My electric in New England is mostly coming from NG. The price doubled from $0.12 to $.24 from Eversource my supplier. I believe the rate is only in effect for six months this time.
The price was decided closer to the top or basically when NG cost more than today.
The bottom is not all that near yet. How far down it will bottom is not clear yet.
This chart is ominous because of the chance that oil falls off a cliff. Not at all sure it will fall off a cliff but the view is interesting…
I had thought $60 bl was in the cards for a long time now.
But back prior to Covid during the supply side period all the conditions were different. Now I am not certain that with the Western Cartel and western interest rate hikes that a much lower price would not be hit. Well could hit a much lower price.
This chart includes the pre demand side econ period. The data is now obsolete.
60 is entirely possible because most oil companies still make money at 60. But below 60 can’t last for long because businesses that don’t make money can’t exist for very long.
Mark,
You are talking a majority perhaps of US suppliers but there are suppliers that have much lower costs. In the US I do not fully trust your figure either. The industry is well known for making up numbers to suit themselves.
There are indeed, but those lower cost suppliers are part of a cartel that will stifle supply as soon as prices get into the 50s.
It’s important to remember that commodity prices are set at the margin. At any given time, it’s those last few hundred thousand barrels that set the price.
Again the Western Cartel is much more powerful. There is more than one way to skin a cat. The past is no predictor of the future.
Unless the second cartel can deliver the full supply, they are not relevant to pricing, because pricing is determined at the margin.
If demand is 100 units, and cartel A can supply 60 units, and cartel B can supply 60 units, then it doesn’t matter what cartel B does if cartel A is willing to ship only up to 39 units until the price they demand is reached.
That is not true. The Western Cartel is dictating the price of Russian supplies to India and China. The margins? What are those? Where with who when? A total non issue. Not sure why you would bring them up other than they used to be an issue. The pressure on other oil producers is to lower prices. You believed it was a matter of marginal trade when oil was $100 bl. The cat is trying to climb a greased pole.
The international relations between supplying countries and consuming countries is being rewritten. Iran is supplying Europe with NG and DC is ignoring it taking the sanctions quietly off the table. That puts pressure on other NG producers.
adding for clarity…the Western Cartel is using Russian Oil and NG and Iranian Oil and NG to bring down global pricing for Oil and NG. Obviously that was never Russia’s or Iran’s plan but that is what is being done to them and all the others. The economic theory has always maintained that the Western Cartel was far more powerful if ever created than OPEC. We have arrived at that day because of the war in Ukraine.
BTW if Saudi Arabia ran afoul of the Western Cartel we would dictate their pricing directly as well. Sovereign power is far greater than market power.