Quote:
Originally Posted by ME_Andy
I have to eat my hat regarding my earlier estimation that average US gas prices would never again exceed $3/gal. It looks like the low oil prices have driven so many US drilling rigs away that gas prices will surely take a hard bounce.
Now here's my most recent theory: I expect OPEC to drive oil prices down, then let them bounce back periodically, like a sine wave. By doing so, they will keep their average price/gallon high enough to cover their bills. But the smaller oil producers who don't have strong cash reserves are going to be wrung out of the market on the downswings.
I think this game might work for a few years, maybe even a decade. But eventually, I still think electric cars and higher fuel efficiency standards will slowly kill off oil.
Your thoughts?
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Opec cut prices and over produced in the 80s to kill competition I. E. The USSR. Once done they imposed limits based on reserves which 'adjusted' which reduced output and put up prices. This led some to think the peak was here.
Then came the crash and unconventional oil and the world has loads of the stuff.
Now Opec is driving down the price to try and kill competition again. E.g. Off shore is already shutting down.
We will always need oil, maybe less for energy which is good but for other essential stuff.
My bet on price is a medium term rising trend until ~2030 then perhaps stability as alternatives come online.
Unless the Malthusians take over, then we're fe***d.