The Great Gas Debate, page-21

Well here's a scoop.

Remember the commentary that said that there's squillions of barrels of oil coming online from North America which is going to force oil prices down and everyone is going to be happy because petrol prices will fall and the economies would benefit from all this additional crude sloshing around the world.

Well ....not so fast.

It appears that there is a lot of shale producers in trouble and if not finding it hard to make a buck as a lot of their predictions were based on circa US$90.00 a barrel. Also seems like that they borrowed a tincy whincy too much to fund their drilling programmes etc and are quite stressed.

The line of credit you will be able to get will drop because as the price of oil drops banks don't want to lend as much  (Source CNBC)

Don Dicker (author of "Oil's Endless Bid) stated

"They simply cannot service the debt with prices that are hovering in the low $80s, and they're going to start to go broke,"

and

"I've been in the market too long to make a prediction where the lows will be, but I do know that underneath $85 there's a lot of production that simply cannot come online,"

This appears not to be a zero sum game for a lot of producers and this is typical of an industry that is just latching onto and suckling the oil teet at any cost trying to cash in.

We really are in the hands of a bunch of cowboys.

So the Saudis may not have to cut production at all as it might just happen naturally to all those who will struggle just to get through this little test and in the words of Warren Buffet we really will see who is naked when the tide goes out.

In the meantime those companies who have cash ...................

Cheers
BW

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And then is heard no more. It is a tale
Told by an idiot, full of sound and fury
Signifying nothing.