Tuesday, March 17, 2015

Piqued by Oil

The price of petroleum's slacking
With all of that pumping and fracking
Maintaining supply
At a level so high,
While demand, at the same time, is lacking. 

One would think, from the low price of crude,
That the future has been misconstrued,
But there's finite supply
In the ground, which is why
When it's emptied, it can't be renewed.

The price of oil continues to fall as, in the face of weak demand, producers from the Arabian peninsula to the tar sands of North Dakota keep pumping it out.   Like the protagonists in the famous Prisoners' Dilemma, exploration & production companies know that they would collectively benefit by slowing the pace of production, but individually they are motivated to cover as much of their costs as possible. 

In the short run, this development benefits consumers around the world, especially where the cost of driving is a major factor. At the same time, the oil exploration & production companies and their lenders are reeling from prices far below those they assumed when budgeting for the costs of extraction. 

In such times it is helpful to take the long view, which is that we are headed toward an eventual fall from the "net energy cliff," in the words of oil analyst Chris Nelder. This is the point at which it takes so much energy to extract the petroleum that it's no longer worth it. Notwithstanding today's bargain prices, that point may be closer than you think. 


11 comments:

  1. I got this blog site through my friends and when I searched this really there were informative articles at the place.
    UI design companies

    ReplyDelete
  2. Wow this was amazing. I was just about to look for some expert and educative content like this, I am grateful that I have frequented here! agen asuransi allianz

    ReplyDelete
  3. Pre-launch users praise the intuitive, user-friendly design, while best design consultancies are pleased that the app meets all technical and medical requirement

    ReplyDelete
  4. They offer a comprehensive management process UX agency San Francisco but remain quite flexible.

    ReplyDelete
  5. Short outings don't consider this and more dampness remains caught in the oil for longer timeframes. how does cbd make you feel

    ReplyDelete
  6. I was reading some of your content on this website and I conceive this internet site is really informative ! Keep on putting up. Oil jobs in Guyana

    ReplyDelete
  7. It is likewise utilized in industry for food handling, beauty care products, and in drugs. Since it's refined it can endure higher cooking temperatures and has a high smoke point. what does sydney cbd mean

    ReplyDelete

Popular Posts