The drastic fall in global crude oil prices over the past six months could reduce the chance of a universal agreement on climate change policy this year, according to HSBC. Falling oil prices will challenge countries’ ability to implement climate policy, HSBC said in a recent report. --Nyshka Chandran,
CNBC News, 12 January 2015
Due to its flexibility, shale oil has greater resiliency to oil price swings in terms of returns than conventional oil mega-projects. The US shale oil industry will likely emerge from the current turmoil somewhat smaller and slower, but leaner and more competitive. --Richard Zeits,
Seeking Alpha, 13 January 2015
Even after a massive plunge in oil prices, which have dropped more than 50% in less than six months, analysts are saying that it won't be enough to put much of the US oil industry out of business. Goldman Sachs researchers say that oil prices would have to drop to $40 per barrel for six months, down another 15% from their current level, to "keep capital sidelined." That's the level at which Goldman says high-yield defaults might start. --Mike Bird,
Business Insider, 12 January 2015
Nomura has warned that a growing 'Cold War' between Saudi Arabia and Iran will keep the oil price lower for longer. 'The key message from the Kingdom of Saudi is that they will maintain production and tolerate low oil prices in order to drive (1) market share and (2) to drive Iran to regime change. To be clear, we believe this is all about Iran, and not about ‘hanging the US shale assets out to dry’,' Nomura said. What Nomura views as a Cold War between Saudi Arabia and Iran is the key reason behind their lower for longer thesis. --Danielle Levy,
City Wire, 14 January 2015
Russian government officials have appealed for calm after predicting budget cuts and a further surge in inflation as the country faces its worst economic downturn in 15 years. With the currency and economy wilting under the twin blows of Western sanctions and a fall in the price of oil exports, finance minister Anton Siluanov proposed slashing some 10 per cent from most areas of the state budget. --
The Yorkshire Post, 15 January 2015
It’s easy enough to read the basic policy that OPEC is following over the oil price at present. They’re losing market share to unconventional oil producers and they’re not happy about that. So, they’re entirely happy to allow the price to fall so as to keep their own market share. The basic assumption is that those large conventional reservoirs will always be cheaper to produce from than those unconventional deposits. Thus, as the price falls, the unconventional producers go out of business, OPEC retakes market share and all is rosy in their garden. However, this only works if that analysis about who is the low cost producer is actually correct. --Tim Worstall,
Forbes, 15 January 2015
As the price of crude oil has collapsed in recent weeks, Americans have celebrated as the price of gasoline followed suit. But in Venezuela, where oil is the country’s economic lifeblood, the collapse is pushing a country already on shaky ground to the edge of default. In Venezuela, long lines for even the most basic products like toilet paper, toothpaste, soap, and even food. All of the goods continue to be scarce as Venezuela’s economy collapsed as the price of oil plummeted over the last year and the consumers, especially poor consumers, are becoming desperate. --
NBC News, 13 January 2015
Cratering oil prices may convince some energy companies that drilling for natural gas is a more profitable venture, and the Haynesville Shale in north Louisiana is already seeing more activity, Louisiana Oil and Gas Association President Don Briggs says. Comstock Resources has already announced it will move rigs from other oil formations back to the Haynesville, Briggs says in his weekly column. --
The Advocate, 15 January 2015
