Market Outlook as at December 22, 2014 - Our FBMKLCI rebounded very well today. At the time of writing (4:40pm), the index is up 29 points at 1745. The question on everyone's mind is whether this ...
15 hours ago
|Source: Wall Street Journal|
Locations of Oil Shales
Oil shale is found in many parts of the world, as the map above shows, but too bad, Malaysia isn't one place where oil shale could be found.
The figures from 1- 9 show where the oil shale are found in abundance, with the USA being the number 1 having the most recoverable reserves.
OPEC vs Oil Shale Producers
OPEC and the oil shale producers have one common goal : to extract out the oil and make lots of money. However, if both were to extract in large amounts, an oversupply situation will happen and lead to low international oil prices.
OPEC will probably do nothing now to arrest the sliding oil prices - as lower international oil prices will kill off the oil shale producers FIRST because the oil shale extraction costs are much higher than most of OPEC & other crude oil producers countries costs (diagram below shows).
Note: NAm Shale in the diagram above is North America oil shale, costs $65/barrel to extract out.
Impact on O&G stocks on Bursa Malaysia
Expect an adverse impact on these O&G stocks share prices to continue as long as oil prices continue sliding towards $65/oil shale producers cost. Nobody knows for sure where the bottom is, too early to tell, perhaps when everyone have SOLD and give up. All of these O&G stocks are trading way below their 200 day MA and 50 day MA.