(28-11-2014, 11:59 AM)brattzz Wrote: [ -> ]oil price down is GOOD for economy mah!
Why everyone soo panic?!
Oil price up => less spending => recession.
Oil price down => economy slow down => recession.
Oil price no up no down => no growth => almost recession.
Basically, we are doomed no matter where the oil goes..
Looks like there will be massive M&A in the O&G sector
so I guess bankers gain regardless of whether everyone else are doomed or not.
(28-11-2014, 03:02 PM)yeokiwi Wrote: [ -> ]Oil price down => economy slow down => recession.
Unusual for a sharp guy like you but think u got the arrows the other way around, should be:
Oil price down <= economy slow down <= recession
Then follow on by applying the converse of your other one:
(28-11-2014, 03:02 PM)yeokiwi Wrote: [ -> ]Oil price up => less spending => recession.
Oil price down => more spending => growth
The effects on the global economy of low oil prices could be as marked as low China labour cost in the past decades.
(28-11-2014, 11:00 AM)specuvestor Wrote: [ -> ]^^ US$20/25 cannot be the cash/ lifting cost as Saudi is already around there. That's the problem with these kind of figures as they don't tell you what type of cost is it. When oil was trading USD10+ even Saudi was losing money... FIFTEEN years ago... just in time for Berlin Wall to come crashing down before oil price starts ascending.
That's why following the industry is helpful because when they announce plans/ capex/ dreams they will tell you what is their breakeven price while prices are high. When crap hits the fan all these figures starts changing. Nothing new under the sun
I concur.
To add-on, I do believe the cost isn't fixed. I also believe that the cost tracks oil price. As oil price moves lower, demand/supply in value chain changes, and the cost will change accordingly to adapt.
Sharing few of believes.
When oil price drops too low, one of them will drop a bomb somewhere, and bring oil prices up again.
Can't fault them, Arabs are quite good businessmen too. So long as they can make profit and at the same time kill the competition, its win-win for them so just keep pumping as usual.
Opec failed to subdue its US rivals, at least for the time being...
Opec says cheap oil taking longer to subdue rival suppliers
12 Aug 2015 06:55
[LONDON] Opec on Tuesday raised its forecast of oil supplies from non-member countries in 2015, a sign that crude's price collapse is taking longer than expected to hit US shale drillers and other competing sources.
In a monthly report, the Organization of the Petroleum Exporting Countries (Opec) forecast no extra demand for its crude oil this year despite faster global growth in consumption, because of higher-than-expected production from the United States and other countries outside the group.
...
Source: Business Times Breaking News