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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (36341)	1/31/1999 12:14:00 AM
From: Rob Shilling	Read Replies (2) \| Respond to of 95453

Slider, I enjoy your posts, I don't know either if lower oil prices and the "glut" were part of a plot by OPEC or the west. I for one would not put it past Clinton to politicize oil prices, and to strike some sort of deal to get them lower in order to keep the U.S. economy growing. I also, would not doubt that Saudi Arabia is now dragging its feet on cutting production because we are already a year into the bankrupting of high cost oil production. Every month from here brings more long term damage to high cost production. I saw a post recently that said that Saudi Arabia may actually have been hedged during this oil price slump. I wonder if that is valid. At any rate, I know their "welfare" cost for oil is something like $15 a barrel, but they do still get positive cash flow for selling oil at very low prices. At very low oil prices (single digit on WTI), most other producers in the world would actually lose money on every barrel pumped. At any rate, I can't believe how low oil prices are and how long they have been low. It is almost like oil prices have become as unrealistic as internet stock prices. I thought commodities could not act so insane. We are at all-time rig count lows, we have major oil fields around the world that are unprofitable and we have future production dropping thanks to bad oil economics. The damage to all higher cost oil production has to just be immense. All this at a time when actually excess oil supply is only a small 8% or so of demand (and falling rapidly). I think the world is facing its first true shortage of oil sometime in the near future.