The State of Affairs in Russia

[Zanza]

The break-even price for US shale production is between $40-$115/barrel supposedly, so some of them will definitely survive this. Canadian tar sands are at $100/barrel though, so those are no longer viable at this price point. Countries like Venezuela, Iran or Russia are just caught in a perfect storm despite not even being the target of the price war between the Saudis and the Americans...

[Barrister]

Wait, oil is $67 a barrel now? Holy shit. Wasn't it already at an all time low at $80-something a barrel few months ago, or was that a different kind?

Saudi Arabia has been turning on the tap trying to make shale oil and tar sand oil economically unviable, hoping to provoke the people behind those projects to abandon them.

I'm no expert, bit surely the saudis can't keep that indefinitely.  And the moment they turn off the tap, the  moment fracking becomes viable again and projects move forward.

Oil and gas projects can have a long lead time though.  If companies shutter production, or go out of business, it will take years for that production to get re-started.

Well, then the current prices shouldn't matter much if it's understood that it's just a temporary, and artificial,  blip.

It becomes a question of cash flow and stock prices though.  Some companies don't have the resources to sustain a few years of losses, or even if they do their shareholders don't have the patience for them either.

[Grey Fox]

The break-even price for US shale production is between $40-$115/barrel supposedly, so some of them will definitely survive this. Canadian tar sands are at $100/barrel though, so those are no longer viable at this price point. Countries like Venezuela, Iran or Russia are just caught in a perfect storm despite not even being the target of the price war between the Saudis and the Americans...

I heard that our existing tar sands projects need 72$ a barrel to break even.

[Barrister]

The break-even price for US shale production is between $40-$115/barrel supposedly, so some of them will definitely survive this. Canadian tar sands are at $100/barrel though, so those are no longer viable at this price point. Countries like Venezuela, Iran or Russia are just caught in a perfect storm despite not even being the target of the price war between the Saudis and the Americans...

I heard that our existing tar sands projects need 72$ a barrel to break even.

Depends on the project.  Remember they've been developing the oil sands since the 1970s when oil prices were substantially less than $70 bbl.

Now obviously with each newer project they tend to have higher and higher prices to break even, so sustained low prices could stall some newer projects or drive some of the newer operating projects out of business, but it's not like the entire town of Ft McMurray is going to disappear because of this.

[Zanza]

I was just going by the Financial Times graphic I posted above. I am sure there are different figures out there on where exactly the break-even is.

[Sheilbh]

Worth noting the SNP's plans for Scotland as well as apparently wildly overestimating the reserves were based on long-term oil prices of around $110.

[Barrister]

I did like the reference that Venezuals needed $160 bbl oil to break even.

[derspiess]

I did like the reference that Venezuals needed $160 bbl oil to break even.

Yep, and even at that point they'd still be a huge mess with even worse inflation and absolute scarcity of imported goods.

[Martinus]

Countries like Venezuela, Iran or Russia are just caught in a perfect storm despite not even being the target of the price war between the Saudis and the Americans...

Yes and no. I mean, would the US do exactly what they did so far in the price war if the primary victims weren't, by accident, such a nasty bunch? I wonder...

[Martinus]

Apparently, there is a rouble and Russian stock exchange rally after the government announced new rules for banks (which waive a number of bank reserve policies). I'm not an accountant but it seems to me the new rules effectively amount to breaking the termometer when you cannot get rid of fever. 

[Martinus]

Meanwhile, the Ukrainian President is visiting Poland today. He just gave a speech in front of the joint assembly of both chambers of the Polish Parliament, where he asked Poles to forgive past crimes of Ukrainians, extended an offer of a closer alliance and expressed the Ukraine's desire to eventually join the EU and the NATO, and end with the policy of neutrality.

[Zanza]

I did like the reference that Venezuals needed $160 bbl oil to break even.

It is almost certain that Venezuela will suffer a state default in March 2015 when they have to refinance major loans.

[Jacob]

Meanwhile, the Ukrainian President is visiting Poland today. He just gave a speech in front of the joint assembly of both chambers of the Polish Parliament, where he asked Poles to forgive past crimes of Ukrainians, extended an offer of a closer alliance and expressed the Ukraine's desire to eventually join the EU and the NATO, and end with the policy of neutrality.

... so... Ukraine is saying "fuck you Russia, we want to be friends with Europe, not you." Wonder how that's going to play out?

What's the state of Polish-Ukrainian relations? Does it have the usual Slavic mutual recriminations and feuding and claiming the other is an unjust oppressor??

[Barrister]

Meanwhile, the Ukrainian President is visiting Poland today. He just gave a speech in front of the joint assembly of both chambers of the Polish Parliament, where he asked Poles to forgive past crimes of Ukrainians, extended an offer of a closer alliance and expressed the Ukraine's desire to eventually join the EU and the NATO, and end with the policy of neutrality.

And when is POland going to apologize for the past crimes of Poles against Ukrainians?

[DGuller]

Meanwhile, the Ukrainian President is visiting Poland today. He just gave a speech in front of the joint assembly of both chambers of the Polish Parliament, where he asked Poles to forgive past crimes of Ukrainians, extended an offer of a closer alliance and expressed the Ukraine's desire to eventually join the EU and the NATO, and end with the policy of neutrality.

And when is POland going to apologize for the past crimes of Poles against Ukrainians?

When pro-Byelorussian secessionists rise up and occupy huge chunks of it.