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I think this is the real underlying issue. SA is looking at all this oil inventory, and if their oil ends up going unsold, they lose money in the long run. This
by altcognito 12y ago
I think this is the real underlying issue. SA is looking at all this oil inventory, and if their oil ends up going unsold, they lose money in the long run. This may end up being a clearance sale. My guess is that they'll try to seek a maximum price without reigniting the US shale insustry over the next year. That price might be $60/$70.
- crdoconnor 12y agoWell, it costs them virtually nothing to extract, which is why they are able to sustain such low prices for such a long time. In the long run they are screwed by the Dutch disease. They don't create anything apart from oil, so once demand dries up, their exports shrink 90% and their economy shrinks 55%. This probably means violent revolution as well as impoverishment.