Crazy world of oil fall theories where studying the problem can alter its outcome
“Your theory is crazy, but not crazy enough to be true”, as quantum physicist Niels Bohr said. The fall in oil prices has spawned numerous theories, some crazier than others, about how US shale oil will react and what, if anything, Opec should do in response.
One school of thought is that lower prices are already having an effect on shale oil production in the United States, and that production will begin to fall, perhaps by the end of the year.
Evidence includes the bankruptcy of companies such as producer Quicksilver Resources last Tuesday, and the continuing fall in US drilling rig counts, now down 761 from last year’s 1809 rigs.
On what happens beyond this point, opinions diverge. Long-term shale pessimists believe the bubble has now burst. An overleveraged sector will collapse...
51 minutes ago