{"id":3924,"date":"2015-01-02T20:09:59","date_gmt":"2015-01-03T01:09:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=3924"},"modified":"2015-01-02T20:09:59","modified_gmt":"2015-01-03T01:09:59","slug":"museletter-271-the-oil-price-crash-of-2014-richard-heinberg","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=3924","title":{"rendered":"Museletter 271: The Oil Price Crash of 2014 | Richard Heinberg"},"content":{"rendered":"

Museletter 271: The Oil Price Crash of 2014 | Richard Heinberg<\/a>.<\/p>\n

The Oil Price Crash of 2014<\/h3>\n

\"\"<\/a><\/p>\n

Oil prices have fallen by half since late June. This is a significant development for the oil industry and for the global economy, though no one knows exactly how either the industry or the economy will respond in the long run. Since it\u2019s almost the end of the year, perhaps this is a good time to stop and ask: (1) Why is this happening? (2) Who wins and who loses over the short term?, and (3) What will be the impacts on oil production in 2015?<\/p>\n

1. Why is this happening?<\/i><\/b><\/p>\n

Euan Mearns does a good job of explaining the oil price crash\u00a0here<\/a>. Briefly, demand for oil is softening (notably in China, Japan, and Europe) because\u00a0economic growth is faltering<\/a>. Meanwhile, the US is importing less petroleum because domestic supplies are increasing\u2014almost entirely due to the frantic pace of drilling in \u201ctight\u201d oil fields in North Dakota and Texas, using hydrofracturing and horizontal drilling technologies\u2014while demand has leveled off.<\/p>\n

Usually when there is a mismatch between supply and demand in the global crude market, it is up to Saudi Arabia\u2014the world\u2019s top exporter\u2014to ramp production up or down in order to stabilize prices. But this time the Saudis have refused to cut back on production and have instead unilaterally cut prices to customers in Asia, evidently because the Arabian royalswant<\/i>\u00a0prices low.\u00a0There is speculation<\/a>\u00a0that the Saudis wish to punish Russia and Iran for their involvement in Syria and Iraq. Low prices have the added benefit (to Riyadh) of shaking at least some high-cost tight oil, deepwater, and tar sands producers in North America out of the market, thus enhancing Saudi market share.<\/p>\n

<\/p>\n

<\/a>…click on the above link to read the rest of the article…<\/span><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Museletter 271: The Oil Price Crash of 2014 | Richard Heinberg. The Oil Price Crash of 2014 Oil prices have fallen by half since late June. This is a significant development for the oil industry and for the global economy, though no one knows exactly how either the industry or the economy will respond in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[589,1775,596,1081],"class_list":["post-3924","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-oil-demand","tag-oil-price-collapse","tag-oil-supply","tag-richard-heinberg"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3924"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3924\/revisions"}],"predecessor-version":[{"id":3925,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3924\/revisions\/3925"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}