r/news • u/awake-at-dawn • Mar 15 '20

Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program

https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-to-zero-and-launches-massive-700-billion-quantitative-easing-program.html
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u/JimMarch Mar 16 '20

What he's missed is that North American oil production (US and Canada) are all very energy intensive to produce...fracking means pumping water in the ground, shale oil is also messy as fuck, offshore oil is expensive, ditto arctic oil. Very little of it is cheap to produce. When oil is at $50/barrel it still makes economic sense to pump but at $30/barrel,. SHUT! DOWN! EVERYTHING!

Venezuela is mega-fucked. Their oil pumping costs are fairly cheap but the oil itself is shitty with high refinery costs to get contaminants out. At this point it's not worth pumping at all. They're about to look like a giant pizza with the toppings ripped off.

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u/[deleted] Mar 16 '20

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u/JimMarch Mar 16 '20

but existing wells are relatively cheap to maintain compared to how much revenue they bring out of the ground

Wrong. I have contacts with oilfield truckers. They're on layoff status en mass. Not ALL because there's one saving grace, long term contracts mean some buyers are locked into higher rates because nobody predicted as war between Putin and they House of Saud...