What’s going on with oil markets?
Tuesday, July 28, 2015
American financial services corporation Morgan Stanley expects that oil prices could be worse than during the price crash of 1986, Bloomberg reports. However, for now, prices are still expected to improve after the past year of falling prices.
Demand for oil has risen, the number of rigs worldwide has fallen and stock prices for oil are still low, but the oil supply hasn’t dropped. American drillers have cut back on production. OPEC countries haven’t.
If sanctions against Iran dissolve and if the turmoil in Libya is resolved, OPEC oil production may continue to increase, causing the oil glut to continue for several more years.
Via: Bloomberg > Oil Warning: Crash Could Be Worst in More Than 45 Years
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.