shale oil

8 Oct

london 10.57am sunny 13.6C thursday 2015

i seem to have gotten wifi in the library now. it is from another source, not the library wifi provider which still have an unsafe connection so that my chrome wont allow me to connect to it.

but this one seem to work very well. it has not always been so. before i was in another inner room of the library and i think that room is blocking this company’s wifi, because i have moved to a room nearer the front of the library and the signal is strong here. so that is good. haha.

i have been reading in the telegraph about how the shale oil producers in usa are now feeling the pinch of low oil prices. they may go bust. they are losing money with oil at $50 a barrel. they have endured for a year but it seems their time is up… what with talk of increased interest rates. maybe they were able to last a year since the price drop because of the low interest rates but no business can lose money for so long without going bankrupt.

but u can see how economics is a rather convoluted game. i saw a tv program last night about how rockeffeller was able to monopolise the oil industry by ‘killing’ off his rivals. well that is what saudi arabia is doing now to the shale oil producers in the usa. producing so much oil that the price is kept low. it shows how a cartel can keep prices high, or low if they control the flow of oil. they have been known to keep oil prices high in the past, and caused the world economy to go into depression and markets to crash.

in a way it is a sad thing , but on the other hand, it may bring in balance… and self regulate so that the economy naturally self corrects. i am of the opinion that booms and crashes are necessary in the market economy . it tends to overshoot , so if it booms it just booms like crazy, and then when it crashes it just overcompensate to the other end. wild flunctuations are the norm, i think.

added. the saudi govt is suffering too, as this report suggests. but it has no choice really. it has to continue to pump more oil , so that it weakens the oil price and drive the shale oil companies out of business. otherwise if it reduces its oil output it will keep the oil price high, whilst it loses its share of oil sales. and high oil prices will let the shale oil companies to continue in business.

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