Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next

[wehateporn]

In space, no one can hear you scream... unless you happen to be Venezuela's (soon to be former) leader Nicolas Maduro, who has been doing a lot of screaming this morning following news that UAE's Energy Minister Suhail Al-Mazrouei said OPEC will stand by its decision not to cut crude output "even if oil prices fall as low as $40 a barrel" and will wait at least three months before considering an emergency meeting.

In doing so, OPEC not only confirms that the once mighty cartel is essentially non-existant and has been replaced by the veto vote of the lowest-cost exporters (again, sorry Maduro), but that all those energy hedge funds (and not only) who hoped that by allowing margin calls to go straight to voicemail on Friday afternoon, their troubles would go away because of some magical intervention by OPEC over the weekend, are about to have a very unpleasant Monday, now that the next oil price bogey has been set: $40 per barrell.

Luckily, this will be so "unambiguously good" for the US consumer, it should surely offset the epic capex destruction that is about to be unleashed on America's shale patch, in junk bond hedge funds around the globe, and as millions of high-paying jobs created as a result of the shale miracle are pink slipped.

Continued Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next | Zero Hedge

[Barry-xlovecam]

I used $53 a barrel for the 2015 average.



Shale oil production can be suspended and reactivated on short notice and will act as a floodgate against cartel pricing of oil. Its (shale oil's) production cost being the new floor price of oil.



Shale oil's price of production will go down with better efficiencies. Some OPEC and other world producers can operate at $40 a barrel -- most cannot.

[Jel]

looking forward to UK petrol prices going up