It appears that OPEC has finally won its long war against shale oil as beaten up investors seek their fortunes elsewhere.
Why are the Saudis content to allow oil prices to remain this low and possibly drift lower? I believe it’s because their war on shale never ended; they mean to destroy the long-term financial viability of oil from shale deposits–and that job won’t be finished until investors say, “Never again!”
The Wall Street Journal on Tuesday, February 10 proclaimed “Oil-Price Rebound Predicted” according to the IEA. – Not true.
The United States could chose to fight back and possibly win this war with OPEC by employing one simple, big move. But, I can confidently predict that the country will not do it. Why? Because it involves a tax, a tariff actually.
To paraphrase Mark Twain: Rumors of OPEC’s demise have been greatly exaggerated.
The world is in a dangerous place now. A large share of oil sellers need the revenue from oil sales.
Faced with the prospect of losing market share to tight oil producers in the US, OPEC has simply taken the most prudent business decision. Keep the taps open.
The purported benefits of energy independence are simple: an improved economy due to the reduced outflow of dollars, improved national security, and more flexibility on foreign policy, particularly with regards to the Middle East and now Russia. Those objectives are substantial, if they can be achieved.
•Fracking Tied to Pennsylvania Water Woes by EPA Official •Industry Pressure Shuts Down EPA Fracking Investigations •EDF to exit US nuclear power over impact of shale gas •US shale threatens Saudi funding crisis and demise of OPEC •Fracking can take place in ‘desolate’ north-east England, Tory peer says •Bakken shale natural gas flaring tops $100 million each month
•Fracking could ruin German beer industry, brewers tell Angela Merkel •Amerikas Schiefergas-Boom droht jähes Ende •Fracking Tests Ties Between California ‘Oil and Ag’ Interests •Most Americans don’t give a frack about fracking •UK shale gas reserves may be ‘bigger than first thought’ •OPEC, at its Vienna meeting, grapples with shale oil