A spat of stories today following the announcement of ExxonMobil record profit unfolds how the free market may be the undoing of oil before the oil runs out.
- The days of $145 a barrel are over, it's now trading at $65.
- Exxon produced 8 percent less oil and gas equivalent last quarter than it did a year earlier even with ample capital to increase production. As oil prices slide, the budgets A 26 percent quarterly jump in Exxon's capital spending, which reflects the difficulty the industry faces in obtaining and exploiting the few new energy reserves it manages to get its drills into.
- Shell said Thursday it will indefinitely shelve a decision on expanding its operations in Canada's oil sands because of increased costs, while Marathon said its 2009 capital budget will be more than 15 percent smaller than this year's allocation.
- "Most of these companies have seen their peak earnings," Gheit said. "I think earnings will come down. The question is not if, but by how much, and who is going to suffer more."
Yep, I have to agree with you on this one. This is unprecedented. Oil has never been as low as $65. Demand will dry up and I doubt they'll ever drill again. This is what will finally trigger the move away from oil.
I am curious how much an effect OPEC will have on raising price back up. They are expected to meet before December if the price continues to sag
I think from here on out oil price will be a roller coaster with broad swings much like the stock market and for the same reason. Investing based computer models and global, mega corporate, macro-control conditions.
More long-term investing (the way the small investor would like to save for retirement); small business creative alternatives that harness the innovation of free sources of energy.