Oil Prices Now

peakbagger

Minister of Fire
Jul 11, 2008
5,357
Northern NH
My guess is we are looking at similar cyclical curve for non conventional oil as there was for natural gas. Interposed on this is the big unknown of the worldwide response to climate change and how it impacts fossil fuels. The Biden plans are a Green New Deal version that means a reduction in fossil fuels. If Europe and the US are on roughly the same bandwagon they can impose punitive carbon surcharges on other countries like China to force carbon reduction.

Natural gas used to cycle "like clockwork" until directional drilling and fracking made a gas glut. The price would creep up, drillers would start drilling new wells based on high prices, that would take 12 to 18 months for the new production to come on line and then the prices would start going down due to new supply. The rigs would pull out because the prices were low and then supply would drop which would raise prices and the cycle would start all over again. Fracking and uncoventional drilling will do the same, rigs will pull out and get auctioned investors will lose money but if the prices rise some other firms will head back into the field and start drilling, eventually it will make a dent in supplies and the prices will drop and the cycle will begin again. The big game changer is the US prior to this new unconventional recovery wasn't in the game so we were dependent on supporting some pretty nasty regimes.
 
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