by
Tom Moore on Dec 16, 2018 9:24:00 PM
Answering this question is harder now than ever:
Forcing prices up:
- Saudi Arabia and Russia (the second and third largest producers in the world) are planning production cuts along with OPEC
- US embargo on Iran (which has more exceptions than expected)
- Canada cutting production
- At some point, shale drilling becomes uneconomical – but producing from existing wells (sunk costs) will continue, albeit the well life is relatively short
Bringing prices down:
- US shale producers. When more pipelines are built in – for example, the Permian Basin – expect oil production to jump. Of interest is the producers there, constrained by regulation about how much byproduct gas they can flare (burn-off) are paying to get it taken away…this is at a time when gas is at one of its highest prices in years
- Slowing global demand
In the Thanksgiving rush, UPS delivered 98.3% on time. FedEx delivered 98.9%. It seems that the new infrastructure has resulted in the best on-time delivery performance in the last 5 years.
