Hi all In reply to Jed Rothwell.
The 15% Figure is the maximum value of oil in post fossil fuel age and the $1 value is what they stated they are willing to go to. The reality of the future market price is between the two. Factors that will affect the price of oil including allowing or causing continued low prices. 1) Strategy, they wish to kill off their competitors. 2) Strategy, they want to slow the take up of LENR. 3) Technology, LENR will cut the costs of production of everything including oil. 4) Keeping the prices low will kill off US and other western Fracking concerns which have high start-up debt costs. 5) Those Fracking wells that go bust because they cannot pay their loans, will be bought up by big oil, as without the debt they are reasonably cheap wells to run, but most such Fracking wells have less than a half of decade of life in them, many as little as two. Putting in new Fracking wells in a low oil value post Fossil Fuel era will not be viable, so Russia Iran and Saudi Arabia will only need perhaps as little as two or three years to replace high margins on low volume with low margins on high volume. Consider the volume required will be coming down at the same time The Saudis Russians and Iranians ramp up production. 6) The oil market will be among the be among the earliest adopters of LENR, with everything, from rigs to to oil tankers. 7) Saudi Arabia and Russia have far bigger abilities to cope with low income than many think, look at Iran they just lived through decades of sanctions. Saudi Arabia owns big chunks of the USA and Europe, most malls and warehouse districts you go to have a massive Saudi Ownership once you look through who owns what. 8) Each of these countries will look to diversify and move into an LENR enabled economy. I personally think Iran and Russia have the technical and educational edge on the Saudi's but Saudi Arabia has the biggest war chest so they will each be fighting out with the rest of the world for a share of the action. The above is not a complete thesis :) Kind Regards walker On 15 March 2016 at 02:35, Jed Rothwell <[email protected]> wrote: > Ian Walker <[email protected]> wrote: > > >> So oil will drop to 15% of its expected value from that 2014 high. >> > > When the demand for a commodity rapidly drops by 85%, it does not follow > that the value also falls by 85%. In most cases it will fall even more than > that, as sellers become desperate to unload inventory. In some cases there > is a "floor" to how far it can fall. I do not think it is possible for any > country to extract oil for only $1 a barrel. It might as well be $0 (free), > and no country can afford to give away oil for free for long. They cannot > do that because costs them much more than $1 to extract it, plus they would > have no income. Oil is 87% of Saudi Arabia's exports, and 70% of Russia's. > > > >> My understanding is that Saudi Arabia, Iran and Russia are all prepared >> to drop oil to the $1 per barrel mark to kill off the majority of their >> competitors. > > > As I said, I think this would kill themselves off. I doubt that Saudi > Arabia or Iran have a lot of foreign exchange saved up, and I know that > Russia does not. They cannot go for years without income, while they spend > billions extracting oil and giving it away for nothing. > > - Jed > >
