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servant74 · 01-15-2015, 04:13 PM

After working in the 'oil patch' for most of my working life, the price of oil is based on supply and demand. Right now, we have a 'glut', it will dry up and the price will rise.

Oil is low now due to a 'glut' because of extra production in North America. Saudi decided not to cut production to keep the price up.

Even though I sympathise with oil companies, I do believe there is no 'great oil conspiracy'. The market is really supply and demand driven, mixed with a little speculation that causes 'irregularities' that we all pay for in the long run.

Yes, fracking, finding new oil deposits, doing secondary and tertiary recovery on 'old fields' (including fracking) helps.

Fracking is 'cheap' to do for the oil recovered, and yes, that too will dry up. All oil fields dry up eventually. Fracking, back burns, water insertion, gas injection, all help getting more out of a field.

The cheapest oil is oil from primary wells, close to the surface, in 'loose rock' (porous like big holes in sponges like in Saudi is cheapest, hard rock requires minimal fracking of one kind or another - there has been fracturing of rock going on for years, recent bad decisions were made to 'over produce' in some areas).

For most of us, plan on $5/gal gas, enjoy $2/gal gas and pocket the difference on your 'mad money' for when it. Just don't blow it on an SUV, but if you were thinking about a prius, save the nickles toward that.

The price of energy will go back up eventually. We need to be ready for that when it happens.

When people ask, I have said for years that there is no $10/barrel oil, there is lots of $400/barrel oil.

Just decide what oil (or any commodity) is worth to both a willing buyer and a willing seller, that is price they will trade on. That is how the price is set in the long term.

01-15-2015, 04:13 PM	#49 (permalink)
servant74 Retired Geek Join Date: Apr 2013 Location: Near Nashville, TN Posts: 4 Thanks: 0 Thanked 2 Times in 1 Post	Lots of high $ oil, no free oil After working in the 'oil patch' for most of my working life, the price of oil is based on supply and demand. Right now, we have a 'glut', it will dry up and the price will rise. Oil is low now due to a 'glut' because of extra production in North America. Saudi decided not to cut production to keep the price up. Even though I sympathise with oil companies, I do believe there is no 'great oil conspiracy'. The market is really supply and demand driven, mixed with a little speculation that causes 'irregularities' that we all pay for in the long run. Yes, fracking, finding new oil deposits, doing secondary and tertiary recovery on 'old fields' (including fracking) helps. Fracking is 'cheap' to do for the oil recovered, and yes, that too will dry up. All oil fields dry up eventually. Fracking, back burns, water insertion, gas injection, all help getting more out of a field. The cheapest oil is oil from primary wells, close to the surface, in 'loose rock' (porous like big holes in sponges like in Saudi is cheapest, hard rock requires minimal fracking of one kind or another - there has been fracturing of rock going on for years, recent bad decisions were made to 'over produce' in some areas). For most of us, plan on $5/gal gas, enjoy $2/gal gas and pocket the difference on your 'mad money' for when it. Just don't blow it on an SUV, but if you were thinking about a prius, save the nickles toward that. The price of energy will go back up eventually. We need to be ready for that when it happens. When people ask, I have said for years that there is no $10/barrel oil, there is lots of $400/barrel oil. Just decide what oil (or any commodity) is worth to both a willing buyer and a willing seller, that is price they will trade on. That is how the price is set in the long term.