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re: is the price per barrel of oil dropping a bad thing?
Posted on 12/17/14 at 2:04 pm to Powerman
Posted on 12/17/14 at 2:04 pm to Powerman
Most of the majors seemed to be scaling back on upstream activities last year. But most of their income does come from the upstream so imagine their income will be cut in half regardless of the diversity.
ETA: another benefit for the majors is that they'll be scooping up leases on the cheap from the smaller players who've over extended on financing.
ETA: another benefit for the majors is that they'll be scooping up leases on the cheap from the smaller players who've over extended on financing.
This post was edited on 12/17/14 at 2:06 pm
0
Posted on 12/17/14 at 2:50 pm to Powerman
quote:
Most of the majors are diversified in upstream and downstream investments. I don't know that it would be a wash for them but I'd have to think they'll at least tread water for now.
Certainly not a wash, but the increased profitability of downstream operations definitely cushions the blow for most majors (minus COP).
Posted on 12/17/14 at 2:55 pm to NOFOX
That and certain spots in each shale are actually fairly cheap.
Posted on 12/17/14 at 5:22 pm to Brettesaurus Rex
quote:
Good for individuals, bad for the oil and gas industry.
Bingo we have a winner..
Posted on 12/17/14 at 8:34 pm to Double Oh
I am in Sales for OIL & Gas Logistical Service Company. Today within 10 mins I got e-mails from Schlumberger, Halliburton and Oceaneering asking us to reduce our prices because of the current economic environment. So yeah I don't think its good for ECONOMY in South Louisiana
Posted on 12/17/14 at 9:05 pm to Gorilla Ball
It's bad for anybody with land in the Tuscaloosa Marine Shale 
Posted on 12/18/14 at 8:43 am to oR33Do
quote:
How is more money in your pocket a bad thing?
If consumers use the money saved on gas to buy "things", then it is very good. If consumers use the money to pay down debt or save it, then it is deflationary. So we all need to do our duty and buy, buy, buy. I'm doing my part.
Posted on 12/18/14 at 5:22 pm to Blakely Bimbo
quote:
If consumers use the money saved on gas to buy "things", then it is very good. If consumers use the money to pay down debt or save it, then it is deflationary. So we all need to do our duty and buy, buy, buy. I'm doing my part.
I'm getting new golf clubs, gym equipment and a few things to keep my g/f happy shipped over in my company supplied container. I won't be living in the US, paying US taxes so the general topic is irrelevant to me.
However, yellowfin is spot on. I'd wager 50% or more of the people employed in the areas where massive layoffs are already scheduled are residents of Louisiana.
While most of the US will benefit from reduced consumer costs, Louisiana will have the same consumer costs but an inflated unemployment percentage.
IMO this is a minimum 2 year setback for the local economy.
Posted on 12/18/14 at 6:07 pm to geauxtigers003
quote:
Schlumberger, Halliburton and Oceaneering asking us to reduce our prices
Try using that line in the grocery stores.
My and my customers markets will benefit from lower freight cost on goods that have been quoted for 2015 4 months ago.
Posted on 12/18/14 at 8:17 pm to cuyahoga tiger
Definitely bad for LA overall due to layoffs and loss of production. Probably good for the country but, frick that, give me the better local conditions.
Side note, was on personal car allowance for last 5 years no gas card and just switched to company + gas card, and kaboom gas is now half the price.
Side note, was on personal car allowance for last 5 years no gas card and just switched to company + gas card, and kaboom gas is now half the price.
Posted on 12/18/14 at 9:01 pm to Gorilla Ball
No, it means the transfer of wealth from the USA to the Middle East via increased fuel prices over the last 8 years is ending. fricking ragheads.
Posted on 12/18/14 at 9:10 pm to Rhino5
Im sorry but that is just flat wrong. These low prices will hurt US companies and industry workers more than it will OPEC member nations in the Middle East.
Posted on 12/18/14 at 9:26 pm to lsugradman
quote:
In 2013, about 33% of the petroleum consumed by the United States was imported from foreign countries.
EIA
Of that portion of imported oil only 20% was from Persian Gulf countries. That amounts for a whopping 6.6% of the petroleum products consumed by Americans coming from the "Middle East". Most of the oil and gas that we consume comes from the US and Canada. These low oil prices are helping the consumer but the money we aren't spending at the pump is affecting the domestic industry/worker more.
And the drop in price will discourage domestic drilling and production operations more so than those operations in the Middle East (our lifting costs and therefore breakeven point are much higher than those countries). Lower domestic production = more oil imported (see the early 2000s) and more money going to those foreign sources.
To sum it up, low oil prices will hurt the US industry and US energy independence more than it will hurt Saudi Arabia.
Posted on 12/18/14 at 10:26 pm to lsugradman
quote:
To sum it up, low oil prices will hurt the US industry and US energy independence more than it will hurt Saudi Arabia.
Unless you look at the end game, which says that we keep our oil in the ground for future use, while Arabia uses their's up first.
Which is a great thing.
Posted on 12/18/14 at 10:32 pm to Stingray
Well now you are talking about impacts beyond our lifetime honestly. And the Saudis have done considerably less "frontier or unconventional exploration" within their borders than we have so they really only have scratched the surface of their reserve potential. Mainly because their conventional reservoirs are so badass and right under their feet.
I think the general question was is the price of oil dropping a bad thing for us now (ie within the next few years)
I think the general question was is the price of oil dropping a bad thing for us now (ie within the next few years)
Posted on 12/18/14 at 11:09 pm to Gorilla Ball
Certainly bad for this State, which gets most of it's revenue from oil.
Posted on 12/19/14 at 12:42 am to RogerTheShrubber
Absolutely.
I just want to add that those who want cheap oil/gas AND energy independence are kidding themselves. One of the main reasons we have gone from importing 2/3s of our petroleum to 1/3 imports in a matter of years is because the high price of oil has made previously challenged plays now economic to develop. Sure you can point to HZ drilling and frac technology but those techniques have been going on for ages. Its only been recently with oil over $100 that we have had the leverage to perfect that technology and employ it in previously marginal or uneconomic plays.
I just want to add that those who want cheap oil/gas AND energy independence are kidding themselves. One of the main reasons we have gone from importing 2/3s of our petroleum to 1/3 imports in a matter of years is because the high price of oil has made previously challenged plays now economic to develop. Sure you can point to HZ drilling and frac technology but those techniques have been going on for ages. Its only been recently with oil over $100 that we have had the leverage to perfect that technology and employ it in previously marginal or uneconomic plays.
Posted on 12/19/14 at 7:09 am to lsugradman
It hurts US Oil and Gas companies but improves every other company since fuel prices are lower. Who are you looking out for exactly? Big Oil? Your logic is saying "Big banks will hurt more since interest rates are low." Well no shite, but it helps the consumer and other companies.
Posted on 12/19/14 at 8:25 am to lsugradman
quote:
Of that portion of imported oil only 20% was from Persian Gulf countries. That amounts for a whopping 6.6% of the petroleum products consumed by Americans coming from the "Middle East".
Regardless,
The price per barrel of US oil has tanked.
Posted on 12/19/14 at 8:27 am to Gorilla Ball
good for most people, bad for oil producing states' budgets, bad for higher-ed in Louisiana, bad for oil field workers, good for plant workers, good for plants and refiners, good for ag, good for transportation.
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