Because of increased domestic production. A play of the Saudis to slow down our exploration efforts. They know damn well our production costs are around 80.00 per barrel. So they see a chance to hasten the price decline below 70.00. That's the price where rigs will start being idled if a company can.lay me down they will. Some won't as all leases have to be drilled before a certain time has passed. Most are 5 year leases so production has to be achieved so they don't lose the leases. Once a lease has production.infill drilling will only proceed if it's profitable. Low oil prices are a two edged sword for long term energy independence...
Valuable insight from the sensei !
I hear conflicting info about what constitutes the domestic "tipping point", depending on where I go for information.
There are some that believe (I assume based upon some reasonable metrics...) that somewhere between $60 and $70 is where
domestic exploration & production gets hit. I'm no expert on this so I will defer to guys like you. I think $2.50/gallon is a sweet spot
national average (Reg Unleaded) for the economy. If that can be supported without damaging all the domestic production,
I think we're golden. If you reverse engineer pricing back to say the nineties, that puts a gallon at round about a buck fiddy (in 1992 dollars).
People near or at the minimum wage earnings level need fuel to be at more modest levels like this IMHO.
Having you for "direct" and real feedback to what's really going on in the production trenches is truly a blessing.
This will be no doubt educational as we move into the new year...
Oh, btw, get out there and vote people !
