Quote:
Originally Posted by jamesqf
Doesn't even address the main reason: ISIS. They control a good bit of oil, which they can sell for whatever they can get. Since they stole it, and can keep on producing it with gunpoint labor, they don't have to worry about making a profit on investment: like any other thief, they sell for whatever they can get.
So you have two other kinds of producers: those (like the OPEC states) with proven reserves & established infrastructure. Since they need revenue, they can, to a certain extent, follow the ISIS price downwards for a while. But it won't last, because of those other producers with new reserves (like the US fracking stuff) that cost upwards of $80/bbl to extract. They can't sell that oil for $60/bbl or less for long without going bankrupt. When they do, supply contracts, producers with deep pockets will buy up the assets of the bankrupt producers (at bargain prices), and the price of oil will go right back up again.
|
Do you actually believe the stuff you type? ISIS can produce maybe 200k barrels a day on the global market of 90mil per day thats nothing. Yeah a "swing" producer like "isis" has crashed the markets.
What did Iran do when they were shutout a few years ago? discounted it to asian markets. We saw nothing like this collapse and Iran produces 10x the oil ISIS could every dream of making.