Follow the pulse between the industry of fracking, american and Saudi Arabia

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Photo: CREDO.fracking (Flickr) CC BY

The barrel of oil is already trading at levels not seen since 2004. This decrease is caused by the excess production of the OPEC countries, and by a reduction in the consumption of the emerging powers. As a “spare” oil, the price continues to the downside. At its last meeting, the producing countries were not able to agree a cut to production.

Saudi Arabia, the largest member of the OPEC, do not want the industry of the fracking in the united States is to remain competitive. These farms cease to be profitable when a barrel drops to $ 50, because it costs more to get oil than you would get with your sale.

big oil companies have not gotten much in this business as small and medium-sized producers, which have taken more risks, as is the case of Pro-Stim Services. In the belief that prices were going to stay at 80 or more dollars per barrel, there are entrepreneurs who have gotten involved in loans that now can’t pay.

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Photo: Department of Energy and Climate Change (Flickr) CC BY ND

┬┐Are the saudis winning the pulse? is Still too soon to answer that question. A country like Saudi Arabia, which has better financial muscle, you can play this game without putting their economy upside down. Other producer countries are hard hit by the low prices, since it does not manage to reconcile their public accounts for a lot of pumping.

The industry fracking will have to slow down or freeze your activity, because you can’t lose money indefinitely. resources are going to continue to be there, when it comes to climb the barrel. In the best of cases, you can make a controlled stop, in other cases we will speak of suspensions of payments, layoffs, and loans impossible to get back.

it Is much cheaper to get oil from the countries, OPEC, conventional wells, using methods such as the hydraulic break. When the oil is more expensive, go to account withdrawals places more complicated, as the oil sands found in Canada. Inversely, a barrel cheaper only encourages the use of wells already in a state of exploitation.

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Photo: edward musiak (Flickr) CC BY SA

Saudi Arabia ended the year with a deficit of 100,000 million dollars. While the country is able to operate with such losses, the saudi monarchy will be able to have the situation under control. In addition, the tension with Iran as a result of the execution of a shiite cleric presses the prices down. It is a perfect storm.

The production of the US leads to falling several months

Penny to penny, what we are noticing in the suppliers, but you have to remember that crude oil is only a component of the price, and therefore it does not produce decreases proportional to at-the-pump. According to the latest price bulletin published by the EU, 80% of the gas stations that offer diesel fuel below euro/liter, and the gasoline is already starting to be seen from below that figure in independent operators.

Meanwhile, the OPEC countries have many economic problems, and if they reduce production to raise prices, their situation is complicated even more. social problems can erupt in bulk. Is not helping the situation is the instability of the stock market chinese, whose bag had to be closed again to prevent a further collapse of the stock.