Days of higher oil price gouging by OPEC cartel and other
oil exporting countries have come to an end. OPEC failed to agree on a unified
output cap, effectively letting its 13 members flood the globe with crude in an
effort to harm rivals. Most of OPEC's members, including Venezuela and
non-members like Russia, need higher oil prices to balance their national
budgets or they have to keep on pumping more.
The Saudi move to crush American shale operations via OPEC
is doing nothing but forcing a consolidation among the many shale fracking
companies in US and Canada. Low prices force the weaker companies to either
sell assets or go bankrupt, while stronger companies swoop in to gobble up
assets. In the meantime, these stronger hands cap wells and wait for the day
that prices rise and the development of newer technology and equipment.
It is also reducing the investment and development of oil
field all over the world. If you can get oil for almost free, then why spend
money exploring new fields. With present technology, oil field reserve and
global demand to reduce pollution, I do not see a bright future for oil
industry.
This is good time for oil importing countries to build their
oil reserve, build their foreign currency reserve and spend the oil saving to
develop new and creative source of energy like solar, energy storage etc.
Universities should start a new course that should help future engineers
develop alternative source of energy.
