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re: Trump gas prices have been a huge “tax cut”
Posted on 12/28/19 at 7:16 pm to cwill
Posted on 12/28/19 at 7:16 pm to cwill
quote:
Has hardly anything to do with current prices....the energy industry, with a huge step change in tech, has nearly drilled itself into bankruptcy.
This. The fracking craze has all but busted the drilling and service side. Eventually only the majors will be left.
1
Posted on 12/28/19 at 7:22 pm to reboil
quote:
The fracking craze has all but busted the drilling and service side. Eventually only the majors will be left.
Meh it is a cycle and right now the majors with their deep pockets have the upper hand, the more mobile wildcatters will be back at it soon enough.
This game of majors and max profit vs wildcatters and max production has been going on since before JDR was calling the shots and how he became able to control the game for a while.
Posted on 12/28/19 at 7:28 pm to cave canem
The shale play is different than normal cycle IMO.
Posted on 12/28/19 at 7:30 pm to reboil
no its not, not in the grand scheme of things.
Shale is simply the latest disruptor is an industry whose history is replete with them.
Shale is simply the latest disruptor is an industry whose history is replete with them.
Posted on 12/28/19 at 8:01 pm to teke184
quote:
The Saudis are in the process of selling a good chunk of Aramco off
No they aren’t...it’s a tiny %.
quote:
They like high gas prices but, at the same time, they can weather lower ones in the process of running their competition out of the market.
The Saudis don’t have pvt co motivations...they simply need enough money to fund the social programs that placate the people...if that doesn’t work, bone saws for everyone!!!
Posted on 12/28/19 at 8:02 pm to reboil
quote:
The shale play is different than normal cycle IMO.
I would say the only difference is the swing barrel has moved to the free-ish market US so that means more volatility.
Posted on 12/29/19 at 1:27 am to Zach
quote:
quote:
The Strategic Petroleum Reserve has been selling oil frequently. That’s why it’s been so low. Trump Admin has sought to draw down the reserves.
Uh, no. The SPR was designed for Saudi boycotts. There is no need for one now. The oil prices are lower because the US is self sufficient plus an exporter. This will not change until a Democrat/Communist is elected president.
He is right ya know. While the US agreed to sell 190 million barrels of the strategic oil reserve beginning in 2017, since then oil production in the US has risen over 4 million barrels per day, do the math, thats quite a bit more than the 190 million barrels.
Posted on 12/29/19 at 1:31 am to cwill
quote:
Has hardly anything to do with current prices....the energy industry, with a huge step change in tech, has nearly drilled itself into bankruptcy.
Huh? So supply and demand applies to everything in the world except energy?
And what is it with your mantra on bankruptcy in the oil patch. Do companies invest in an industry that has increased production 4 million barrels a day over the last couple of years....because its a bad business proposition??
Posted on 12/29/19 at 4:35 am to cwill
quote:
I would say the only difference is the swing barrel has moved to the free-ish market US so that means more volatility.
I would state it as no one has a clue where the swing barrel resides and it moves around a lot, and that is leading the volitility.
Saudi Arabia was not the swing producer due to size alone, it was the fact one single player controlled all that production, as you know the US is a very different animal and will likely never be able to swing prices do to so many players being involved.
Posted on 12/29/19 at 9:00 am to cave canem
quote:
as you know the US is a very different animal and will likely never be able to swing prices do to so many players being involved.
That is my point...the US can’t intentionally swing the price, but the reactions to price increases creates volatility.
Posted on 12/29/19 at 9:06 am to teke184
quote:
The Saudis are in the process of selling a good chunk of Aramco off to fund investment in other industries
Yeah, I read about that last week. The idea of diversifying their economy is an easy call. However, the reality is that Saudi Arabia has been making that commitment for over 20 years. They're just not good at doing it.
Posted on 12/29/19 at 9:13 am to trinidadtiger
quote:
He is right ya know. While the US agreed to sell 190 million barrels of the strategic oil reserve beginning in 2017, since then oil production in the US has risen over 4 million barrels per day, do the math, thats quite a bit more than the 190 million barrels.
You're not following me. There is NO NEED for an SPR. We can sell the whole damn thing. The purpose was deterrence (think nuke weapons). After the embargo we decided that an SPR would force the Saudis into a no win situation:
a. SA can stop producing and take the financial hit to coerce US policy.
b. The US SPR will prolong the SA hit (months) to the point that it creates a big impact on SA modernization and construction funded by oil money .
That scenario is gone. The SPR did it's job. We don't need bomb shelters any more. That's why we got rid of them. We don't need an SPR.
The initial idea (before the SPR) was just to circumvent SA boycott. The US would just buy oil from say, France, who bought it from SA. This was ditched because King Faisal told Aramco officials (it was still run by the US back then) that any such circumvention of the boycott = we cut off your heads.
The SPR became the better choice.
This post was edited on 12/29/19 at 9:14 am
Posted on 12/29/19 at 9:31 am to Zach
I was agreeing with you Zach, selling off the reserve has little impact because the domestic production is so large.
And yes it makes no sense to keep it and the govt is doing the right thing by selling it down in tranches to minimize the disruption of the market, and adding a few schekels to the treasury in the process.
And yes it makes no sense to keep it and the govt is doing the right thing by selling it down in tranches to minimize the disruption of the market, and adding a few schekels to the treasury in the process.
Posted on 12/29/19 at 9:43 am to trinidadtiger
quote:
And what is it with your mantra on bankruptcy in the oil patch. Do companies invest in an industry that has increased production 4 million barrels a day over the last couple of years....because its a bad business proposition??
It seems the only thing you know about the industry is the current production numbers and absolutely nothing else. Interestingly that seems to have been that’s been the case with most industry mgmt teams over the last 15 years, too!
Posted on 12/29/19 at 10:17 am to Lsujacket66
Gas prices affects every one of us on a daily basis, low gas prices is an under appreciated aspect of the Trump economy. He doesn’t get enough credit for what he’s done for working people.
Posted on 12/29/19 at 10:17 am to trinidadtiger
quote:
I was agreeing with you Zach, selling off the reserve has little impact because the domestic production is so large.
I see it now. My bad. I'm still coming down from all the football last night.
Posted on 12/29/19 at 10:40 am to Zach
quote:
The oil prices are lower because the US is self sufficient plus an exporter.
Current US Prod: 12mmbopd
Current US consumption: 20mmbopd
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