The precipitous decline of oil prices in the past six months worldwide is a tectonic shift in the energy market. The principal reasons for the decline are the glut of high-quality crude oil supply and demand which is not keeping up with supply. The supply is increasing because of the new technologies being applied to the extraction of oil from shale beds. All crude oil is held in shales which are a product of ancient seabeds and marine organisms. Over gological time some oil under pressure is excreted from the shale matrix and pools upward in more accessible loci, usually under impervious domes such as salt domes. From these accumulations past drilling has been able to extract the oil fairly easily. Now technology has advanced such that in shales not having readily accessbile oil, a combination of water and sand and some chemicals forced into the beds creates fractures which allow the oil to be released, follow the fracture lines and accumulate near the proximate start of the fractures. The sand holds the fractures open for the seepage. This process is relatively inexpensive for each well. Exacerbating the problem is the political maneuvering within he OPEC cartel as it disintegrates. The change in prices has extraordinary implications for the world economy of the future but immediate and in general beneficial implications for blue water and brow water shipping although some sectors of the industry will be hurt.
... Read more and watch the video after the break