberta going "socialist" (NDP) ?
Steel prices continue to look bearish...
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