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Cutting production is a problem for Saudi Arabia because if they cut production and prices go up then everyone else benefits more than they do because they are selling less oil, and they really really hate some of those that benefit. Meanwhile everyone else is pumping full speed despite losing money per barrel because in the US/Canada the bonds they issued to pay for the equipment and wells don't go away if they idle the wells and in places like Venezuela/Russia the entire government would implode without the oil money. Somebody needs to fall on the grenade but that is not going to happen. SA's only real way to win it is to keep prices low long enough that the currently running wells dry up and are unable to be replaced because of the reduction in new well exploration. I'll do my part by keeping my heat turned up all winter because seriously my natural gas bill is so loving cheap it is great.
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Jan 12, 2016 18:03
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I was also under the impression that a lot of the leases in TX at least were written in a way that if they weren't being actively worked they would eventually revert back to the owner of the land. A lot of people got burned by the last Texas oil boom/bust where the leased land sat idle because the company it was leased to didn't want to do anything until prices recovered.
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Jan 13, 2016 00:02
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Celot posted:hah WTI is more expensive than Brent now. People with law degrees aren't exactly doing so hot at the moment.
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Jan 16, 2016 01:24
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