Frankly, I have not been following the petrol price for a long time. However, I do know that it’s now higher than the times when it was below RM2. We can choose to wait for the petrol price announcement or we could also read a bit about how the oil market is really moving currently. This is one website where one could read anything about oil. The market, the players, the manoeuvres, the predictions and many more. oilprice.com. Today, let’s just run through two piece of news which I have written about before but now we have some updates. To start, let’s get to know OPEC and shale oil producers in brief.
OPEC stands for Organization of the Petroleum Exporting Countries and it is an intergovernmental organization of 13 countries who are all producing and exporting petroleum. It is considered a powerful organisation because it controls the oil supply in the world UNTIL the arrival of the US shale oil producers.
US shale oil producers are producers who extract oils from rock. Rock? Haha. As per wikipedia, this is the process: “Shale oil is an unconventional oil produced from oil shale rock fragments by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas.” Read more here.
So, in actual fact these two huge oil producers are determining the supply across the world. Both are not good friends by the way. Beyond these two, we also have other nations which are also producing oil but are not part of these two yeah. They include Canada, China, Brazil, Norway, UK, Qatar. Malaysia is a member of OPEC+ which are new members of OPEC. Read here for full details.
Article in oilprice.com. Renewable energy will continue to be a hot topic for many more years to come. However, it is oil which will determine the oil price and there are many reasons for that to continue happening. This is what it says about why this transition is likely to be very hard to do. “Embedded power structures and support for a dying industry.” Briefly, the players in this industry are very powerful even if the future is definitely about renewable energy since oil will run out one day in the future.
Article in oilprice.com This article talks about how the recovery in the shale oil production may spark an increase in oil production and this may happen next year. When this happens, then another price war will happen and of course when a price war happens, it also meant that the price would fall as well. Current oil price at US$60 a barrel makes boosting production extremely tempting.
Some knowledge about cost of oil production
As US$60 per barrel, some shale oil producers are able to earn good profits. It is said that the cost of production for shale producers range from US$40 – 90 per barrel. This is why the number of bankruptcies for shale oil producers would start going up if oil prices fall below US$40 for example. This is because if they (shale oil producers) do not produce, they have no revenue. If they produce and sell, they may be selling their production at a loss. This is why at US$60, the ones who are able to earn profits would definitely be trying to increase its production. It’s hard to predict what will happen in the near future with regards to oil price.
Thanks for reading and learning about oil price too. Now you are able to share this knowlewdge with your friends too.
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