- Oil hit $30 on Fri.
- The oil production is increasing as the price comes down. This is coz there’s no production ceiling set by OPEC this yr. So OPEC members are producing 2.2 million barrels above their last yr ceiling.
- A reason for this are
- To kill the Shale Oil Industry(Shales are fine-grained sedimentary rocks that can be rich resources of petroleum and natural gas) as it’s extraction costs $30+
- To gain more mkt share. S Arabia first started over producing and cutting price and others followed.
- Moreover, the demand from China is down
- Won’t fall further as marginal cost is around $15
- Price fall is not percolating to consumers as India etc. are removing subsidies
- Saudi Arabia, due to reduced oil revenue is for the first time in history introducing income tax. Their currency that’s currently pegged against dollar (fixed exchange rate) might now have to be floated or devalued
On the economic "disconnect" in the U.S. and China (Jan. 15, 2016) | Charlie Rose – YouTube
- Rich educated STEM folks are recovering but for less educated the salaries are declining