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Thread: Oil?

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    Diamond Member Justloadit's Avatar
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    Could Lockhead's recent article on Compact Fusion have played a role in the oil price
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    Quote Originally Posted by pmbguy View Post
    Should we not be investing in oil right now... you know, buy low sell high?

    (Please don’t use big words because it confuses my small and primitive brain)

    Ok so I went out and bought some oil this weekend. Not sure if I should keep it in the garage or the laundry ....

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    Gold Member irneb's Avatar
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    Quote Originally Posted by Justloadit View Post
    Could Lockhead's recent article on Compact Fusion have played a role in the oil price
    Nah ... methinks the increase in supply sources due to the extreme increase in the price over the 00's is the main reason.

    In particular stuff like fracking became much more profitable, and now once the main investments have already been made it just might still be profitable even at these new lower prices. Previously stuff like the oil sands in Canada (which is steamed out of the ground) were simply too expensive to extract, then once that $100 was reached it became profitable enough to attract investment. Now that the main investment has been spent the operating costs allow for it to still continue at this new $50 price.

    The main question is just how long this can continue. Are these "horizontal drilling" techniques profitable in the long run or not? If they are, then we're in for at least 100 years of oil extraction - and that's just Canada's oil. I.e. an over supply which would then balance at the economic cost of extraction instead of the price-fixed OPEC historical situation.

    This isn't very good for Sasol's oil from coal idea though, since that technology's not actually become much cheaper than it used to be (if at all) - so a drop in the oil price means less profit (or even more loss) for that particular section of Sasol. For my money, I think that's why that large drop in Sasol's price happened last year. Of course that's also a bit narrow minded, as Sasol isn't "just" doing that.
    Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves. - Norm Franz
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    Diamond Member wynn's Avatar
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    And if you bought R50's worth yesterday you would have lost R4 overnight!
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