Why is oil price so high?
- Thread starter Saint
- Start date
Google is your friend,use it
Because people are selling it for a lot of money.
It is "manipulated" by OPEC, the US, consumers, governments and refineries. In fact, that's how capitalism works.
sculptor
Valued Senior Member
politics
and speculation of oil traders
however
crude oil futures for December are at 88.83 dollars
the politics creates uncertainty which opens the door to speculators who trade oil without ever taking possession of the actual product ----- buy and sell what they do not have and hope to never have
Not to countries boycotting that oil and gas.
But it is driving up demand , because russia is not a supplier , of oil and gas , right now . Hence supply from else where is more expensive , because of supply , capacity and ability to make up for russia supply distance . The stress on other supplies of both is going to happen . And is in price hikes at the pumps .
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We import 2% of our oil from Russia.
Yes. I guess you have to decide if stopping Russia from invading democratic countries is worth paying a few more dollars for gas.
Because shale oil requires oil prices above about $80 a barrel to be profitable. They have only recently hit that mark, and it will take some time to ramp production back up.
Then everyone would have been producing shale oil continuously for the last 10 years since they would be making money 90% of the time (and people like to make money.) They have not - because at $30 a barrel it's generally not profitable.
There are a lot of estimates out there. RAND estimates a price range of 70-95, and thus it would have to be above this to be profitable. These numbers have been borne out in experience - below 70 a barrel shale oil production tends to shut down, because they are losing money. If production returns and keeps ramping up they think it can be eventually lowered to 35-50 a barrel.
Shell has estimated that with their new in situ technology they can get it down to 30 a barrel. But that has never been demonstrated, and they say that MAYBE they can try that in 2025 for the first time.
The DOE thinks the magic number is above 54 per barrel, and the IEA thinks it is above 60 a barrel. Again, those are estimates. What we have seen in reality is the shale oil breaks even around 70 a barrel, and becomes competitive with light crude around 80 a barrel.