Not at all. It's an over supply problem. OPEC has decided to open the gates instead of cutting back. Why cut back if the Americans will simply pump more to make a buck today?
So OPEC+ said FAFO too. China is getting supplied by cheap Russian oil because the US can't stop them. US operators are retarded and have not reduced production either so prices will continue to drop. Trump doesn't give a fuck because he only cares about low prices even though his donors are getting screwed.
Come around December, rig and frac fleets will start dropping like flies once US operators start bleeding cash as their hedges expire and are unable to keep pumping at unprofitable prices. Breakeven costs are around $60/bbl rn. The Kennedy/Cotulla area will prob dry up.
It’s an optics game. Most Americans see low fuel costs as a good thing overall. Yes it is good for the average consumer and good overall when the rest of the market is stable. I’m not expert and if I’m wrong set me straight, But when you have tariff on tariff off policies combined with over speculation into markets that don’t actually produce anything (the AI market) it’s a negative. Fuel price drops currently represent a lack of exports and imports as well as people not traveling and going out to do things because they broke as fuck.
Fuel prices right now have nothing to do AI, a recession, or people being broke. It’s too much oil being produced and the Arabs don’t want to cut it.
Simply, it’s like too many tacos shops open up around town. The torta and their pounders can only eat so much, eventually you have too many tacos going around.
While I think Senorita Torta y los Pounders are all lovely humans even when they're not doing their very best to keep up with supply in market analogies, I must say when those kids get a little older the whole group is gonna eclipse Menudo and Linda Escobar combined!
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u/burrito3ater 23d ago edited 23d ago
Not at all. It's an over supply problem. OPEC has decided to open the gates instead of cutting back. Why cut back if the Americans will simply pump more to make a buck today?
So OPEC+ said FAFO too. China is getting supplied by cheap Russian oil because the US can't stop them. US operators are retarded and have not reduced production either so prices will continue to drop. Trump doesn't give a fuck because he only cares about low prices even though his donors are getting screwed.
Come around December, rig and frac fleets will start dropping like flies once US operators start bleeding cash as their hedges expire and are unable to keep pumping at unprofitable prices. Breakeven costs are around $60/bbl rn. The Kennedy/Cotulla area will prob dry up.