Originally Posted by KC native
Just because it can be recovered, doesn't make it cheap. But carry on, acting like extracting oil at a loss will lower oil prices is brilliant.
I think you have fully missed my point. Crude oil is a global market with a multitude of variables acting on it. I used the natural gas market to demonstrate that a regional commodity, removing a number of variables that come into play in a global commodity market, demonstrates that increased product has, in fact, yielded a lower price and that the domestic energy commodity market does work.
Most companies are doing project valuations based on roughly $70 crude so they still have a ways to go before hitting bottom. Sure, there may be those going at $75 but not many going in for the projects based on $90 oil. They got flexed out.
Generally the cure for low prices is low prices and the cure for high prices is high prices. The system, when left to operate, usually works.