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re: Oil Wars: Why OPEC Will Win
Posted on 12/15/14 at 9:03 am to I Love Bama
Posted on 12/15/14 at 9:03 am to I Love Bama
quote:
Market Share. Making their money in volume rather than the spread.
I understand that, but why not just throttle production back enough to keep the prices high. Their main goal is to hurt the US producer but I don't see it working. I think it will backfire on them.
2
Posted on 12/15/14 at 9:05 am to offshoretrash
quote:
why not just throttle production back enough to keep the prices high.
This keeps the competition in business.
quote:
Their main goal is to hurt the US producer but I don't see it working.
it already is. Not really debatable at this point.
Posted on 12/15/14 at 9:06 am to lsugradman
quote:
Dude im sorry you dont know what you are talking about.
quote:
They want market share by reducing the competition.
Did you respond to the right person?
Posted on 12/15/14 at 9:07 am to Thib-a-doe Tiger
quote:
The shale producers have a lower break-even point than OPEC countries though. OPEC gets stomped in a price war
Negatory. It's the opposite.
Posted on 12/15/14 at 9:09 am to bayoubengals88
quote:
Cutting back on social spending courts civil unrest and cutting back on oil production cuts spending, so they have a disincentive to cut oil production.
Anyone have any more solid info on exactly how big a deal this actually is in OPEC countries?
Posted on 12/15/14 at 9:09 am to offshoretrash
quote:
Their main goal is to hurt the US producer
Only partially correct. You are forgetting Iran, Russia, and Iraq.
quote:
but I don't see it working
Then you are very naive or not being honest with yourself.
Posted on 12/15/14 at 9:10 am to lsugradman
Yes they do. Saudi makes money from oil. Oil funds all of their countries workings. All the money they spend, it cannot continue below $60-$68. It's true their lift costs are about $7, but that is meaningless when you know the entire story.
Saudi is the player here. Not OPEC.
Saudi has more reasons than the US Shale plays.
ISIS was also hurting Saudi. Saudi has effectively cut ISIS's ability to produce/refine their black market oil.
It will hurt some US shale plays, but the big boys will be in better position after all this is over. Should be no longer than a year.
Saudi is the player here. Not OPEC.
Saudi has more reasons than the US Shale plays.
ISIS was also hurting Saudi. Saudi has effectively cut ISIS's ability to produce/refine their black market oil.
It will hurt some US shale plays, but the big boys will be in better position after all this is over. Should be no longer than a year.
Posted on 12/15/14 at 9:11 am to bayoubengals88
I think the following is a better article with interesting analysis of Exxon's 2015 Energy outlook:
LINK
quote:
Exxon has issued its new Outlook (which is well worth a look). One of the interesting features of this report is its view of conventional oil production, comprising traditional onshore and offshore / deepwater production. In Exxon's view, conventional production peaked around 2005 and is not projected to revisit this level until, at best, around 2040. This is not particularly controversial, but it is interesting to see Exxon acknowledge it. And it's important for our understanding of the long term outlook for the oil supply and oil prices, which I consider in greater detail below.
quote:
Therefore, based on recent shale performance, a longer term price of $85-100 / barrel on a Brent basis would seem justified. This in turn suggests Exxon is being too optimistic about oil sands, deepwater, and conventional ex-OPEC supply. With lower oil prices, demand growth is likely to be somewhat higher than the company is projecting, with shales taking share from more traditional sources. The majors may find the sledding more difficult than Exxon implies.
For the next year, however, expect carnage on the supply side if oil prices remain at current levels for another hundred days. By late 2015, expect a price spike as too many operators will have headed for the exits too fast. Other than shales, as Exxon points out, the conventional supply continues to struggle. Finding conventional oil remains 'no cheaper, no easier', and that has not changed in the last year. If the deceleration in shale production is as severe as the EIA predicts, the global economy will be seriously short on the supply side by this time next year.
LINK
Posted on 12/15/14 at 9:13 am to JayDeerTay84
quote:
Did you respond to the right person?
Sorry i was responding to the poster who said Saudis cost per barrell were higher than ours.
Posted on 12/15/14 at 9:14 am to JayDeerTay84
quote:
ISIS was also hurting Saudi.
Non-player, non-issue.
Posted on 12/15/14 at 9:14 am to 90proofprofessional
quote:
Anyone have any more solid info on exactly how big a deal this actually is in OPEC countries?
I don't have a link or article to give you, but in dealing in the Middle East and mostly Saudi Arabia, I can tell you that funding their social programs is not a big deal, it is THE big deal. The royal family has to make sure these stay funded (they are actually still expanding) for fear of the masses becoming unhappy and some sort of regime/government change.
Posted on 12/15/14 at 9:15 am to lsugradman
quote:
They might WANT oil at $60 a barrel but they sure as hell dont need it there.
They don't want it to stay there; they can't afford it more than a year.
Posted on 12/15/14 at 9:15 am to cwill
To OPEC, yes. They were/are an issue.
Posted on 12/15/14 at 9:16 am to lsugradman
quote:
It's true their lift costs are about $7, but that is meaningless when you know the entire story.
Its not meaningless. If their costs werent so low they would not be engaging in this current price war. They have a huge cash reserve and can easily deal with these lower prices. For a finite amount of time though.
This post was edited on 12/15/14 at 9:18 am
Posted on 12/15/14 at 9:16 am to JayDeerTay84
quote:
To OPEC, yes. They were/are an issue.
They don't control enough or supply enough...further the oil they sell doesn't go into the international commercial markets. It goes into very regional black markets. This idea that ISIS has anything to do with the current price collapse is laughable on its face.
Posted on 12/15/14 at 9:17 am to lsugradman
Only for about a year.
So yea, quoting a low lift price is meaningless because the true costs is tied into their social spending which cannot stop.
So yea, quoting a low lift price is meaningless because the true costs is tied into their social spending which cannot stop.
Posted on 12/15/14 at 9:18 am to cwill
Then laugh, but you don't know what you are talking about.
Also, I didn't say it was THE reason but a reason. There are many.
Also, I didn't say it was THE reason but a reason. There are many.
This post was edited on 12/15/14 at 9:21 am
Posted on 12/15/14 at 9:24 am to JayDeerTay84
quote:
Then laugh, but you don't know what you are talking about.
ISIS may be moving 20kbbld. They lack the technical ability to keep the production on so that production curve is probably tanking pretty hard. So 20kbbld and falling...that is a tiny drop in the bucket of world production and prices at $60 still won't undercut their estimated $20/bbl they sell it for. ISIS just seems to be the favorite bogey-man these days so they seem to get glommed onto every ME issue. They're not the reason or a reason for the current price crunch.
Posted on 12/15/14 at 9:31 am to Thib-a-doe Tiger
quote:
The shale producers have a lower break-even point than OPEC countries though. OPEC gets stomped in a price war
Yea this could not be more false
Posted on 12/15/14 at 9:38 am to Thib-a-doe Tiger
Off topic- but why don't you like VTSMX? Which vanguard fund would you throw in a Roth?
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