us dollar, shale, oil etc1 Dec 2016 13:30
It is interesting to note that the US dollar against a basket of currencies is actually quite strong at the moment. Of course if this dropped oil would go up. The only way the US dollar does not drop is if the confidence in Trump's administration to unleash the American economy goes into overdrive - but then that would almost certainly increase demand on oil as well. OPEC clearly need a higher oil price (some members desperately) but they will also be wary of opening the door to shale again. Does OPEC have an oil price in mind that can facilitate the needs of its members and also keep shale of the table? If so what price? When can it be achieved and for how long? Or is there no price which accommodates this? Have the likes of Venezuela such desperate need that the price of oil would necessarily have to get into shale territory for them to recover? I suppose what I am saying is are we going into a cyclical system here - of shale going in and out of business?