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Started By
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Oil Supply and demand question
Posted on 3/30/20 at 8:08 pm
Posted on 3/30/20 at 8:08 pm
1. What is the reason behind the supply being increased?
2. What advantage do oil producing counties have in doing this?
3. How does it effect our US production?
Thanks.
2. What advantage do oil producing counties have in doing this?
3. How does it effect our US production?
Thanks.
7
Posted on 3/30/20 at 8:13 pm to Mud_Till_May
The big boy USA is knocked down for the moment.
Posted on 3/30/20 at 8:15 pm to Mud_Till_May
Saudi’s got tired of losing market share.
Posted on 3/30/20 at 8:15 pm to Mud_Till_May
Saudi Arabia can still make money at $30 a barrel and the US can’t because of regulation. They are trying to break us
Posted on 3/30/20 at 8:16 pm to Mud_Till_May
Price war because Russia and Saudi Arabia couldn't agree on production cuts. Massive demand decrease due to Covid.
Making the other country bend the knee.
Companies will stop drilling when it's not profitable. We are probably already there in most cases.
Making the other country bend the knee.
Companies will stop drilling when it's not profitable. We are probably already there in most cases.
Posted on 3/30/20 at 8:17 pm to Jack Daniel
quote:
Saudi Arabia can still make money at $30 a barrel and the US can’t because of regulation. They are trying to break us
I thought Saudi Arabia was our ally?
Posted on 3/30/20 at 8:17 pm to Mud_Till_May
quote:
What is the reason behind the supply being increased?
- Very few people/industries are buying
- All producers are still pumping fast and furious
- You can't just turn off production by flipping a switch like a light switch
quote:
What advantage do oil producing counties have in doing this?
I assume you mean countries but, the two big players KSA and Russia have lower lifting costs than the US, Canada and pretty much anyone else. The idea is that they can price out these other players and be the only game in town.
quote:
How does it effect our US production?
It pretty well kills it, slowly but surely.
This post was edited on 3/30/20 at 8:18 pm
Posted on 3/30/20 at 8:17 pm to Mud_Till_May
It's more of a problem that global demand has nearly disappeared overnight and the supply has not been reduced.
Posted on 3/30/20 at 8:17 pm to back9Tiger
quote:
Saudi’s got tired of losing market share.
Could you please tell me who are the major players in the market and how much share they have? Thanks
Posted on 3/30/20 at 8:18 pm to Mud_Till_May
Money has no ally.
Posted on 3/30/20 at 8:19 pm to Mud_Till_May
quote:
Could you please tell me who are the major players in the market and how much share they have? Thanks
From 2017, but here you go
Posted on 3/30/20 at 8:23 pm to Mud_Till_May
quote:
I thought Saudi Arabia was our ally?
Posted on 3/30/20 at 8:24 pm to Jack Daniel
quote:
Saudi Arabia can still make money at $30 a barrel and the US can’t because of regulation. They are trying to break us
The Saudis need $80 plus a barrel to break even. They are not trying to break us. They are trying to break the Russians and the Saudis think they can hold out longer than the Russians.
LINK
Posted on 3/30/20 at 8:25 pm to Mud_Till_May
quote:
I thought Saudi Arabia was our ally?
The uh...the people who flew planes into the Twin Towers? You thought those people were our allies?
I think this is a troll thread and judging by your name, you're a laid off (or soon to be laid off) mud engineer just fricking with people.
Posted on 3/30/20 at 8:27 pm to fallguy_1978
Yes, saw a price sheet today, mid -teens average (per bbl). 
SE Kansas was around $7/bbl. shite finna get real real.
SE Kansas was around $7/bbl. shite finna get real real.
This post was edited on 3/30/20 at 8:29 pm
Posted on 3/30/20 at 8:29 pm to Mud_Till_May
Not sure what share but the Saudis have like $10 trillion worth of oil under their sand pit.
Posted on 3/30/20 at 8:30 pm to Macavity92
quote:
The Saudis need $80 plus a barrel to break even.
This depends on your definition of “break even”. Their lifting costs are much, much lower than $80. But they need higher oil prices to balance their budget nationally.
This is important, because it means that the $80 “break even” point is actually dependent on how much oil they produce. As long as the price is above their actual lifting cost, they can make up some of the difference with volume.
Posted on 3/30/20 at 8:34 pm to lostinbr
quote:
Their lifting costs are much, much lower than $80. But they need higher oil prices to balance their budget nationally.
Exactly right. Alltheway Tigers! posted this in a thread on the Money Board
quote:
When oil reached $50 to 36 then to 50 from Oct 15 to May 16, SA was burning through $10 billion per month. Just an idea of that burn rate. Reserves fell from its high of $737B in Aug 14 to $529B at YE 2016.
Keep in mind SA was about to gain record high reserves due to oil prices of $80 to 120 to $80 from June 2009 to Nov 2014. Oil prices have not reached above $80 since Nov 2014, meaning no significant accumulation in currency reserves. SA has already cut is budget since then. Keep in mind, the populace is one well kept set of people. I think they hire people to wipe their arses.
Tl;dr - KSA tried this same strategy a few years ago and pissed through a ton of money. They're (reluctantly, I believe) getting pulled into Round 2 thanks to Russia.
Posted on 3/30/20 at 8:37 pm to Macavity92
Dude, heavy bitumen in Canada can make money at $60/barrel. Saudi oil is lighter, shallower and there’s no such thing as environmental regulation. Wherever you heard $80 is wrong.
I can’t speak on their budget, deficit or whatever but they can “break even” wayyyy less than $80/barrel
I can’t speak on their budget, deficit or whatever but they can “break even” wayyyy less than $80/barrel
Posted on 3/30/20 at 8:38 pm to Boring
quote:
Tl;dr - KSA tried this same strategy a few years ago and pissed through a ton of money. They're (reluctantly, I believe) getting pulled into Round 2 thanks to Russia.
Yep, they tried to price shale out of the market in 2014 and failed. They managed to do some damage, but the shale industry was already getting more efficient at that point.
They also fricked over a lot of other OPEC countries in the process. I have to think OPEC is taking its dying breaths as a cartel, considering how it’s basically been KSA doing whatever they want at the expense of everyone else since 2014.
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