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For now, there's no sign of a slowdown. has quadrupled over the past five years. production hit its highest level since 1983, back when Alaska's North Slope was gushing. Maybe the number of rigs will go down over the next year, and maybe the pace of production will taper off. But in the oil patch, leases often come with the requirement to keep drilling: Use it or lose it.
More than half the nation's gas stations are now selling gas for less than $3, according to GasBuddy. Evidence is that the low gas prices are starting to goose demand as Americans increase the amount of driving they do. gasoline stockpiles declined by 1.2 million barrels last week, almost two times the drop that analysts expected. The cheapest prices are still in the Southeast.
80 Oil Is Here to Stay
Overseas, lower oil prices will eventually start biting into some countries' economies and their ability to manage their debt. Goldman crunched some numbers and came out with what it thinks some of the biggest oil producing countries need the price of oil to be to keep their deficits in check. The core OPEC producers Kuwait, UAE, Qatar and Saudi Arabia can all operate with oil prices below where they are currently. Down the list however, things get dicey: Russia, Goldman says, needs $101 a barrel, Iraq needs $126, and Iran needs $133.
It's hard to predict how Vladimir Putin or Iran's leaders will react to the economic squeezes that are likely to come their way. A year ago, Iran signaled its willingness to negotiate over its nuclear weapons program after tight sanctions crushed its ability to sell its oil for a decent price. shale boom, which kept a lid on prices while the world turned away from Iran's oil. Whether anything fruitful comes of it remains to be seen.
The oil selloff appears to be permanent. production, a resurgent Libya, and Saudi Arabia lowering its prices in a bid to keep its share of Asian customers all of it has combined to knock oil prices down 25 percent since June, and there might be more room to fall. The report, entitled "The New Oil Order," argues that it's time for American oil producers to slow down in the face of weak demand growth around the world and the quick pace of change. West Texas Intermediate oil will hit Canada Goose Langford Parka Singapore Store Locator $75 a barrel during the first half of 2015 and that Brent will settle around $85 a barrel, about where it is now. isn't likely to pull back until oil gets so cheap that people can't make money drilling for it. shale producers. Some think it's around $80 a barrel, others think it's closer to $60, and it's obviously not going to be the same for everyone. The number changes depending on where you're drilling and how good you are. oil patch is almost certainly coming in the next few years, especially given the amount of junk bonds that are floating the boom. But those oil fields won't necessarily go dry. Stronger drilling companies will simply buy them from weaker ones.