The Question You've All Been Asking

HardAssetsInvestor: What's the biggest reason oil prices have dropped so dramatically in recent weeks?

Phil Flynn: If I only have to give you one reason, it would be the rise of U.S. oil production. It’s really changed the world. We also have a slowing global economy, and Saudi Arabia is raising oil production, along with other OPEC members. They wouldn’t be doing that if they weren't concerned about losing market share to non-OPEC producers such as the United States and Russia.

We’re in this dynamic because the U.S. oil producers are shaking up the Saudis a little bit. And in return, the Saudis are trying to send the U.S. oil producers a message by producing more oil. It’s a combination of those factors that’s driving prices down.

HAI: Do you think that these lower prices are going to derail the U.S. oil boom?

Flynn: That's what the Saudis hope. But I don't think we’re there yet. A lot of people say the marginal cost for U.S. production is $80/barrel. Yet even at $80, we’re above breakeven for most producers. I've seen estimates that suggest many producers can produce profitably at $30. It really depends on the people you talk to.

  ETF

So, what you’re saying is that we should really be paying about a buck fifty a gallon?



So, it kind of looks like the drop in the price of oil is a bad thing for our oil-export-dependent "enemies" and the stolen/occupied fields controlled by IS in Iraq.  But I don't guess that could have anything to do with it, could it?