mibbz wrote:Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$.
When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day.
They are planning on pumping 500K bpd in the short term with a projected increase in the coming years.
OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above.
In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply.
Iranian oil production is adequately a threat. Entry into the oil market has created some astonishing ripple effects on the political arena in the middle east. Execution of Iranians associated with"terrorism"was a side show to trigger diplomatic tangles between the two countries. All this happened shortly before the sanctions were lifted off Iranians.
Saudis ain't happy with the entry of Iranians because of vast oil deposits and cost oft production that they have.bringing tensions between the sunnis and shiites.
Expect prices to be low as Iranians want to economically punish the Saudis. I foresee rebound in five years to roughly $56pb