Why are they so low?
Why are they so low?
Why are they so low?
Why are they so low?
Which version of the answer do you want? The single sentence version, the single paragraph version, the single page version, the single chapter version, or the comprehensive book length version?
Question I have is why there is a $.25/gallon difference between SOMD and places like Waldorf, Annapolis, etc.
Was up Annapolis way about a week ago and it was around $2.20/gallon.
Thumbnail sketch in layman's terms.
I guess the Saudi's aren't smart enough to figure that out.
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Thumbnail sketch in layman's terms.
When the price goes back up the competition will come back.
I guess the Saudi's aren't smart enough to figure that out.
All this does is slow down the process.
They know what they're doing.
Yes, as prices go back up some of whatever production would have been lost will return (and as I said in my reply to vrai, I think U.S. production will continue to grow even with lower oil prices, it just won't grow at the rate it would have with higher prices). But a message will have been sent and a lesson will have been learned, the vulnerability of investing, going forward, in marginal projects - those where the risk weighted expected return is comparatively small - will be more palpable. Some projects, some wells, won't get green lighted as a result of what's happening now, even when higher prices return - projects and wells that otherwise would have been.
Additionally, OPEC may not let prices get quite as high this time around. They may decide that $90 is the right price rather than $100 or $110, that will also have a small effect on how many wells get drilled. Further, even if prices go back to where they were, projects and wells will already have been lost - a year or two or three will have been lost. You don't just wake up one day and say, oil's $100 again, start the extra pumping (well, not unless you're OPEC ). Those kinds of things, and the capital investments that facilitate them, take some time.
We are already seeing major announced cutbacks in capital expenditures for new projects and wells next year. We're seeing announced cutbacks in drilling rigs that will be in the field. We're seeing large declines in new well permits. We were seeing some of this stuff back when oil was still in the $70s. Again, compared to total global oil production we're talking about a very small portion of it being lost. But that small portion matters when it comes to pricing dynamics. Oil prices are determined at the margins - at the margins of supply and at the margins of demand. And oil prices are highly inelastic.
It appears to have harmed Russia much more than it has harmed us.
We must remember that the potential still exists, and hope the Saudi's remember it too.