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Started By
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Crude watch: What's going on?
Posted on 10/9/14 at 11:43 am
Posted on 10/9/14 at 11:43 am
Crude prices (WTI and Brent) have dropped off fairly dramatically in the last quarter. I thought the Russian sanctions and ISIS issues would prop up the speculation in the market, but prices have still tanked.
At a certain point, domestic drillers will shut down due to economics. What's going on with the oversupply?
At a certain point, domestic drillers will shut down due to economics. What's going on with the oversupply?
12
Posted on 10/9/14 at 11:46 am to TulaneUVA
I have no idea, but gas is down to $3.19 a gallon here, which is the cheapest it has been in years, no exaggeration.
frick that. There isn't an oversupply as far as I am concerned.
quote:
At a certain point, domestic drillers will shut down due to economics
frick that. There isn't an oversupply as far as I am concerned.
Posted on 10/9/14 at 12:06 pm to TulaneUVA
quote:
What's going on with the oversupply?
Its the dollar, its drives oil a lot more then people think. The dollar gets stronger and stronger and our oil gets more and more expensive for other countries.
Posted on 10/9/14 at 12:27 pm to TulaneUVA
I think oil is heading out of the bubble it's been in for the majority of the last 10 years. The long term for oil isn't great either. These government regulations on mpg and the great quest to become less oil dependent were going to have an effect. Meanwhile more areas are drilling than ever and people are realizing we are not and have never been close to running out of oil.
Posted on 10/9/14 at 12:52 pm to beaverfever
quote:
we are not and have never been close to running out of oil.
yep. At $100 you can justify a whole heck of a lot of projects become profitable. I think it sinks to $60 in the next few years. I thought we would have dropped last year but Libya and some disruptions in Nigeria kept it propped up. If Iraq keeps having troubles that will be what keeps it from dropping much further. But if tensions ease, look out below.
Posted on 10/9/14 at 1:04 pm to C
Everything I have read and everyone I have spoken with whom I believe say $70 is the magic # to make money for US companies.
I expect the crude price to hover around $100 long term, especially since (from what I recall) the Saudi's and OPEC has openly stated that $100 is a good price to maintain.
I expect the crude price to hover around $100 long term, especially since (from what I recall) the Saudi's and OPEC has openly stated that $100 is a good price to maintain.
Posted on 10/9/14 at 1:09 pm to eng08
quote:
the Saudi's
$100 to them isn't the same as $100 to US. It costs them a lot more to get it out of the ground and refine.
Posted on 10/9/14 at 1:10 pm to TigerFanatic99
Out and about in Frisco, TX this morning I noted several stations with $2.99 a gallon for regular.
Posted on 10/9/14 at 1:11 pm to htownjeep
Which is exactly why they like the $100 # since it's profitable.
Russia needs over $100 from what I understand as well.
Russia needs over $100 from what I understand as well.
Posted on 10/9/14 at 1:44 pm to eng08
I don't buy this "nobody makes money at less than 100" crap. Adjusted for inflation oil at 100 dollars is still ridiculously high. So nobody has made money selling oil until the last 5 years or so???
Posted on 10/9/14 at 1:49 pm to beaverfever
That's not what I meant, I think you are misunderstanding.
For example in west Texas it's costing like $70 to get a barrel out of the ground to market, so if the price is over 70, they are happy.
However in Russia- say Siberia - it costs like $105 to get oil out of the ground and to market, so pricing above that they are very happy.
For example in west Texas it's costing like $70 to get a barrel out of the ground to market, so if the price is over 70, they are happy.
However in Russia- say Siberia - it costs like $105 to get oil out of the ground and to market, so pricing above that they are very happy.
Posted on 10/9/14 at 1:50 pm to beaverfever
quote:
"nobody makes money at less than 100
Who said that?
Posted on 10/9/14 at 2:01 pm to TulaneUVA
quote:
I thought the Russian sanctions and ISIS issues would prop up the speculation in the market, but prices have still tanked.
US shale oil and a USD increase in value of roughly 7-8% are the main reasons. Russia and the Middle East have shrunk as a % of total oil produced so they aren't as big of a catalyst as 5 to 8 years ago.
Posted on 10/9/14 at 2:03 pm to beaverfever
quote:
So nobody has made money selling oil until the last 5 years or so???
Every project has a price point that it is profitable at. For example, the Tuscaloosa shale in LA/MS, which we've known about for decades, has recently seen some activity in trying to produce the oil since the price has been so high. Even at $100+ a bbl, they still aren't making profits there yet. If oil was $200 a barrel, you would see a lot more activity.
Posted on 10/9/14 at 2:52 pm to TheIndulger
Could the drop in oil be related to conflicts that countries are having with Russia and Middle East?
Posted on 10/9/14 at 4:04 pm to htownjeep
quote:
the Saudi's
$100 to them isn't the same as $100 to US. It costs them a lot more to get it out of the ground and refine.
That's just flat wrong. Saudi has very very cheap production. I doubt it costs them $10/barrel. It was about $3 in '99.
They want $100 to justify their countries lavish budget.
This post was edited on 10/9/14 at 4:05 pm
Posted on 10/9/14 at 4:08 pm to C
I also don't believe the $70 mark in the Permian. I thinks it's lower than that. Around $50
Posted on 10/9/14 at 4:15 pm to b-rab2
Couldn't Permian vary a lot? don't you have unconventional shale there, plus mature fields with CO2 flooding? I imagine they both have different break even points.
Posted on 10/9/14 at 4:49 pm to b-rab2
Yeah conventional in the U.S. is probably $30 or so. Maybe a bit less. Oil sands is up around $70.
Posted on 10/10/14 at 1:53 am to TheIndulger
quote:
Every project has a price point that it is profitable at. For example, the Tuscaloosa shale in LA/MS, which we've known about for decades, has recently seen some activity in trying to produce the oil since the price has been so high. Even at $100+ a bbl, they still aren't making profits there yet. If oil was $200 a barrel, you would see a lot more activity.
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