You’ll never see $70 oil again.

[Snagglefoot]

I’ll go out on a limb and counter the idea that “ things will get back to normal”. The US oil industry will not go back and drill for $70 oil. Harold Hamm set the tone when Continental stopped drilling for $60 oil in North Dakota earlier this year.

I will say I was wrong if it goes back, but let’s see.

 

[SC Maintenance]

The cure for high prices is high prices.

Oil goes to $100. Everyone drills with abandon. World goes into recession. We’re awash in oil and it goes to $30.

Rinse repeat. Always same. Forever is a long time.

 

[K-Man]

Keep in mind that the big oil producers aren't paying market rates for all that oil they drill and pump themselves. It might cost them $10 for a barrel of crude from their own holdings. The present spike in fuel prices in the US is a scam. We'll see how many new yachts and executive jets the oil CEOs buy over the next year from these windfall profits.

 

[Snagglefoot]

The cure for high prices is high prices.

Oil goes to $100. Everyone drills with abandon. World goes into recession. We’re awash in oil and it goes to $30.

Rinse repeat. Always same. Forever is a long time.

$70 is the new $30. Oil first hit $50 in 2005, over 20 years ago.

 

[LenZee]

Higher oil prices will allow less profitable wells to operate again.

 

[Snagglefoot]

Keep in mind that the big oil producers aren't paying market rates for all that oil they drill and pump themselves. It might cost them $10 for a barrel of crude from their own holdings. The present spike in fuel prices in the US is a scam. We'll see how many new yachts and executive jets the oil CEOs buy over the next year from these windfall profits.

Where did you pull out the $10 number? The industry has been using horizontal drilling and multi-fracking for over 15 years. $60 would only be breaking even.

 

[Snagglefoot]

The US oil industry has been trying to give a wake up call to the world. The world is not awash in oil.

 

[Oillover]

The world is not awash in oil.

If the production increase in plastics (which is a byproduct of oil) is any indication of the state of oil, I'd say we have nothing to worry about.
There's plenty to last the lifespan of anyone reading this thread.

 

[Snagglefoot]

If the production increase in plastics (which is a byproduct of oil) is any indication of the state of oil, I'd say we have nothing to worry about.
There's plenty to last the lifespan of anyone reading this thread.

But not at $70 per barrel.

 

[D16A6_Driver]

I watched 2 seasons of Landman and I agree with your assessment. Got to make global oil prices go up significantly for the US oil producers to make it worthwhile to drill and pump and also get that Venezuela oil.

 

[97prizm]

I’ll go out on a limb and counter the idea that “ things will get back to normal”. The US oil industry will not go back and drill for $70 oil. Harold Hamm set the tone when Continental stopped drilling for $60 oil in North Dakota earlier this year.

I will say I was wrong if it goes back, but let’s see.

They will if the oil speculators quit going crazy. None of our oil or resources come from iran.

 

[wavinwayne]

Instead of saying what I'm feeling, which would get me banned from BITOG, I'll just say I hope OP is wrong and oil prices fall soon. I don't expect that to happen.

 

[Patman]

I remember saying ten years ago that we would never see gas in Ontario below $1 a liter and then during the pandemic it was as low as 50 cents a liter.

Never say never. I do believe we will see oil under $70 a barrel again but not anytime soon

 

[Snagglefoot]

They will if the oil speculators quit going crazy. None of our oil or resources come from iran.

Not how it works at all. Sorry.

 

[PWMDMD]

They will if the oil speculators quit going crazy. None of our oil or resources come from iran.

The claim “none of our oil or resources come from Iran” misses how oil pricing works. The U.S. may import little or no Iranian oil directly, but oil is still priced in a global market, and disruptions involving Iran can raise prices worldwide because they threaten major regional supply and shipping flows. EIA says about 20 million barrels per day, roughly 20% of global petroleum liquids consumption, moved through the Strait of Hormuz in 2024.

Fuel prices may come down if traders stop pricing in major supply risk, but it is wrong to pretend Iran does not matter just because the U.S. does not directly import Iranian oil. Iran matters because it can disrupt a globally important oil transit route and broader Gulf energy supply. If countries who do normally buy Iranian oil or oil from any of the surrounding areas that have been damaged and they can't get it, then they bid on the oil from elsewhere to meet their needs.

 

[Rand]

one thing about high oil(gasoline/diesel) prices
People will look at hybrids, plug in hybrids, and BEV more serious.
If gas reaches and stays above $4 I would certainly consider one harder next vehicle.
Gas currently 3.79 here. up about 80 cents.

I remember in 2006 driving to Maine (950miles? each way) in my 2002 ranger 4.0 4x4 that got 16-20mpg and gas was $4+ range.. ouch
and that was in 2006 dollars. The boat gas in Maine was ouch too

The fracking industry has changed.. they aren't drill baby drill anymore.. they have considerably more patience and financial discipline
I'm sure they will start drilling more but I doubt the massively fluctuating oil barrel price scenario unless OPEC starts dumping massive oil on the market after this IRAN situation is over.

 

[demarpaint]

Six plus decades on this planet taught me, never say never. My bet, this time next year gas prices will be about the same as before the current Military operation began, and the stock market higher.

 

[Zee09]

I don't want to see it.
I want to use it ..........

 

[shortyb]

If countries who do normally buy Iranian oil or oil from any of the surrounding areas that have been damaged and they can't get it, then they bid on the oil from elsewhere to meet their needs.

Or bid on/purchase finished product from us which squeezes our supplies and skyrockets prices at the pump. But don't be fooled that the Strait is closed. Iran is letting ships from it's biggest customer (China) as well as a few others pass through unmolested.

 

[PWMDMD]

one thing about high oil(gasoline/diesel) prices
People will look at hybrids, plug in hybrids, and BEV more serious.
If gas reaches and stays above $4 I would certainly consider one harder next vehicle.
Gas currently 3.79 here. up about 80 cents.

I remember in 2006 driving to Maine (950miles? each way) in my 2002 ranger 4.0 4x4 that got 16-20mpg and gas was $4+ range.. ouch
and that was in 2006 dollars. The boat gas in Maine was ouch too

The fracking industry has changed.. they aren't drill baby drill anymore.. they have considerably more patience and financial discipline
I'm sure they will start drilling more but I doubt the massively fluctuating oil barrel price scenario unless OPEC starts dumping massive oil on the market after this IRAN situation is over.

This is a good point so many miss. The "Drill baby drill" is the answer to lowering gas prices is so flawed because it assumes all these companies only want to maximize production. They want to maximize profits. ALL petroleum companies have excellent discipline and they will simply not produce oil/gas when prices are low and wait to sell it when prices are higher. Lowering gas prices for Americans isn't their objective and it never has been. We've been sold the idea that production capacity is the limiting factor when the truth is price is the limiting factor and for a given production level (the part oil companies can control) the only thing that will increase price to make selling more profitable are disruptions to supply elsewhere or more demand - drill baby drill doesn't address either of those issues.