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I think $40 oil is pretty much baked in the cake , and I think it will be sooner than later . Over the weekend a spokesman for OPEC said , "production cuts are off the table even if oil falls to $40" . IMHO it was like telling the traders to go ahead and short oil down to $40 with impunity .

As far as how long it will stay that low , that depends on future production cuts and what Saudi Arabia does or doesn't do . :dontknow:

TheReaper!
 

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It's well on its way....almost down $10 in just the last week. Today's low is $52.02
 

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It will not surprise me if it drops that low. It will have an impact on the economy but it's hard to tell if it will be a good impact or a bad one.

On the one hand lower gasoline prices put more money into the hands of consumers so spend on other things could go up. That is provided people don't just pocket the money or use it to pay off debts.

On the other hand it will cause a cut back in the drilling business and right now that is the engine of our economic recovery. As that kicks in we will see a drop in economic activity in many states and job layoffs. Right now the markets are seeing this as the more likely outcome which is reflected in the drop of the stock market over the last couple of weeks.

I guess time will tell. For right now we can just enjoy the lower gasoline prices.
 

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I've heard that it costs about $60/bbl. to extract/produce the Dakota Shale Oil. OPEC is actively trying to drive them out of business. Might work, too.
 

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I've heard that it costs about $60/bbl. to extract/produce the Dakota Shale Oil. OPEC is actively trying to drive them out of business. Might work, too.
I was reading on that last week and many oil business analysists believe the Dakota Shale Oil can survive on $45/bbl. The OPEC has greatly miscalculated the strength of the American shale oil production and really this is not an action or inaction against American oil, but simply there is nothing else they can do.

Here is an article I recently read on that.
 

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It's 100% artificial or synthetic action if you like. U.S. economy has nothing to do with it, one other country is the target. Oil supply is quite and quite limited on Earth.
 

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Fear not, this euphoria won't last forever. At some point it will start creeping up, for some "manufactured" reason or another. Just enjoy it while you can.
 

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On the other hand it will cause a cut back in the drilling business and right now that is the engine of our economic recovery. As that kicks in we will see a drop in economic activity in many states and job layoffs. Right now the markets are seeing this as the more likely outcome which is reflected in the drop of the stock market over the last couple of weeks.

I guess time will tell. For right now we can just enjoy the lower gasoline prices.
I have little doubt there will be both winners and losers. Here in the US, Oil producing states like Texas, North Dakota and Oklahoma will suffer and there will be layoffs. On the other hand, states that consume more oil than they produce, like California, should experience an economic boom.

Worlwide? Countries which export oil as a big part of their economy will suffer.
Countries that don't should see the benefits of lower prices.
 

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While the news presents it as wondering why all parties are allowing the price drop to occur, the country it seems to be especially hard on is Russia which, relies heavily on oil revenues. Perhaps holding to this price decline is serving a very intended purpose that is not being publicly expressed by the various governments. I'm not very deep, politically but, this came to mind in the past few days when the severity of Russia's economic troubles went to bad to much worse.
 

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Discussion Starter #10
While the news presents it as wondering why all parties are allowing the price drop to occur, the country it seems to be especially hard on is Russia which, relies heavily on oil revenues. Perhaps holding to this price decline is serving a very intended purpose that is not being publicly expressed by the various governments. I'm not very deep, politically but, this came to mind in the past few days when the severity of Russia's economic troubles went to bad to much worse.

Your not alone with your thoughts on Russia , I thought the same thing . From what I've been hearing and reading the Russian (Putinville) economy is unraveling as I write . It's hard for me to understand this horrendous fall in prices , coming from a very small excess and at best a temporary one in supply .

All that said this IMO this is a Black Swan , and a real game changer . I read a few years back that the higher oil prices were the single largest transfer of wealth in history . (from west to east) I also read that it coincided nicely with the 500 year cycle where every 500 years wealth moves from east to west or west to east . Saudi Arabia I think started this out of their fear of losing market share in the U.S. and Asia . I heard this morning that there is only one million extra barrels a day being produced at this time , which IMO doesn't jive with a nearly 50% drop in oil prices .

So bottom line I guess is , enjoy it while it last ?

TheReaper!
 

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Price is down so our kids & grandkids can say I remember when gas was under $2.00 per gallon. Now some of us remember when gas was under $.20 per gallon. ;)
 

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The rise in production is not all that big but it coincides with a drop in demand because of shrinkage in economies like China's. The combination of increased supply and reduced demand has resulted in rising inventories. As long as inventories are up prices will stay down.

It looks like oil futures prices reached at least a temporary bottom today. The drop stopped and a slight increase in prices occurred. It's to early to say if that bottom will hold though.
 

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Yeah, lot of us old geezers on the board that remember those days.
 

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$1.99 gas is everywhere in the Dallas/Fort Worth area now.
 

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The lowest I can remember is $.17 during a gas war in the 60s. I don't think I've seen a gas war after the 60s and probably never will again.
 
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