Oil

[SkyRider]

I can't find the old oil threads.

Here is what I heard (right or wrong) about Saudi oil.

Apparently, their cost of production is under $30 but they need $90 oil to fund their social programs to keep the natives happy. Right now the Saudis are funding the difference between $90 and $49 by drawing down their cash reserves.

Low oil prices will not last long. Go long oil now.

 

[james t kirk]

The whole thing is a giant manipulation.

For the last 10 years, there was a breeze in the gulf coast states in the USA and the price of energy shoots up 20% overnight.

Now, we are drowning in oil.

Doesn't make any sense.

I figure that the US wants to drive Putin out of office and this is what just might do it. The Saudis want to bankrupt Iran, and so you have a perfect marriage made in heaven.

I agree that oil prices will rise again, but it might be 5 years or more. (Just long enough to kill the electric car and get everyone buying gas guzzling dinosaurs again.) Then BAM.

 

[spaman]

The whole thing is a giant manipulation.

For the last 10 years, there was a breeze in the gulf coast states in the USA and the price of energy shoots up 20% overnight.

Now, we are drowning in oil.

Doesn't make any sense.

I figure that the US wants to drive Putin out of office and this is what just might do it. The Saudis want to bankrupt Iran, and so you have a perfect marriage made in heaven.

I agree that oil prices will rise again, but it might be 5 years or more. (Just long enough to kill the electric car and get everyone buying gas guzzling dinosaurs again.) Then BAM.

fuck me five years?

 

[james t kirk]

fuck me five years?

Don't quote me on that. It's just me spouting off on TERB.

But 5 years would be about right for a whole new generation of gas guzzling cars to be bought on the promise of cheap gasoline.

Hard to sell Escolades (which I would never buy in a million years anyway) when gasoline is $1.50 a litre. Not so hard when it's 0.82 per litre.

 

[onthebottom]

US production I think is the wildcard, Europe will go sideways for some time, China is slowing (law of big numbers will start to bite), most of the rest of the BRICS are sideways... Until there is economic growth again in the large rich countries I think you have weak oil prices....

I think SA punishing Iran and Russia (for support Of Syria) is a happy coincidence to their wanting to slow down US production. It will work eventually unless US producers can innovate a lower cost of production, then SA is screwed.

 

[anon1]

The whole thing is a giant manipulation.

+10,000,000

 

[SkyRider]

But 5 years would be about right for a whole new generation of gas guzzling cars to be bought on the promise of cheap gasoline.

So, the $150 question is what will be the price of oil in 2020? Maybe $150 a barrel again (and we are stuck with Escolades)?

 

[oil&gas]

Have no idea what oil price will be like in 2020. I'd say by then
operating cost of producing a barrel of oil
outside the gulf region will be a lot higher than what it is today.
And the cost of finding and developing new reserves will be a lot
higher as well. Before 2020 U.S. shale oilers will likely have
run out of sweet spots to drill on which (along with cheap credit)
have enabled them to make a profit with $90 oil. As uneconomical
as they are wells drilled on sweet spots are deceptively profitable
producing as much as about 30% of recoverable reserve first year
into production. Drilling activities will carry over to difficult areas
nonetheless if oil prices are sufficiently high.

 

[icespot]

We are not consuming as much oil as the oil producing countries would like us to consume.

So simply put make oil so cheap that it makes development of new technologies uneconomical, at the same time increasing our dependence on cheap oil by buying vehicles that use lots of gas.

On the process nock Putin out of the way and have US corporation buy the Russian oil industry at great discount.

Then when all in place drive oil back tl what ever level the oil producer s greedy hearts desire.

After all who do you think owns the oil industry in Saudi Arabia......

 

[basketcase]

The whole thing is a giant manipulation.....

OPEC and the Saudis want to keep oil prices reasonably low so that oil sands aren't economically viable and they keep their monopoly(ish).

What really annoys me with oil/gas prices is that Canada no longer has any refining capacity. We sell cheap oil to the US at a poor exchange rate, the Americans refine our oil into gas, then sell the gas back to us at a high conversion rate. High oil cost means expensive gas. Low oil prices means a low Canadian dollar we don't get the benefit of the lower price.

 

[anon1]

We sell cheap oil to the US at a poor exchange rate, the Americans refine our oil into gas, then sell the gas back to us at a high conversion rate.

The government is in bed with Big Oil? No way!!!!!

 

[jcpro]

A decade from now business schools will use this event as an example how NOT to manage a resource. Frankly, letting the prices fall was the only smart move Saudis made in a decade. By allowing prices to climb to extreme levels and stay there for a long time, they engineered, all by themselves, a cut in their market share and gave away their destiny. Now, they're facing a cruel choice. Cut output and restart non OPEC bonanza or keep the prices low and accept a significant cut in income. All the while, oil consumers use technology to become more efficient and upstart producers consolidate, innovate and cut costs to the bone to ensure profitable future. Next couple of years will be interesting.

 

[oil&gas]

To my knowledge Saudi Arabia was producing at full capacity when oil price peaked around $140. After oil price collapsed to below $30 Saudi did cut back to retain some spare capacity. But the
shut in production was for low quality oil. In fact Saudi brought
their very last mega-giant oil field Manifa into production during the downturn. By the time oil prices hit $100 again
Saudi oil production was pretty much at its limit

The extreme level of oil prices in recent years was due to
rising demand not Saudi's mis-managment of its resources
or price manipulation on its part.

 

[SkyRider]

A sign of the times. Apparently, CNOOC is considering a $5 billion write-down of its Nexen investment.

P.S. Oil inventory in the U.S. at highest level in 80 years.