[Harry Chickpea]

Now around $80/bbl and falling. This will have significant effects on the world economy. Russia will be stressed, money to the oil countries of the middle east dry up to barely cover bribes, and there may be a temporary freeing of money to boost the Christmas season spending. All of the above work to the advantage of the U.S.

Your comments?

 

[sss3]

Every time something happens that takes our minds off the state of things, I wonder what's really going on. Is it because it's an election year; or what?

 

[Harry Chickpea]

Good comment. I'm wondering myself if it is a prop for the economy in some ways.

 

[FeralFemale]

If the price per barrel goes too low, fracking will become too expensive to be worthwhile. There is a debate on what exactly that price is, but the numbers I've been hearing range from $50 to $80 a barrel. There are a lot of jobs in and connected to that industry.

 

[mmoetc]

If it is some conspiracy to prop up the economy what's the down side. High energy prices are like a hidden tax on almost everyone. Besides causing higher prices for every consumer good that needs transportation everyone that doesn't walk to work will have more money in their pocket at the end of each week. Home heating oil prices have dropped which will also have a significant impact on household budgets, especially in the northeast. For a large segment of the population that's money that won't go into a savings account but will go directly back into the economy at stores and restaurants. I can say from having run a small town retail store from 2002-11 that gas prices have a huge affect on people's spending patterns. It's an effect that will ripple through the economy more quickly and with more impact that any govt program.

On a world level it will mean more economic stress on Russia which will cause the true power brokers in charge to put pressure on Putin to dial back, at least temporarily. It's likely Iran will also feel the pinch and be more amenable to modifying their behavior. It may even cost groups like ISIS some of the money they're making from oil sales. All positives.

It may impact further expansion in frakking here in the US and cause the shutdown of some marginal operations and wells. But this always happens during the booms and busts of oil prices. I've read that most of the oil patch can still make money in the $80-$85/bbl range that oil is currently at so I don't expect much immediate impact. It may limit further expansion for a while but the costs of frakking and directional drilling have already been dropping and were expected to continue to do so anyway.

Anecdotally, the drop in gas prices is saving me $7/ week from early this year and my wife about $25/wk. It'll have a big impact on our household budget.

 

[mmoetc]

http://mobile.bloomberg.com/news/20...ale-boom-s-quirks-at-the-pump.html?cmpid=yhoo

Maybe it is just another left wing, liberal plot to stick not to the rich.

 

[plowjockey]

Good comment. I'm wondering myself if it is a prop for the economy in some ways.

Oil prices are set on the world market, not the U.S. market.

It's not always just about us.

 

[arabian knight]

Good comment. I'm wondering myself if it is a prop for the economy in some ways.

It just may one reason it is coming down is the Shale oil in the Dakotas is putting more oil in the market place. So I hope prices don't go down too much further to stop exploration and opening more wells up. The advancement of fracing and horizontal drilling has also helped to put more oil on the market place. We THE USA are just about to become THE oil producing country ALL thanks to fracing and other cool technologies that have come on board in the last few years.
So oil prices better not drop any more as wells are being shut down. Not Good.

Slumping oil prices are putting pressure on U.S. drillers.

The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes. There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week. There are now 1,590 active oil rigs, the lowest level in six weeks.

http://oilprice.com/Energy/Oil-Prices/Low-Oil-Prices-Hurting-U.S.-Shale-Operations.html

 

[Awnry Abe]

Don't be fooled into thinking the price of oil is for, by, or of US politics. Our system has been cast for decades. It is more about creating the right kind of instability in the Middle East.

On a related note, what's the deal with ISIS selling oil? Who would buy it? I'm not. The ol' BS meter is pegged.

 

[Ozarks Tom]

Don't be fooled into thinking the price of oil is for, by, or of US politics. Our system has been cast for decades. It is more about creating the right kind of instability in the Middle East.

On a related note, what's the deal with ISIS selling oil? Who would buy it? I'm not. The ol' BS meter is pegged.

From what I've read they're trucking it across the border to Turkey, at cut rate prices. And yes, we're all buying it once it hits the international market.

 

[Glade Runner]

This may be to hurt the Russians or reduce US shale development. It seems like mostly Saudi jaw boning driving the price down with no actual action on their part. They need about $90 a barrel to cover their cost of government so I don't expect this to last long.

 

[Nevada]

If the price per barrel goes too low, fracking will become too expensive to be worthwhile.

That's not going to happen. It's the production from fracking that's driving the price down. Fracking production is in the driver's seat right now.

I expect oil prices to stay low for the foreseeable future (the next few years).

 

[AmericanStand]

The price of gas should hit rock bottom just about Christmas and stay low after that.
That's my ETA on finishing my wood powered truck.

 

[MO_cows]

The price of gas should hit rock bottom just about Christmas and stay low after that.
That's my ETA on finishing my wood powered truck.

Thank you! And, I believe you. My whole life, diesel was always cheaper than gas. It did it's flip flop within weeks of us buying a diesel pickup...

 

[Ozarks Tom]

Yep, I remember distinctly the day gas went over $2/gal. It's the day I bought my Suburban.

 

[cedarvalley]

Here's a good article on why oil prices fell, and future pricing forecasts. It inferred that OPEC was protecting its market share, and testing at what price, more costly US production was profitable at.
http://www.bloomberg.com/news/2014-10-29/why-oil-prices-went-down-so-far-so-fast.html

 

[fordy]

If the price per barrel goes too low, fracking will become too expensive to be worthwhile. There is a debate on what exactly that price is, but the numbers I've been hearing range from $50 to $80 a barrel. There are a lot of jobs in and connected to that industry.

................For the present the drilling will continue , daily rental for drilling rigs will or should decrease because some producers will cut their rigs loose when the well is completed . The drilling in south tx in the Haynesville shale may see a small decrease in the rig count .
................Most savy lessee(s) include a clause in their lease that requires the producer to start drilling before the end of the lease term or they lose their lease . So , the producer drills atleast one well so the lease is 'held' by production . As far as the effects on fracking , producers keep drilling wells , they drill , set pipe , cement , perforate , and log the well , then they Wait to frac until the price comes back up .
................Those companies with sufficient capital resources and lots of undrilled leases will actually INcrease their drilling activity because their costs of drilling decrease when the market price per barrel drops as it has recently .

 

[kasilofhome]

That's not going to happen. It's the production from fracking that's driving the price down. Fracking production is in the driver's seat right now.

I expect oil prices to stay low for the foreseeable future (the next few years).

BUMMERS your predictions have been so off..spring came and went and still no joy in medical insurance or health care. And Q4 no more. So, gas prices will most likely rebound with avenging.

 

[Darren]

The other aspect is the continued shale plays for natural gas. This has changed somewhat with drillers concentrating on areas that produce along with natural gas others like propane. A stripper plant nearby that was recently completed is shipping a large number of truck loads of propane daily.

With the oncoming shutdown of coal fired plants the replacements, which can be up and running in two years, will be fueled by natural gas.

In the near future exports of CNG will climb as export facilities are completed. That means driiling of new natural gas wells will continue. A byproduct is oil. That means more, albeit small, sources will be produced with the side effect of dumping more oil on the market. The oil has to removed meaning it will go to market no matter what the price in order to continue producing natural gas.

My guess is that natural gas prices will increase in the future but oil prices will slowly drop or stagnate at lower levels. This country is on a path to be a major exporter of energy in one form or another.

The bright spot is lower cash flow into the Middle East and the potential to reduce state or private funding of terrorism. We can expect that regime change may also occur. While I doubt that will happen in Russia, Putin understands he is on an "energy" leash. His dreams of empire look short-lived.

 

[plowjockey]

The price of gas should hit rock bottom just about Christmas and stay low after that.
That's my ETA on finishing my wood powered truck.

LOL

DW just purchased her dream sports car that averages 14MPG. :facepalm:

I figured gas would start heading to $5 gal!