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Austin wrote:Any one who thinks US can influence Energy market by magically bumping up productions needs to know two facts.
1 ) US is a net importer of energy so any export is bad for its domestic market
2 ) Most of US oil production come from Shale and Shale even with high oil price and cheap credit is a loss making business Why Is The Shale Industry Still Not Profitable?
Only OPEC and Russia can extract and product oil at a price where it is profitable and stable production is ensured , hence the OPEC/OIl deal infulences oil market price and not other entity mostly certainly not the US , reason US has asked OPEC to increase production to bring down cost.
US oil exports are on the rise. This coupled with doing coup in SA to keep SCO proxies out of gov ensures that OPEC will trade in dollar. Of course with prices now rising, Russia is breathing easier but India and China will have to shore up their reserves. US will try to intervene to keep the price from rising too quickly.
I give petrodollar 10-20 years max. With Canada, Gulf of Mexico, etc. at peak production, and Russia, China, and India to some extant able to provide security guarantees to gulf regimes, why the fck should the rest of the world keep cheapening their currencies and exporting to the US?
It’s hard to imagine india and China or Russia giving security guarantees to gelf , doubt those nomads tribals jihadist will survive that long , they will self implode sooner
Austin wrote:Any one who thinks US can influence Energy market by magically bumping up productions needs to know two facts.
1 ) US is a net importer of energy so any export is bad for its domestic market
2 ) Most of US oil production come from Shale and Shale even with high oil price and cheap credit is a loss making business Why Is The Shale Industry Still Not Profitable?
Only OPEC and Russia can extract and product oil at a price where it is profitable and stable production is ensured , hence the OPEC/OIl deal infulences oil market price and not other entity mostly certainly not the US , reason US has asked OPEC to increase production to bring down cost.
1. Oil extraction is not a fixed technology. It is advancing. The US does import, but it’s shale oil reserves are 265 billion barrels. More than SA or Russia reserves. It is well in the process of extracting shale oil and gas using newer technologies and is ramping up. The US is at the forefront of oil and gas extraction reasearch and infrastructure. Russia has creaking infrastructure where even SA has much better oil infrastructure. I doubt Russia has more than a couple of universities in petroleum engineering.
2. The small players in shale have been squeezed out and they can’t compete with the bigger players with newer technologies. The bigger companies like Exxon are able to extract in the Permian basin well below $30/barrel - and those costs are declining every year.
3. The US asks OPEC to ramp up because high oil prices cause inflation in the US and is bad for politics. Oil prices at $50/barrel will not hurt the big US shale oil producers.
There is a difference between oil reserves and what is ex tractable , US Shales has been loss making since its inception only survived because of low interest rates credit available , that is all set to change with Fed rising interest rates.
Shale is a serious environment issue for US that has caused ground water contamination ,earthquakes etc The talk of Oil extraction is not a fixed technology has been going on for long time but Shale still remains a business in red period.
I will wait for the magical time where US would extract all those magicial shale oil from ground and export it and make it competitive enough to compete with OPEC and Russia , It can barely export LNG to Europe which cost 3x times than piped gas.
Till then US remains a net importer of Energy , Let it first meet its own need then think about exporting ! Good Luck to them
Austin wrote:There is a difference between oil reserves and what is ex tractable , US Shales has been loss making since its inception only survived because of low interest rates credit available , that is all set to change with Fed rising interest rates.
Shale is a serious environment issue for US that has caused ground water contamination ,earthquakes etc The talk of Oil extraction is not a fixed technology has been going on for long time but Shale still remains a business in red period.
I will wait for the magical time where US would extract all those magicial shale oil from ground and export it and make it competitive enough to compete with OPEC and Russia , It can barely export LNG to Europe which cost 3x times than piped gas.
Till then US remains a net importer of Energy , Let it first meet its own need then think about exporting ! Good Luck to them
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