Pricing, Part I
Pricing, Part II
Pricing, Part III
Permit Status
Saudi Arabia Market Share
Mid-East Geo-Politics
OPEC Realities
Pricing, Part I
Pricing, Part II
Pricing, Part III
Permit Status
Saudi Arabia Market Share
Mid-East Geo-Politics
OPEC Realities
Pricing, Part I
Musings on pricing.
There are two questions to ponder:
- what is the right price for oil?
- when will we see the right price of oil?
For now I will just cut to the chase, and develop the argument at a later date, if the spirit moves me.
Assumptions:
- oil is not a typical commodity: one producer has historically been able to affect global supply and prices to a greater extent than other producers; a relative monopoly
- the US is or soon will be the world's #1 producer of oil; and the US, by law, cannot export oil (there are exceptions)
One of many unknowns:
- will "conditioning Bakken oil" meet the exception; allowing Bakken oil to be exported?
- more and more, "like" oils, regardless of origin, will be driven by market (supply and demand) forces
- the "right" price for Brent, OPEC, and WTI oil is $100/bbl (baseline year, 2014)
- we will see the "right" price not earlier than December, 2015
- IEA sees oil price rising near $100 in coming years (doesn't seem like a hard prediction to make)
- Projects will be canceled in 2015
- Operators circling the wagons
December 30, 2014: break-even points for five largest producers in the Bakken.
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