The Video is very helpful and only 5 min.
Link:
http://www.msn.com/en-us/money/markets/major-oil-companies-unveil-the-damage-of-dollar45-crude/ar-BBmzbTW?li=AA4Zjn
Friday, October 30, 2015
Major oil companies unveil the damage of $45 crude
It was a bruising day for Europe's energy sector Thursday, with the full extent of the pain caused by low oil prices being laid bare in a series of earnings reports. Anglo–Dutch multinational Royal Dutch Shell reported a loss of $6.1 billion, compared with a gain of $5.3 billion for the same quarter a year ago, a decrease of 70 percent. This included a large $8.2 billion write-off due to a downward revision of its oil and gas price outlook and also a decision to halt projects in Alaska and Canada.
The Video is very helpful and only 5 min.
Link:
http://www.msn.com/en-us/money/markets/major-oil-companies-unveil-the-damage-of-dollar45-crude/ar-BBmzbTW?li=AA4Zjn
The Video is very helpful and only 5 min.
Link:
http://www.msn.com/en-us/money/markets/major-oil-companies-unveil-the-damage-of-dollar45-crude/ar-BBmzbTW?li=AA4Zjn
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2 comments:
I feel that this news, while shocking, is not surprising. With the price of crude oil being drug down by Middle Eastern enterprises, we knew this day would come, it was just a matter of when. While disappointing for American companies and the domestic economy, it is the perfect example of the market at work. Middle Eastern companies are able to produce crude oil at a price lower than is possible for American enterprises. Therefore, by flooding the market, Middle Eastern companies were able to drive down the price of crude oil to the point in which it costs American companies more to produce the oil than they were receiving in profits. Ultimately, American enterprises will be pushed out of the market and only those who can sustain the low price of crude oil will remain.
That being said, I think it is now just a matter of time until American companies will be pushed out of the market completely, and crude oil prices begin to rise... I think the question now becomes, do you think the American government will step and help out American Enterprises or will they leave the market to fix itself by consuming American enterprises and return to equilibrium?
You have to wonder if this also could have affected TransCanada's decision to request to delay the Keystone XL project. This $8 billion project needs a lot of confidence and strong outlook if they're going to spend that amount of money.
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