Ok so now I get what you meant, just thought that you were likening oil to rails. Well, as for the failure of economies due to low oil/gas overall energy prices.... You yourself hit on the salient point. Oil is only trading at these levels because it was forced to. Therefore unnaturally blow. As in everything in existence, (scientifically speaking), it will move back to its natural state. And as you say neither you or I can say what the fair price of oil is. What we can say is that it is necessary for life to exist in this planet as we know it. It's the blood in our economic veins, literally. Energy is a must for civilization to persist as it is and advance. We won't develope an alternate meanes of providing energy without it. That fact alone make its value very high. It requires a significant amount of resources to retrieve it. No matter how efficient that process is becoming. Shale recovery break even costs are in the $50 range from $70 area. Canadian breakeven in the $70-$80 range. And so on. Those costs will never go to zero so it has to be priced above the lowest recovery cost as an absolute base. No matter what OPEC says or does, or Russia, or anyone else, oil prices will rise. Additionally, Saudi had to act in order to ensure it very existence, so too Iran, Iraq and all other OPEC and non OPEC members. The pump at will police was akin to shooting ones self in the foot. It's not a matter of US oil becoming resilient, because lots of those CO's are the very ones developing Mideast and Russian oil fields, and benefiting from a stable and higher priced market. After all it's no fun to have massive debt, huge political challenges and have to deal with factions blowing up your pipelines or kidnapping your workers. So it's prudent to make enough money to provide security and ensure profitability. So that's one clif note version of that aspect of it. Another very important consideration is the situation in Afghanistan a few years ago. Country totally destabilized, or in Kuwait in the 90's. Oil economies are very fragile and when threatened or actually destabilized, become a powder keg that threatens the entire world. So Saudi unable to pay its bills = overthrown royal family = massive instability in the Middle East, (a lot worse than what we see now), = Israel, US,Europe threatened = global political/economic conflicts....... Inknow that I took a lot of leaps to make my point but in a nut shell those are the real significant threats to the calliope of oil prices. There is nothing else to replace it, cannot be gotten for free, it's not endless. It's value has consequences for everyone. Just like food.
