We are starting to get to the situation where the extraction cost is higher than the affordable price so stuff will get left in the ground.
I wonder if there is an OPEC strategy of over selling to deliberately knock out tight oil production by undercutting its extraction costs. They wouldn't have to do it for long, a year or so, to close some wells and put off new investment and then allow the oil price to rise again so that they can profit for a few years before the whole cycle starts again.
Eventually their oil will run out and the world's economies will be so much lower that the investment will not be there to exploit the tight oil and gas and the cost will be too high anyway. One can only hope!
Frackers: what will they do? They have to respond.
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
If deflation is coming, it will be following in short order with more printing and the formal introduction of ZIRP. As if we haven’t already had it informally for the last half decade,
stevecook172001 wrote:If deflation is coming, it will be following in short order with more printing and the formal introduction of ZIRP. As if we haven’t already had it informally for the last half decade,
I used to look at rising oil prices with glee as they heralded demand destruction. I now look at falling oil prices with glee as they herald production destruction!! We may be Frack Free yet!!
kenneal - lagger wrote:I used to look at rising oil prices with glee as they heralded demand destruction. I now look at falling oil prices with glee as they herald production destruction!! We may be Frack Free yet!!
As expounded here, low oil prices don't now kill off renewables either, like they useta.
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
I paid $2.899 a gallon US$ for gas today in Chicopee Mass.