Dropping Oil Prices

Not sure how this is impacting US, by this article I would assume the crunch is felt by you guys as well

http://www.zerohedge.com/news/2014-12-10/a...re-good-economy

But here in Canada the loss in Govt revenue from oil royalties is going to be astronomical........... Could be a VERY bad 2015

Not sure how this is impacting US, by this article I would assume the crunch is felt by you guys as well

http://www.zerohedge.com/news/2014-12-10/a...re-good-economy

But here in Canada the loss in Govt revenue from oil royalties is going to be astronomical........... Could be a VERY bad 2015

Relax....

 

(Not sure if you were around for when I called oil the last time it did this? For the sake of credibility, here was my call on August 15, 2008... Oil was at $114/bbl. read the thread... It's awesome... Every prediction I made it came true.... And every prediction I made continues to be true five years later... http://www.lambopower.com/forum/index.php?...st&p=494146 )

 

 

The Saudis do this once every five years like clockwork....OPEC is no longer able to really control the price of oil on the embargo side... Too many wells in non member countries.... What they can do is control the price to the downside by pumping. North American shale oil is not cost effective below $75 a barrel or so (although, like anything else, that number comes down over time). Ok... Well we've got a shitload of oil. Turns out we've got more than they do... But there's is cheap to get out of the ground and cheap to refine.... So they have some room to cut their profits and still be ok.... While they take a bite out of our ass... Bottom line though is, they are addicted to that fcuking cash... So this is temporary... Shit is getting pretty cheap here (and it's at an amount that hurts them too at this point...).

 

China hasn't gone belly up... And they haven't sworn off oil... Nothing fundamentally has changed... It's a bear raid... And there is a bottom....

 

Bottom line, the cheap energy is good for the economy.... Enjoy it while it lasts.... A year from now we'll be bitching about the good old days when gas was under three bucks a gallon...

I'm pretty sure here govt revenue is per gallon and cheaper gas means more gas sold. So better for the govt.

 

I think the best thing now Is to find the bottom and invest in oil companies. The prices will rise again guarenteed.

I'm pretty sure here govt revenue is per gallon and cheaper gas means more gas sold. So better for the govt.

 

I think the best thing now Is to find the bottom and invest in oil companies. The prices will rise again guarenteed.

 

I like 55/ bbl. again... then a slow crawl back to 90.

Thanks RD, That's what I figured was happening. The Saudi's were going to make the shale gas frac'ing unfeasible economically and keep the reliance on Saudi oil. They are lucky to be able to pump straight from the ground... Unfortunately oil sand is even more cost prohibitive due to the labor required to refine bitumen. Canada is going to get hit hard in the crossfire. A lot of small oil companies without the contingency funds will probably fall to the wayside.. There was some scary talk oil prices per barrel being measured in different currencies... Kissinger had some ominous words.... seems he paved a road and Obama is deviating from the original plans. You think this has anything to do with trying to stick it to the Russians? Seems like Canada and US are playing with fire in their Soviet relations.... another cold war would suck.

Thanks RD, That's what I figured was happening. The Saudi's were going to make the shale gas frac'ing unfeasible economically and keep the reliance on Saudi oil. They are lucky to be able to pump straight from the ground... Unfortunately oil sand is even more cost prohibitive due to the labor required to refine bitumen. Canada is going to get hit hard in the crossfire. A lot of small oil companies without the contingency funds will probably fall to the wayside.. There was some scary talk oil prices per barrel being measured in different currencies... Kissinger had some ominous words.... seems he paved a road and Obama is deviating from the original plans. You think this has anything to do with trying to stick it to the Russians? Seems like Canada and US are playing with fire in their Soviet relations.... another cold war would suck.

 

 

If it's any consolation, I own a shitload of Canadian oil trust stocks.... And yeah... I'm watching them meltdown.... The Saudis are also the ones shorting them into the ground.... So they're making a shitload of cash in this.... Once the damage is done, they're going to back up the truck and buy them to hedge their bets and crank the prices back up....

 

I'm not panicking... I'm buying...

Don't forget the political side of it OUTSIDE of the USA. The Saudis know that Iran needs oil over $140 a barrel to balance their budget and Venezuela needs it over $120 a barrel to not go into bankruptcy. Two countries that the Saudis don't particularly like.

 

I am trying to find the CNN article where I read that info.

 

 

This is the closest I can find...I don't think this is the article I was thinking of though.

 

http://money.cnn.com/2014/10/30/investing/...a-saudi-arabia/

I think this round there are a few more political "games" then previous... as RD said, here In Canada its a 5 year cycle. This forces the small players out, drops labor rates and the game starts over. Difference now is that we use a lot of international vendors, whereas the past they were almost all Canadian and US. So shops, EPCM's, and suppliers here in Canada have a hard time competing with the Chinese and India with regards to labor costs....

http://www.zerohedge.com/news/2014-10-10/w...nd-saudi-arabia

I'm taking a bath cause I transferred a bunch of USD to NOK earlier this year.

Signing on for insights.

The goal is to hurt US exploration and production of oil. I think the price has to go too low for it to hurt natural gas long term.

Russia can't function properly with oil under $100 per barrel and it is starting to seriously effect their economy, well that combined with the sanctions.

 

I think that's a major factor.

North American shale oil is not cost effective below $75 a barrel or so (although, like anything else, that number comes down over time).

 

Everything I've read from the big companies say they are feasible into the $55 range, though somewhat location dependent.

 

And when you're dealing with companies like Conoco-Phillips, they obviously want to be profitable, but you're going to have a difficult time pressuring them to pull out of multi-billion dollar investments as they aren't exactly cash strapped.

 

Let them race to the bottom, hopefully it stabilizes in the low $60's and we can ride this out for a bit.

I remember back in the late '90s when gas was only 99 cents a gallon at the pump.

 

Seems like Canada and US are playing with fire in their Soviet relations.... another cold war would suck.

 

Russia doesn't have the money for another cold war. Also I'd say it's more Putin who has been playing with fire with invading Crimea and being behind shooting down a civilian airliner.

http://en.wikipedia.org/wiki/List_of_count...y_external_debt

 

I don't think the US could borrow more money to fight another war either

So cheap oil no good, expensive oil no good, damn!

 

Damned if you do you damed if you don't

Yes life stays happy around the 100 mark..... Ultimately here in Alberta cheap oil is BAD

I picked up some olive oil earlier and I did not notice a difference in price if that helps with this conversation.

 

It was nice on a salad.

Wait till the olive pickers unionize and the cartels take over...you'll be eating that salad dry

 

 

Very interesting chart, but I have first-hand knowledge regarding some of those plays and the numbers are no where near as high as the chart indicates.

So when will it "hit bottom", so we can buy more?