Future Fracking Will Keep Oil Prices Down
Artificial oil shortages may be engineered to drive up the cost of oil per barrel yet thee natural trend for the cost of oil per barrel the next decade would be for it to remain low and even drop further-perhaps to $20 per barrel.
Every old oil field in the world that has been used up may evidently be fracked for renewed production. That means the potential for a lot of new oil to be added to the market the next decade exists. Russia's oil fields as well as those of the Middle East and Iran that are running down may be made over with fracking. Russia is suffering from the low cost of oil per barrel as is Alaska however unlike Alaska, Russia may be able to compensate for the decreased return on its oil exports with increased exports of manufactured products to nations such as Iran and elsewhere (Nigeria) with new cash from fracking old oil fields. The Obama initiative to liberate the Iranian economy and put their nuclear production on a slow, deep well-founded footing allows Europeans, Russians and anyone besides Americans swiftly invest in restoration of Iran's depleted former Anglo oilfield assets. Their new cash may go in part to purchases from Russia.
Mexico's Pemex is also likely to jump onto the global fracking bandwagon that is just at the start of the ascent. Sales of oil to Japan and China, India and Brazil from poorer nations even at a low, low price is better than no cash income at all. Conspiring with the world's Big Oil corporations or OPEC to keep oil prices steady even at $40 per barrel is unlikely; second and third world country oil producers and independents will sell their product for whatever they can get. Like illegal alien laborers in the United States that work for $2 an hour when the average wage is $18, the effectiveness of real cash income better than they have probably will continue to drive down the price of oil per barrel to a flat-Earth value paradigm, as Thomas Friedman might say.
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