Originally posted by sexualbanana
Maybe not the most relevant to rig counts, but I'm reading that the price of oil is dropping as US inventories get bigger.
In light of OPEC deciding to cut production (presumably to prop oil prices up?), is this basically just the US being assholes?
For the record, I don't know enough a lot about the industry, so explain this to me as though I am an idiot (because I am).
OPEC is a group, they control production levels, can fix prices, etc... Most of OPEC oil is cheap/easy to produce/extract.
Canada/US is free market, free enterprise. They can't even think of doing that as it violates anti-monopoly laws. US/Canada oil is difficult and expensive to produce/extract.
When this all started, OPEC over-produced to gain market share, and kill some US (shale) oil since it had higher costs. They thought low prices for some time would push them out of business.
Free market, and free enterprise turned in to the will to live. New efficiencies were created and fat was trimmed.
The ultimate result that OPEC hoped for never came to fruition and now we are stuck in a market of extremely low prices with inventories building in North America. And it's super crappy for Canada as our costs are higher (Oil sands is pricey as hell).
The above is the worldwide problem with oil right now. Locally in Canada we have two problems hitting our industry:
1) The Above
2) Provincial/Federal governments (taxation, regulation)
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Last edited by Zhariak on 03-23-2017 at 04:41 AM
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