Falling oil continues

11 December 2014, 20:10
Vasilii Apostolidi
0
169
Oil continues to fall. WTI approached the critical level of $ 60 and Brent reached 63.8.

Approximately half of US companies producing shale oil, at this price it becomes unprofitable to drill new wells.

As shown in the following figure, a sharp drop in the number of oil wells in 2008 was 5 months after the start of lower prices and the price of oil at that time was in the bottom 1/5.



In November, the number of permits for drilling decreased by 40%.

We note that the total number of wells in 2014 to more than 3 times more than in 2008.

I think that oil could fall another 5-10 dollars, although this is not mandatory.

Falling oil after some time will cause deterioration of the country's economic performance since the energy sector is linked at least one third of the economic recovery.

There will be problems in different financial sectors. Problems in the corporate finance sector has already begun.

I think that after 2-3 months drop in oil prices will have a significant negative impact on the US economy and the US dollar.McAuley NICHOLAS LUDANOV
Share it with friends: