Dec. 1, 2014
Just what is going on with falling oil prices, and how will it affect Mexico and expats living in Mexico?
Just who is producing oil – and how much? … Who are the players?
Just which players are losing money and which ones are making money?
Will Canadian businessmen and US businessmen choose to sell oil at a loss?
Just what are Russia’s real costs? … Canada’s real costs? … USA’s real costs?
Basic Story: US oil production from the new North Dakota & Montana oil shale fields is driving down world oil prices – as the US oil boom has grown to 1.1 million barrels a day – surpassing Iran’s output.
Some news sources like the Washington Post are flogging reports of $40 a barrel oil due to “$42 per barrel” US costs – or even “$30 a barrel” Canadian costs – but these WaPo quoted “experts” really don’t fit the realities of actual US production costs – and that 1.1 million bbl per day for USA is just 1.2% of the world’s daily output of 92 million bbl/day.
Experts on the US Bakken Shale (North Dakota) production costs instead say: “$70 a barrel could cut production 28 percent to 800,000 barrels a day by February from the 1.1 million barrel current levels.” http://www.bloomberg.com/news/2014-10-21/oil-at-80-a-barrel-muffles-forecasts-for-u-s-shale-boom.html
Sharp readers may realize that countries whose governments rely on crude oil sales, are facing some real problems, especially Russia, Iran, Venezuela, and Nigeria … whose governments are currently selling oil at huge losses.
. . . (see main article What’s Going on with Oil Prices? )
… Coincidentally, $80 a barrel is the typical NYMEX crude price that American and Canadian producers need to make tidy profits, so, smart thrifty expats in Mexico could decide to buy your pesos now – while oil prices are below the $80 a bbl benchmark….
… For more details on this, please see our main article at:
What’s Going on with Oil Prices?
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan. ©Steven M. Fry
Read-on MacDuff . . .
I’m more concerned about the effect of cheap oil on alternative energy than on the value of the peso. ¿Could it be that the carbon industry sees that populist vision is beginning to recognize that global warming must be dealt with by developing alternatives, and therefore their commodity is at risk of severe competition, unless they derail the alternatives by aggressive pricing? As the Pentagon is taking global warming very seriously, it is clear that there is deep concern. Carbon lobby will not snooze.
Lots of fodder here…
Is the USA colluding with Canadians and Brits – dumping oil onto already overloaded markets – to sink Putin/Russia’s push to restore the old Tsarist empire – or as punishment for their meddling in Ukraine? – and taking Crimea?
The price at the pump for gas and diesel continues to rise in Mexico. But since Mexico is admittedly a net importer of oil, shouldn’t or couldn’t there be some relief at the pumps soon? Prices have plummeted to two thirds of what it was as recent as this past spring. Why is there the need to continue to raise prices? It is hurting the hard working populace who can’t afford fuel already.
I am not sure how to do what I planned. but here is a mailing, and you can perhaps figure out how to subscribe and then you can join to ask questions if you need to. S