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Technology Stocks : Game Changers and Market Movers

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From: Paul H. Christiansen	12/1/2014 10:34:33 AM
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The Global Shakeout From Plunging Oil The decision by members of the Organization of the Petroleum Exporting Countrieson Thursday not to cut production reflects a profound shift in the world oil market. The demand for oil—by China and other emerging economies—is no longer the dominant factor. Instead, the surge in U.S. oil production, bolstered by additional new supply from Canada, is decisive. This surge is on a scale that most oil exporters had not anticipated. The turmoil in prices, with spasmodic plunges over the past few days, will likely continue. It is now clear that the new U.S. production is more resilient than anticipated. There has been a widespread view that at around $85 or $90 a barrel extracting “tight” oil from shale would no longer be economical. However, a new IHS analysis based on individual well data finds that 80% of new tight-oil production in 2015 would be economic between $50 and $69 a barrel. And companies will continue to improve technology and drive down costs. True, with prices now near or below $70 a barrel, U.S. companies are looking hard at their investment plans—where and how much to cut or postpone. But it will take time for these decisions to affect supply. U.S. oil output will continue to rise in 2015. The complete WSJ article is available only with subscription . . . The Global Shakeout From Plunging Oil

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