Could be allot of ghost towns in the Dakotas if prices keep dropping.
http://ift.tt/1ysZ2xT
OPEC's message to US shale: Drop dead
OPEC just fired a shot at the U.S. shale industry.
Despite tumbling prices -- the lowest since 2010 -- the cartel surprised the energy industry by deciding to keep pumping oil at current levels. One motivation is to squeeze higher-cost producers in North America, including the booming U.S. shale industry that has reshaped the global energy landscape.
It's a move Tony Soprano would be proud of. OPEC is betting lower oil prices will force U.S. producers to throw up the white flag and cut back on production because they won't be able to turn a profit.
"The gauntlet has been thrown down for Western Hemisphere producers like Brazil, Canada and the United States," Bespoke Investment Group wrote in a note to clients on Friday.
Related: Nightmare for oil stocks
Dot-com bust all over again? The fear is that OPEC's hard line could cause a pull back in the U.S. shale industry, sparking job losses and causing panic in the financial markets.
That's what Russian oil tycoon Leonid Fedun is predicting, although Russia isn't part of OPEC.
"The shale boom is on par with the dot-com boom. The strong players will remain, the weak ones will vanish," he told Bloomberg News on Thursday.
The OPEC move has clearly spooked investors, who sent energy stocks like Halliburton (HAL), Helmerich & Payne (HP) and Schlumberger (SLB) plummeting on Friday. (U.S. markets were closed for Thanksgiving Day on Thursday).
http://ift.tt/1ysZ2xT
OPEC's message to US shale: Drop dead
OPEC just fired a shot at the U.S. shale industry.
Despite tumbling prices -- the lowest since 2010 -- the cartel surprised the energy industry by deciding to keep pumping oil at current levels. One motivation is to squeeze higher-cost producers in North America, including the booming U.S. shale industry that has reshaped the global energy landscape.
It's a move Tony Soprano would be proud of. OPEC is betting lower oil prices will force U.S. producers to throw up the white flag and cut back on production because they won't be able to turn a profit.
"The gauntlet has been thrown down for Western Hemisphere producers like Brazil, Canada and the United States," Bespoke Investment Group wrote in a note to clients on Friday.
Related: Nightmare for oil stocks
Dot-com bust all over again? The fear is that OPEC's hard line could cause a pull back in the U.S. shale industry, sparking job losses and causing panic in the financial markets.
That's what Russian oil tycoon Leonid Fedun is predicting, although Russia isn't part of OPEC.
"The shale boom is on par with the dot-com boom. The strong players will remain, the weak ones will vanish," he told Bloomberg News on Thursday.
The OPEC move has clearly spooked investors, who sent energy stocks like Halliburton (HAL), Helmerich & Payne (HP) and Schlumberger (SLB) plummeting on Friday. (U.S. markets were closed for Thanksgiving Day on Thursday).
The upside and downside of low oil/gas prices
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