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Message
re: Oil field layoffs are really hitting SLa
Posted on 9/26/15 at 2:22 pm to kywildcatfanone
Posted on 9/26/15 at 2:22 pm to kywildcatfanone
quote:
Your response, "OK obama". I guess the idea of personal responsibility is beyond your grasp.
It was a joke regarding the income level that Obama used in his first campaign to energize his base. Sorry to rustle your jimmies.
I agree with your basic premise of personal responsibility
(Technically Obama's mythical # was $250k. Everyone over that threshold was evil/ greedy and should subsidize his social agenda )
This post was edited on 9/26/15 at 2:25 pm
1
Posted on 9/26/15 at 2:22 pm to GoldenD
I'm thinking longer term, not right now.
But like jenny said earlier the Saudis are playing chicken right now, but what if we started exporting again how would that affect their strategy? And others
But like jenny said earlier the Saudis are playing chicken right now, but what if we started exporting again how would that affect their strategy? And others
This post was edited on 9/26/15 at 2:24 pm
Posted on 9/26/15 at 2:30 pm to jennyjones
quote:
It was a joke regarding the income level that Obama used in his first campaign to energize his base. Sorry to rustle your jimmies.
I agree with your basic premise of personal responsibility
(Technically Obama's mythical # was $250k. Everyone over that threshold was evil/ greedy and should subsidize his social agenda
Sorry, didn't catch the sarcasm.
quote:
I agree with your basic premise of personal responsibility
I deny myself some things I would like so that I can be prepared for issues that might come my way, but I see very few people behaving in a similar fashion. And yeah, your economic situation is mostly in your control when you have income, it's all in how you use it.
Posted on 9/26/15 at 2:47 pm to Taurus
The Saudis have hundreds of billions of dollars stowed away, so they can afford some short-term pain in exchange for long-term market share. Lifting the export ban be great for US industry, but would only have a small impact on prices, if any.
Posted on 9/26/15 at 3:30 pm to mattz1122
The prices dropped a year ago, at what point is this no longer "short term?" If they have such a large reserve, why are they beginning to issue bonds to fund their government? If you don't think SA is starting to sweat at these current prices then you're crazy.
Posted on 9/26/15 at 3:39 pm to GoldenD
Then why don't they just cut production?
This post was edited on 9/26/15 at 3:40 pm
Posted on 9/26/15 at 4:03 pm to mattz1122
I came into this thread late but SA can't cut production because their current production funds nearly all aspects of their government correct?
They are hurting right now and cutting production will only make it worse.
They are hurting right now and cutting production will only make it worse.
Posted on 9/26/15 at 4:26 pm to cave canem
quote:
Oil field layoffs are really hitting SLa quote: As long as property values don't go down in my area, it has zero effect on me. If you live anywhere in the gulf south this is looming on the horizon. The high crude prices and employment boom insulated the region from the worst of the financial crises fallout. But it is going to hit twice as hard in some areas now. All the small town bankers that thought they were geniuses lending to can't miss projects are about to take a haircut. Couple that with a lots of housing inventory hitting the market at once due to defaults and and it is a recipe for disaster. Anyone who lives in the gulf south is going to be effected, even medical care pro's are going to feel the sting. Lots of folks loosing insurance and avoiding unessential visits, Ace hardware is going to sell less, etc. No one is going to escape the loss of billions of GDP in the poorest region of the country. Keep whistling past the graveyard about the 20 bucks you saved in gas this week.
Good thing I don't live on the gulf coast.
I do feel bad for friends and family having to deal with this.
This post was edited on 9/26/15 at 4:28 pm
Posted on 9/26/15 at 4:26 pm to bayoutiger225
quote:
A can't cut production because their current production funds nearly all aspects of their government correct?
They are hurting right now and cutting production will only make it worse.
This
If they cut production, the price would rise, we'd fill the "shortage" and all of this was for naught. The current price drop is our surge in production and SA choosing to stand their ground on their market share. Why should they cut production to prop up the price?
Posted on 9/26/15 at 4:27 pm to GoldenD
my younger brother has 7 rigs working so he is ok
Posted on 9/26/15 at 4:28 pm to mattz1122
Them cutting production to make more money isn't quite that simple. Sure prices will go up, but the amount of crude they sell will go down. It's almost a zero sum game.
Posted on 9/26/15 at 4:32 pm to GoldenD
They shouldn't. But other OPEC members like Venezuela and Algeria are pleading for a cut.
The fact that the country is entirely dependent on oil is the reason for it to endure the short-term pain to regain market share. The smaller and mid-sized US producers filing for bankruptcy are hurt far worse.
The fact that the country is entirely dependent on oil is the reason for it to endure the short-term pain to regain market share. The smaller and mid-sized US producers filing for bankruptcy are hurt far worse.
This post was edited on 9/26/15 at 4:33 pm
Posted on 9/26/15 at 4:36 pm to mattz1122
Even if they agree to a cut, it if is before the smaller US companies start biting the dust, then I think they'll make up for a chunk of whatever OPEC cuts. The US companies fighting to stay in business are pumping just to have cash flowing to pay debt even if they're losing money. Any price increase would just create incentive to continue doing the same, or actually bring them back to the black.
Posted on 9/26/15 at 4:36 pm to GoldenD
Are we seeing a shift in this game? Meaning taking power away from the Saudis and the U.S. getting more. Is the U.S. gambling too or is this good strategy long term?
And what is Russia's role in all this? Who are they helping more, U.S. or Saudis, with their cont'd production output?
I'm trying to understand the game that is being played here.
And what is Russia's role in all this? Who are they helping more, U.S. or Saudis, with their cont'd production output?
I'm trying to understand the game that is being played here.
Posted on 9/26/15 at 4:43 pm to Taurus
Yes, we are now capable of producing almost as much as they are on a daily basis. SA, the US, and Russia are the top three producers in the world at 9-10 million bbl/day.
It's hard to say the US is gambling because the US doesn't have state run oil companies. We have a bunch of private corporations that drill for oil here, rather than companies such as Saudi Aramco so the US doesn't really make these decisions to produce at these rates, the economics of the companies do. As a country, our economy is much more diversified and gives us a lot of power due to no longer being dependent on foreign oil.
Russia is treading water. Their economy functions primarily on oil revenue so they're pumping as much as possible to fund their budgets, much like SA. They aren't trying to help anyone but themselves really.
tldr: SA is playing chicken with the smaller producers in the US to see who can last longer at these current prices. i.e. Will the small US companies go bankrupt, or will the SA have to start taking on debt to fund the social programs and Royal family. SA really doesn't have any other play but to try and put these companies out of business.
It's hard to say the US is gambling because the US doesn't have state run oil companies. We have a bunch of private corporations that drill for oil here, rather than companies such as Saudi Aramco so the US doesn't really make these decisions to produce at these rates, the economics of the companies do. As a country, our economy is much more diversified and gives us a lot of power due to no longer being dependent on foreign oil.
Russia is treading water. Their economy functions primarily on oil revenue so they're pumping as much as possible to fund their budgets, much like SA. They aren't trying to help anyone but themselves really.
tldr: SA is playing chicken with the smaller producers in the US to see who can last longer at these current prices. i.e. Will the small US companies go bankrupt, or will the SA have to start taking on debt to fund the social programs and Royal family. SA really doesn't have any other play but to try and put these companies out of business.
This post was edited on 9/26/15 at 4:46 pm
Posted on 9/26/15 at 4:44 pm to GoldenD
Several companies have already filed for Chapter 11: Quicksilver, Samson, Sabine, American Eagle, etc.
And U.S. production is reflecting that with declines expected well into 2016. U.S. shale has been falling since spring. It's working for the Saudis...
And then throw in weak demand growth from China and India and you have a perfect storm.
And U.S. production is reflecting that with declines expected well into 2016. U.S. shale has been falling since spring. It's working for the Saudis...
And then throw in weak demand growth from China and India and you have a perfect storm.
This post was edited on 9/26/15 at 4:47 pm
Posted on 9/26/15 at 4:49 pm to mattz1122
How much do these companies currently produce per day?
The US production is going to eventually drop significantly since new wells aren't being drilled and subsequently completed. The ones that have been recently are the most efficient wells these companies have, but eventually this comes to an end. The real problem will be is when these companies do fall, the lack of current investment/drilling will leave us in a bind and there won't be a surplus. So i expect the prices to fly up in a few years once this has a ripple effect.
Correct, high supply+low demand = falling prices.
The US production is going to eventually drop significantly since new wells aren't being drilled and subsequently completed. The ones that have been recently are the most efficient wells these companies have, but eventually this comes to an end. The real problem will be is when these companies do fall, the lack of current investment/drilling will leave us in a bind and there won't be a surplus. So i expect the prices to fly up in a few years once this has a ripple effect.
Correct, high supply+low demand = falling prices.
Posted on 9/26/15 at 4:52 pm to GoldenD
I'm wondering if the US companies have strategically produced this much and why if they did?
I do see pressure is being applied to Obama to allow oil exports, so what I'm asking is this a long term strategy for US oil companies to be stronger? My answer is yeah, duh.
However, Obama is set to issue more regulations on O&G before he leaves and still doesn't seem ready to lift the oil export ban.
So what is the strategy here of the US oil companies?
I do see pressure is being applied to Obama to allow oil exports, so what I'm asking is this a long term strategy for US oil companies to be stronger? My answer is yeah, duh.
However, Obama is set to issue more regulations on O&G before he leaves and still doesn't seem ready to lift the oil export ban.
So what is the strategy here of the US oil companies?
Posted on 9/26/15 at 4:55 pm to GoldenD
Yeah, the real pain is coming from the budget cuts that resulted in rigs being laid down, wells not being drilled, and people being laid off. So many U.S. independents reported net losses during the second quarter.
The issue is going to be reaquiring those skilled workers they laid off who've left for different industries, finding new rig contracts after several older ones have been scrapped due to lack of interest, and then ramping up production all over again. That could take years.
The issue is going to be reaquiring those skilled workers they laid off who've left for different industries, finding new rig contracts after several older ones have been scrapped due to lack of interest, and then ramping up production all over again. That could take years.
Posted on 9/26/15 at 5:02 pm to mattz1122
quote:
I'm wondering if the US companies have strategically produced this much and why if they did?
The price was high so they produced as much as they could to maximize profits, "drill baby drill." In the end it will bite many of the small companies in the arse.
quote:
Yeah, the real pain is coming from the budget cuts that resulted in rigs being laid down, wells not being drilled, and people being laid off. So many U.S. independents reported net losses during the second quarter.
The issue is going to be reaquiring those skilled workers they laid off who've left for different industries, finding new rig contracts after several older ones have been scrapped due to lack of interest, and then ramping up production all over again. That could take years.
Yep, as the prices fell, drilling slowed, production reduction typically lags, then more drilling rigs were stacked, production falls some more. Since there is typically a lag, I think these companies will be sitting on their hands when the global supply=demand and then we're in for a shite show as they try to ramp up production.
I think acquiring much of the manual labor will be easy, these people are always ready to jump jobs and companies for a $1/hr increase, but the educated people that don't go into the career such as engineers is where they'll hurt. The great retirement is coming sooner rather than later as it is.
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