OPEC EXPECTED TO CUT - WHERES THE CUT FROM UNCLE SAM

[Justin Hicks + 162]

On 3/5/2020 at 8:39 AM, Old-Ruffneck said:

30$bbl on WTI? Hovering around 45$ right now, I doubt 30$'s range is in near future. Might hit 40 before a rebound in next 2 weeks but then is the time to buy, by September it should be back in upper 50's to lower 60's$ range.

Well that worked out nicely...😊

[Old-Ruffneck + 1,246]

34 minutes ago, Justin Hicks said:

Well that worked out nicely...😊

Yes, that was my forecast and still believe it will rise. I think that if KSA decides to flood the market with extra few million bpd, I say if it forces it downward to 25 range buy it all and refill our SPR and capitalize on their ignorance. We can take on well over 120mb. But it will rise again, they've played this game before and lost. 

[surrept33 + 609]

1 hour ago, Douglas Buckland said:

And if frogs had wings they wouldn’t bump their asses! Russia and Saudi do not have free markets, so we have to deal with that fact.,Supposedly the US does. If shale cannot compete in the global market then they must be allowed to fail unless they can become competitive.

 

It depends on your definition of free market. The US has a long tradition of both mercantilism and free market policies

https://en.wikipedia.org/wiki/Tariff_of_1789

I think most people would agree that free markets work better in general, but the efficacy of situational strategic interventions are a different matter. We've certainly had a long history of them.

[El Nikko + 2,145]

2 hours ago, Douglas Buckland said:

And if frogs had wings they wouldn’t bump their asses! Russia and Saudi do not have free markets, so we have to deal with that fact.,Supposedly the US does. If shale cannot compete in the global market then they must be allowed to fail unless they can become competitive.

How can you possibly put all of this on Saudi or Russia when the shale players never took ANY steps to control themselves and shore up the price?

Basically Saudi and Russia have said, ‘If the US wants to play the game of unrestricted production, we will also!’.

Tell me I’m wrong...

If the US ends up being in a situation where foreign powers can control it because they control the spigots the US is totally screwed and this is probably why they are doing things like brainwashing kids to be against oil and pumping cash into renewables etc. The west and especially the US cannot be dependant on the outside for energy period. Saudi is supposed to be a big ally of the US yet it's shafted them when ever they could and we've got two examples in the last 6 years of them doing it. It's fair to say shale oil screwed everything up (I was also affected a lot in my career) but while their business practices were terrible the US as a global power has benefitted even if temporarily.

It's a funny old world when your entire life depends on a geopolitical weapon

[Douglas Buckland + 6,308]

3 hours ago, El Nikko said:

If the US ends up being in a situation where foreign powers can control it because they control the spigots the US is totally screwed and this is probably why they are doing things like brainwashing kids to be against oil and pumping cash into renewables etc. The west and especially the US cannot be dependant on the outside for energy period. Saudi is supposed to be a big ally of the US yet it's shafted them when ever they could and we've got two examples in the last 6 years of them doing it. It's fair to say shale oil screwed everything up (I was also affected a lot in my career) but while their business practices were terrible the US as a global power has benefitted even if temporarily.

It's a funny old world when your entire life depends on a geopolitical weapon

Nikko, I agree entirely, but putting all your eggs in the oil shale basket seems like a poor strategy to me. The reservoirs are tight, no way around that. You can mitigate the low permeability by hydraulic fracturing, for awhile, but eventually the rock properties dominate and you get the drastic decline curves. You can also drill continuously to take advantage of the ‘high’ initial production, but this costs serious cash.

In my OPINION, the money would be better spent on serious seismic exploration onshore and off to identify conventional reservoirs to explore when certain threshold oil prices are reached. These conventional reservoirs keep on delivering for years without the drastic declines and continuous drilling.

Is there a place in the matrix for shale oil? I believe that there is, but we cannot ignore the conventional plays.

We need a long term strategy and , like it or not, we need to be a ‘team player’ within the global oil and gas community.

[James Regan + 1,776]

Circuit Breakers will kick in again today, gonna be a rough ride....

[James Regan + 1,776]

Let’s wait until a refinery or oil platform gets a breakout with CV that will be interesting to see how it’s handled??

[Douglas Buckland + 6,308]

22 minutes ago, James Regan said:

Let’s wait until a refinery or oil platform gets a breakout with CV that will be interesting to see how it’s handled??

Not really Jim, everybody hates anybody making a living in the oil and gas business. They’ll just quarantine the refinery or platform and once each day they’ll come by ringing a bell and shouting, “Bring out your dead!”

Isn’t there a Monty Python skit along these lines?🤔

[wrs + 893]

10 hours ago, Douglas Buckland said:

And if frogs had wings they wouldn’t bump their asses! Russia and Saudi do not have free markets, so we have to deal with that fact.,Supposedly the US does. If shale cannot compete in the global market then they must be allowed to fail unless they can become competitive.

How can you possibly put all of this on Saudi or Russia when the shale players never took ANY steps to control themselves and shore up the price?

Basically Saudi and Russia have said, ‘If the US wants to play the game of unrestricted production, we will also!’.

Tell me I’m wrong...

Why should we restrict production if we are importing oil?  The US consumes more oil than it produces, the other nations produce more than they consume. We should shut our ports to KSA oil.  I don't think it's legal to import oil from Iran or Venezuela because they are sanctioned but I am not sure about Russia.  In any case, if they haven't been, they should be and so should KSA.  We don't have to buy their oil and ruin our markets.  

KSA has a problem with Russia because that is who they are competing with in Europe and Asia, they don't sell much oil in the US anyway.  What they are complaining about is our exports of LTO but there are exports of similar quality coming from both of them and from Nigeria.  

The US doesn't need to suffer the fallout of both the CV and the food fight going on between the babies in KSA and Russia.

[Douglas Buckland + 6,308]

Sp what are we going to blend that light shale oil with so that it is worth refining?

[Old-Ruffneck + 1,246]

3 minutes ago, Douglas Buckland said:

Sp what are we going to blend that light shale oil with so that it is worth refining?

https://oilprice.com/Latest-Energy-News/World-News/US-Discusses-Buying-Oil-For-SPR-To-Help-Shale-Drillers.html

[James Regan + 1,776]

Second Trading halt (Circuit Breaker) in history in less than a week, it’s not looking peachy. Need to limit ego and emotional trading and look at the market indicators and clean out dead wood.

Edited March 12, 2020 by James Regan

[James Regan + 1,776]

37 minutes ago, wrs said:

Why should we restrict production if we are importing oil?  The US consumes more oil than it produces, the other nations produce more than they consume. We should shut our ports to KSA oil.  I don't think it's legal to import oil from Iran or Venezuela because they are sanctioned but I am not sure about Russia.  In any case, if they haven't been, they should be and so should KSA.  We don't have to buy their oil and ruin our markets.  

KSA has a problem with Russia because that is who they are competing with in Europe and Asia, they don't sell much oil in the US anyway.  What they are complaining about is our exports of LTO but there are exports of similar quality coming from both of them and from Nigeria.  

The US doesn't need to suffer the fallout of both the CV and the food fight going on between the babies in KSA and Russia.

It’s about market share not friends or foes and the US has upset market share to quickly and considered recklessly by its peers and other players , so now the US has to remain in the bed it’s made. And let’s face it it wasn’t a well made bed, Now the big fat Halliburton hand has plonked his ass on said bed, not good if you own said bed...

[James Regan + 1,776]

Oil industry representatives have pitched for discussion to the U.S. Administration the idea that Washington buy cheap crude oil to replenish the Strategic Petroleum Reserve, which would also remove millions of barrels of oil from the heavily oversupplied market and may help U.S. producers that could turn out to be the first victim of the Saudi-Russian oil price war.
 

WHERE WOULD IT BE BOUGHT FROM, SURELY THE LOGICAL THING TO DO WOULD BE TO LET THE LTO SEGMENT REPLENISH THE SPR? 

IS THIS LEGAL?

IS LTO A SUFFICIENT PRODUCT TO ADD TO THE SPR IS IT INFERIOR IN SOME WAY?

Edited March 12, 2020 by James Regan

[wrs + 893]

1 hour ago, James Regan said:

It’s about market share not friends or foes and the US has upset market share to quickly and considered recklessly by its peers and other players , so now the US has to remain in the bed it’s made. And let’s face it it wasn’t a well made bed, Now the big fat Halliburton hand has plonked his ass on said bed, not good if you own said bed...

 The US domestic market is where the largest market share was lost when shale came on.  Do those countries have a right to our markets above those of our own companies?  No, they do not.  

However, Russia doesn't sell oil to the US and KSA is selling very little as of a week ago.  Why is a gain in domestic market share a loss to countries that aren't selling to us?

[wrs + 893]

3 minutes ago, James Regan said:

Oil industry representatives have pitched for discussion to the U.S. Administration the idea that Washington buy cheap crude oil to replenish the Strategic Petroleum Reserve, which would also remove millions of barrels of oil from the heavily oversupplied market and may help U.S. producers that could turn out to be the first victim of the Saudi-Russian oil price war.
 

WHERE WOULD IT BE BOUGHT FROM, SURELY THE LOGICAL THING TO DO WOULD BE TO LET THE LTO SEGMENT REPLENISH THE SPR? 

IS THIS LEGAL?

Buying cheap crude from wherever, it doesn't matter and it's completely legal.  I am not sure it's the best approach but it seems to be the Chinese approach.  If those countries want to dump oil then we will take it at their loss assuming they don't fold when the buying starts.

My preference would be a targeted tariff on all oil not from SA or NA.

[James Regan + 1,776]

1 minute ago, wrs said:

 The US domestic market is where the largest market share was lost when shale came on.  Do those countries have a right to our markets above those of our own companies?  No, they do not.  

However, Russia doesn't sell oil to the US and KSA is selling very little as of a week ago.  Why is a gain in domestic market share a loss to countries that aren't selling to us?

13 million Bbls of oil wherever it is going to or wherever it came from was always going have a knock on affect. This is the big picture too big too fast and it upset to status quo of decades in what should be considered overnight in the grand scheme. There was always going to be push back although others tried to accommodate, but LTO kept on “breaking records “ and once CV and Russia had had enough the levy broke.

[wrs + 893]

2 hours ago, Douglas Buckland said:

Sp what are we going to blend that light shale oil with so that it is worth refining?

Canadian heavy oil is the most used input for that purpose.  LTO is fine for refining without the blending in simple refineries of which there are plenty.  The larger product slate from heavy oil is likely to be worth a lot less in the upcoming worldwide depression that results from the CV and financial fallout.

Edited March 12, 2020 by wrs

[Douglas Buckland + 6,308]

If you get rid of the scaremongering and victim mentality I seriously doubt we’d have a global depression resulting from the CV issue.

[wrs + 893]

9 minutes ago, James Regan said:

13 million Bbls of oil wherever it is going to or wherever it came from was always going have a knock on affect. This is the big picture too big too fast and it upset to status quo of decades in what should be considered overnight in the grand scheme. There was always going to be push back although others tried to accommodate, but LTO kept on “breaking records “ and once CV and Russia had had enough the levy broke.

The US producers never had any production agreement with OPEC or OPEC+, why should they stop producing?  Obviously the lower prices will hinder new drilling just as they did in 2016.  How much will production drop?  Remains to be seen but I would bet US production is less than 12mmbbl/day by June.

[wrs + 893]

2 minutes ago, Douglas Buckland said:

If you get rid of the scaremongering and victim mentality I seriously doubt we’d have a global depression resulting from the CV issue.

Well that may be but the scaremongering and enforcement of lockdowns is going to do heavy damage across the economy which depends on constant cash-flows because so many businesses are not able to handle an interupption in cash-flow for even a month or two.

[Douglas Buckland + 6,308]

2 minutes ago, wrs said:

The US producers never had any production agreement with OPEC or OPEC+, why should they stop producing?  Obviously the lower prices will hinder new drilling just as they did in 2016.  How much will production drop?  Remains to be seen but I would bet US production is less than 12mmbbl/day by June.

Right you are! They had no agreement with anyone so I guess that makes it okay to pump around 10 million barrels a day into an already flooded market, thereby ensuring a lower price per barrel and guaranteeing that they would never turn a profit! Absolutely brilliant business model!

Now Saudi an Russian want to pump unfettered and the shale oil crew is shouting ‘Foul’. What goes around, comes around. Stop whining.

[Douglas Buckland + 6,308]

6 minutes ago, wrs said:

Well that may be but the scaremongering and enforcement of lockdowns is going to do heavy damage across the economy which depends on constant cash-flows because so many businesses are not able to handle an interupption in cash-flow for even a month or two.

True, but let’s be honest here, it is NOT the virus itself that will lead to this, but the media induced hysteria and fear. Time to hold the mass media accountable for this bullshit...

[wrs + 893]

12 minutes ago, Douglas Buckland said:

Right you are! They had no agreement with anyone so I guess that makes it okay to pump around 10 million barrels a day into an already flooded market, thereby ensuring a lower price per barrel and guaranteeing that they would never turn a profit! Absolutely brilliant business model!

Now Saudi an Russian want to pump unfettered and the shale oil crew is shouting ‘Foul’. What goes around, comes around. Stop whining.

Again, Doug, the US operates on a free market basis where price and supply controls the markets.  When prices went lower as a result of the foolish lower for longer policy that MBS implemented in 2015-2016, US production dropped and then OPEC decided that it would go the other way and limit it's production because they were losing too much money.  Russia got involved too.  There was no agreement for US producers to stop producing.

The US market is not a dumping ground for anti-competitive oil from KSA.    I pay a lot in taxes and I expect to get something for them.  Support from my govt against anti-competitive practices is a reasonable expectation.  That's not whining.  I took it in the ass back in 2015-2016 also.  The govt did nothing back then.

 

Edited March 12, 2020 by wrs

[wrs + 893]

8 minutes ago, Douglas Buckland said:

True, but let’s be honest here, it is NOT the virus itself that will lead to this, but the media induced hysteria and fear. Time to hold the mass media accountable for this bullshit...

I think it's intentional but that's a conspiracy minded point of view.