re: TM: “Houston Is Not Prepared for the Oil Bust“

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Sasol is a petrochemical complex so again their relationship with crude prices is more complex. Again, they are tied mostly the nat gas, or more specifically ethane, prices.

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Sasol is even more complex than that. Their IS assets love cheap feed stock, but overall as company the majority of their profits come from the huge refinery and coal to gas plant in South Africa. Also their stock is all over the map due to huge cost over runs on the mega project, rumors of a merger on a few units etc.

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It reminds me of when Dow sold off all of their PVC/chlor-alkali assets right when all of the smaller companies were dumping money into that business due to the high demand for caustic. Dow looked silly at the time but they look like geniuses now. They sold high while a lot of smaller companies are hurting now because of oversupply.

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Correct. But some of the smaller companies are killing it with edc and caustic is still pretty good too. Stacking the the chlorine and vcm until later when the market is recovered. Westlake just shutdown their lake Charles north vcm plant for a while. Pvc will bounce back though when market improves.

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ill say it is telling that Shell is backing out of LNG. It could just be that they expect to be strapped for cash in the short term, or they see the writing on the wall. There is a TON of private equity money itching to get into the LNG business which scares me if I’m a multinational company with low risk tolerance.

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I actually expect the demand for lng to lower some but supply to drop dramatically. Come winter I expect a spike in the price. But she'll is playing long term play here. They expect oil to stay low for a while and it's not worth the cost with lng.

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I hope those industries never take off.

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You're a little late to the party then, wind and solar are busy as shite right now

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Mudminnow

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To clarify, I wasn't speaking about Texas exclusively. I was just referring to TFIS blanket statement of disapproval

midland odessa area gonna fall off a cliff. a shitty 2 bedroom apartment was going for 1500 a month and a decent 3 bd 2 bath house was north of 300k. who would move there when there are no jobs.

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I guess there won't be anymore $400/night Holiday Inn Express rooms in Odessa anymore....I went there for a work trip 2 years ago and paid 2000 dollars for 4 nights....lucky I was even able to get a room and didn't have to drive back and forth from our office in Abilene everyday.

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Yep. And this is exactly why surplus hotels and service businesses have not been built during the good times (why there is a such price premium when there is high demand)

Too much of a risk when things fall off

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when most travel is essentially shut down.

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no true. you can travel anywhere right now domestically. i wouldn't go to new york though. hotels may be hard to get in most places but travel was never "shut down"

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It’s pretty crazy that when the economy goes through even a few weeks of instability the entire oil and gas industry is on the verge of ruin. How can such a giant industry be so unsustainable?

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It is incredibly difficult and expensive to get oil out of the ground.

Supply has to be predicted to meet demand, and demand was slashed to a trace level in the matter of a week or two.

I can buy a plane ticket right now. I checked bush international guidelines and there is nothing that says I cant fly somewhere. Getting a room where you go would be the only issue.