Oil soars 6 percent as OPEC reaches deal to limit output in November

Yeah, it's a weird dynamic. For example, the higher the price of oil, the less dependent the US is on the rest of the world. Lots of oil in that $60-$80+ range in and around the US.

imagine all the countries that won't have oil money

that has so many implications

They've cheated before..

The benefits come from the market expectation of lower output, immediately gaining higher revenue.

It's hard to tell when electrification is going to kick into high gear. Projections for numbers of EVs sold ten years from now vary widely. I'll say that if oil did go back over $100/barrel that would provide an incredible tail wind for PHEV and BEV adoption in the US. Cars last 20+ years but buyers are oddly sensitive to recent pump prices.

Traditionally, oil prices had a long-term boom-bust cycle that lasted about 30 years...15 years of boom followed by 15 years of bust. This has been going on since the dawn of the oil industry, and is largely systemic: business cycles tend to be around 15 years, as in it takes about 10-15 years to go from discovery to production (gather data, drill exploration wells, drill production wells and production infrastructure). I'm not sure of any other industry with so long of a systemic business cycle.

Now, however, fracking has changed the game. So far, since "tight gas" is so new, we're able to use fracking in oil fields that have already been developed, to extract gas and oil from areas we knew it was at before, but thought it was too hard to extract (the term for where fracking is used--"tight" refers to the permeability of the rock...traditional oil comes from sources measured in the 10s of darcies...fracking is often employed in areas with <0.001 darcies, like shale rock). This means that production facilities, like pipelines and whatnot, are already in place. Furthermore, the discovery process is shortened, as these are already fields with known reserves, just in areas that we could not extract from efficiently before. Now, with fracking, we can. This means the investment cycle has been reduced from 10-15 years to 1-2 years.

With the old business cycle, new technology typically would be invented any time prices got high enough--generally following a business cycle where all of the "easy" oil has been found and extracted. New technology allows new fields to be produced "easily", causing a surplus of oil and a crash in oil prices. This continues until all the "easy" oil has been found, and the cycle continues. This cycle goes all the way back to the 1860s (whale blubber -> oil wells -> oil wells with pumps -> basic geology (drilling under hills) -> 2D seismic -> 3D seismic -> deep-sea/sub-salt -> fracking; pretty much follows a 20-30 year cycle). The concept of "peak oil" isn't new--people have been worried about peak oil since the mid-1800s.

Analysts aren't sure if the new reality we're in has fundamentally changed the markets. I say it hasn't--the cycles will return after all of this new "easy" oil, in the form of shale gas/tight gas, has been exploited. But we're only somewhere about 2-5 years into a 15-year bust cycle, if you ask me. I would expect prices to hover in the $40-$50 range for the remainder of this bust cycle, with a few rare exceptions (wars, disasters, etc). After that, I think you'll see prices return to the $100+ level (in 2016 terms--since the 1860s, prices have cycled pretty consistently between $10 and $100 for a barrel of oil, in 2016 terms) until the next technological revolution in oil exploration and production occurs. But it does mean less volatility in prices as business cycles shorten--at least for the remainder of this bust cycle. Maybe peak oil will become a reality right as demand for oil drops, making the next round of technology advances unnecessary.

"Tight oil companies outspend cash flow by an average of 120%: spend $2.20 for every dollar earned from operating activities." "Tight oil company debt-to-cash from operating activities ratio averages 3.3: would take more than 3 years to pay down debt if all cash flow was used."

Please see: http://www.artberman.com/wp-content/uploads/The-Shale-Revolu...

Meanwhile: http://fortune.com/2015/12/10/oil-zombies-debt/

One thing to consider ( although it's pretty different ) - the 1980s oil crash was in around 1983; the S&L bailout (FIRREA) was in 1989. Six years' latency.