View Single Post
Old 01-12-2016, 11:00 AM   #59
Frequitude
Franchise Player
 
Frequitude's Avatar
 
Join Date: Jul 2005
Location: 555 Saddledome Rise SE
Exp:
Default

Quote:
Originally Posted by Ironhorse View Post
Interesting article that evaluates Saudi Arabia's market share, which apparently hasn't really eroded all that much at all since 1994, and explores the idea that OPEC's decision has hugely backfired on them:

http://www.forbes.com/sites/rrapier/...iscalculation/
Not the greatest article in my opinion. Technology unlocked a ****tonne of oil in the US and production was climbing rapidly.



What was to stop it from continuing up and eroding Saudi market share. The author's premise is based on an assumption that US production levels were flatlined and that the Saudis were trying to push them lower.

The Saudis aren't trying to push them lower. They are trying to stop them from climbing even higher.

The $1T "mistake" the author references was really just an inevitable loss of value caused by a technological shift in drilling. They just chose to take that loss early on the chin in an effort to bankrupt as many of the highly levered shale guys as possible. But those guys will pop up again once prices hit ~$80. It's a game of whack a mole that will keep a pretty firm ceiling on prices until demand grows significantly.

Technology is such a disrupter to markets. It's facinating to watch.
Frequitude is offline   Reply With Quote
The Following 2 Users Say Thank You to Frequitude For This Useful Post: