Oil analysts must be asking, Where’s the bottom of the oil-price plunge?
Crude dropped again Tuesday, as Brent was off $2.01, to $51.10 a barrel. In the first two trading sessions of the week, it’s down $5.32, or almost 10 percent.
More from Reuters.
U.S. crude closed down $2.11, or 4.2 percent, to $47.93.
By comparison, Brent was at $115 and U.S. crude at $107 last June.
Phillip Streible, a senior market strategist at RJO Futures in Chicago, told Reuters that “$46 to $45 is quite likely. … People, I think, are further understanding that the U.S. is becoming a powerhouse in creating crude oil and that’s not going to change anytime soon.”
But Saudi Arabia also shows no sign of reducing production quotas, an effort some OPEC members want to prop up prices. Forbes’ Nathan Vardi quoted a Saudi expert named F. Gregory Gause, a professor at Texas A&M University, who said:
“The most important thing for the Saudis is market share. They are not going to sacrifice it, they will play chicken with other producers, whether Iranian or American shale producers, in order not to lose market share and the only way they will cut production is if they get an agreement with a broad array of OPEC and non-OPEC producers to take a fair amount of oil off the market.”
CNN Money has a story about the thousands of workers supporting North Dakota’s oil boom who’ve been laid off in recent weeks, as drillers delay expansion because the cost of extracting oil from shale-rock formations is too steep compared with the going rate of crude.
Jeff Sharpe got the bad news 10 days before Thanksgiving. He and 21 coworkers at a rig in Wyoming were laid off due to depressed oil and natural gas prices.
“All my friends and family keep talking (positively) about low prices. When I say, ‘We’re all out of jobs now,’ they say ‘Oh,'” Sharpe, 32, told CNNMoney. “I don’t think they realize what’s going on in the big picture.”