A barrel of oil is in the $40 range these days, compared to in the $100’s a few months ago. Doesn’t a 100% cut in price run havoc on oil producing countries? Imagine if someone halved your salary without notice. How do countries cope with such a loss? That must amount to Billions.
Re: Don't falling gas prices run havoc on oil producing countries?
^^ Saudia need only 45-53$ one barrel to make profit. But on the other hand Russia/Iran needs the prices at 65-75$. So they are crying out loud.
Saudia was always against 100$ per ... coz they know in the long run it will demolish demand, and they were right !
Re: Don't falling gas prices run havoc on oil producing countries?
Well why make less profit when you can make more? If the minimum required to make a profit is $45 - $53, I imagine the extra profit when oil prices are $100 / barrel is good.
Re: Don't falling gas prices run havoc on oil producing countries?
Simple question that has nagged me no end... Why has the oil prices fallen like this. Demand has not changed so dramatically :( But Why ???
Simple question that has nagged me no end... Why has the oil prices fallen like this. Demand has not changed so dramatically :( But Why ???
Demand never justified an even close to $140 a barrel. The run up on oil was largely due to speculation, with U.S. trading banks and hedge funds doing their share. Oil shot up from $50 to $140 in less than 18 months, at one point in period of 2 days the price shot up $16. The U.S. senate reviewing laws to curb in speculators and the eroding economy pushed many of them out helping drive the price down.
one writer said very well that "oil prices are like a large large large train that is loaded to the end.. loaded so much that it has difficulty to even take a start off but when it does it goes on carrying momentum to the point where it is difficult to stop it"... That is what happened in current case ... now that it has stopped it stopped completely to a historical low... it will take some time for the prices to go up again because of this huge trains load but the prices will go up for sure because these prices are not at their demand supply equilibrium or their efficient equilibrium due to which oil producing countries are cutting supplies because this price and production is not sustainable as Mideast has to finance itself and its development of oil exploration and production facilities which cannot be achieved at this price.... so what we can expect in a year or two is the jump of prices upto atlleast 70 dollars per barrel