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Started By
Message
re: Oil approaching $60
Posted on 12/10/14 at 4:12 pm to Jim Rockford
Posted on 12/10/14 at 4:12 pm to Jim Rockford
I think demand for Saudi oil has steadily been decreasing as the US has become increasingly energy independent and now the Saudi's are trying to regain their market. They can print money selling oil for 30 dollars a barrel and still own the market. I think this is just the beginning of a major oil correction. They are trying to get the US hooked on their product again before it's too late.
0
Posted on 12/10/14 at 4:14 pm to Hawkeye95
quote:
I went to a talk on Monday night by some guys that run a hedge fund and they believe the drop in prices is due more to Libya coming back online plus a desire to frick over russia and ISIS than it was a conspiracy to screw over domestic oil.
The fact that ISIS was mentioned basically discredits those guys.
And 500k additional barrels coming back online isn't going to torpedo prices by 30%+. The oversupply had been building...was 500k a tipping point? Maybe, but the picture is bigger than Libya.
Posted on 12/10/14 at 4:16 pm to cwill
quote:Why? Look at what has happened to the price of oil since ISIS started taking over oil fields.
The fact that ISIS was mentioned basically discredits those guys.
quote:So my suspicions have been confirmed.
I went to a talk on Monday night by some guys that run a hedge fund and they believe the drop in prices is due more to Libya coming back online plus a desire to frick over russia and ISIS than it was a conspiracy to screw over domestic oil.
Posted on 12/10/14 at 5:06 pm to La Place Mike
quote:
Why? Look at what has happened to the price of oil since ISIS started taking over oil fields.
Coincidence...they don't move enough oil.
The price collapse is due to a building oversupply...the oil market is fairly opaque and it doesn't always track supply and demand very well and that's why you get the price shocks.
Some primitive jihadists moving at most 20,000 bbl/day into very regional black markets won't affect world prices - it's negligible. Further, they're getting the oil from declining mature fields and they lack any ability to keep it flowing.
Posted on 12/10/14 at 10:34 pm to Jim Rockford
I read BoAs prediction which if you read only predicts a dip to $50 then a rebound nxt year to $80-90. I don't disagree on the near term dip but I think the rebound is more likely to the mid 70s.
ETA: Here it is from your link:
ETA: Here it is from your link:
quote:
“We expect a pretty sharp rebound to the high $80s or even $90 in the second half of next year,” said Sabine Schels, the bank’s energy expert.
This post was edited on 12/10/14 at 10:37 pm
Posted on 12/10/14 at 10:38 pm to Jim Rockford
The saudis are trying to kill fracking, and it might work. One sure thing is, Louisiana is mega fricked.
Posted on 12/10/14 at 10:40 pm to Jim Rockford
quote:
Oil approaching $60
Oil Market is responding well to Mary losing.
Posted on 12/10/14 at 10:41 pm to LSUTigersVCURams
quote:
The saudis are trying to kill fracking, and it might work. One sure thing is, Louisiana is mega fricked.
I live in Louisiana and will be employed either way because I have marketable skills. The low oil prices have translated to more money in my pocket.
Posted on 12/10/14 at 10:58 pm to Asgard Device
quote:
I live in Louisiana and will be employed either way because I have marketable skills. The low oil prices have translated to more money in my pocket.
You're job is completely detached from the larger LA economy???? If the majority of LA folks have less income you're OK?
Posted on 12/10/14 at 11:12 pm to cwill
Yeah, people in LA need to realize what the ramifications are. I remember in the moratorium, it was estimated that a quarter of the state's economic output can be attributed to O&G (which is why the moratorium was so bad). I would imagine that it's even bigger now, and really about to magnify when these massive LNG projects come on line over the next decade.
As I've mentioned earlier in this thread, I'm not sure if it's a net positive for the economy, even though at first glance it may seem like it. But it's definitely a huge net negative for LA, for several reasons.
As I've mentioned earlier in this thread, I'm not sure if it's a net positive for the economy, even though at first glance it may seem like it. But it's definitely a huge net negative for LA, for several reasons.
Posted on 12/10/14 at 11:14 pm to cwill
quote:
You're job is completely detached from the larger LA economy???? If the majority of LA folks have less income you're OK?
Everything is connected. The majority of Louisiana folks already have less income when compared to many other states. The nation's middle class will be more prosperous with cheaper energy. They will spend that money elsewhere and those companies will hire and need my services. You have to be prepared to move, though.
Posted on 12/10/14 at 11:24 pm to Asgard Device
quote:
I live in Louisiana and will be employed either way because I have marketable skills. The low oil prices have translated to more money in my pocket.
Don't doubt it, but I'm talking about the state budget. I like here too, and I hate to tell you, shite's going to be grim if the price of crude stays this low.
Posted on 12/10/14 at 11:27 pm to Lou Pai
quote:
Lou Pai
Nice avatar dude. That's that fellow from Enron, no? Largest single landholder in Colorado if I'm not mistaken.
Posted on 12/10/14 at 11:28 pm to LSUTigersVCURams
quote:Why Louisiana in particular? A lot of fracking, or just a lot of the budget from oil taxes?
The saudis are trying to kill fracking, and it might work. One sure thing is, Louisiana is mega fricked.
This post was edited on 12/10/14 at 11:29 pm
Posted on 12/10/14 at 11:29 pm to Iosh
The Louisiana state budget is leveraged heavily against oil royalties. It's going to get ugly.
This post was edited on 12/10/14 at 11:30 pm
Posted on 12/10/14 at 11:29 pm to LSUTigersVCURams
Dutch disease 
Posted on 12/11/14 at 12:37 am to Jim Rockford
There are a lot of factors at work here. But the main thing I think is that these prices are cyclical.
I worked in the oilfield in 1999 in Lafayette during the low of that bust cycle. We thought we would never see oil above $15/bbl again. Guess what?
Speculation and investors don't help the situation and I think a lot of the inflation we have seen in oil prices in recent years has a lot to do with those factors.
If you believe some experts the price "should be" around $60-80/bbl based on what it costs to explore, produce, and refine.
We'll see the price go down and it will come back up later.
I think there are so many factors at play we are getting to a point where the market actually drives the price. Not OPEC, not SA production, not government incentives, not Shale, not Investor guesses about what the price may or may not be tomorrow, not foreign wars, not alternative energy. No one factor is capable of changing the price very much on its own.
Now, if you're Big Oil the recent prices are not great news. Don't worry about them. They will still explore and if it is a losing deal to produce from a well they'll cap it and come back to it another day. Their gravy train at a peak $145/bbl was not sustainable and unsurprisingly, the market could not bear it.
Many parts of the economy will get a great boost. Construction costs go down, development is spurred, raw materials are cheaper, shipping costs go down, consumers have more money to spend. Chemical plants can do well as their feedstock and energy costs go down.
I worked in the oilfield in 1999 in Lafayette during the low of that bust cycle. We thought we would never see oil above $15/bbl again. Guess what?
Speculation and investors don't help the situation and I think a lot of the inflation we have seen in oil prices in recent years has a lot to do with those factors.
If you believe some experts the price "should be" around $60-80/bbl based on what it costs to explore, produce, and refine.
We'll see the price go down and it will come back up later.
I think there are so many factors at play we are getting to a point where the market actually drives the price. Not OPEC, not SA production, not government incentives, not Shale, not Investor guesses about what the price may or may not be tomorrow, not foreign wars, not alternative energy. No one factor is capable of changing the price very much on its own.
Now, if you're Big Oil the recent prices are not great news. Don't worry about them. They will still explore and if it is a losing deal to produce from a well they'll cap it and come back to it another day. Their gravy train at a peak $145/bbl was not sustainable and unsurprisingly, the market could not bear it.
Many parts of the economy will get a great boost. Construction costs go down, development is spurred, raw materials are cheaper, shipping costs go down, consumers have more money to spend. Chemical plants can do well as their feedstock and energy costs go down.
Posted on 12/11/14 at 1:04 am to deltaland
Corn prices are way down too. Good news for everyone except Oil and Gas and Ok, Texas, Louisiana and Alaska. Gas should be 2 bucks a gallon soon, food prices should fall a little too
Posted on 12/11/14 at 1:40 am to LSUTigersVCURams
I was, but sold my estate and now travel around the country with my wife to our various vaction homes.
This post was edited on 12/11/14 at 1:41 am
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