Quote:
Originally Posted by jcp123
It means OPEC is legitimately scared.
It means Russia will have trouble flexing it's muscles.
It means the US is gaining some of its muscle back.
It means I pay less for the fuel I use less of anyway.
I see no downsides, unless OPEC is willing to help drive prices down a bit further. I think frack-based extraction here has gotten cheaper and is close to break-even point now. OPEC has to be committed to a long-term game of low prices if it wants to drive frackers out, or risk them popping back up at a moment's notice. And, since many of the wells are already sunk, many will have an ongoing output life no matter what.
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But, fracking wells
don't continue to produce... they have to continue fracking in order to get more oil. This is part of why the cost to recover fracking oil is higher, and at the low prices, it won't make sense to continue producing at a loss. Unfortunately, with all the capital sunk into developing the fracking infrastructure, production needs to continue or the frackers risk big losses or bankruptcy.
That's what OPEC is banking on...
P.S. I can't help substituting a similar sounding f word for fracking, which makes this whole conversation rather amusing.