.

[Falcon + 222]

 

.

 

Edited July 30, 2019 by Falcon

[Douglas Buckland + 6,308]

If it wasn't for the shale oil fiasco and the way they approach business, the market would be much less volatile. They should take their share of the blame if oil goes to $40.

.....hold on, if oil goes to $40 those guys go out of business! The Law of Unintended Consequences strikes again!

[Old-Ruffneck + 1,246]

19 minutes ago, Douglas Buckland said:

If it wasn't for the shale oil fiasco and the way they approach business, the market would be much less volatile. They should take their share of the blame if oil goes to $40.

.....hold on, if oil goes to $40 those guys go out of business! The Law of Unintended Consequences strikes again!

Wait...…..40$ oil wont put em all out of business. KSA tried that before. And if oil drops that low, buy buy buy. It will go back up and ya can reap a reward. So is it a fiasco or not?

[Falcon + 222]

2 hours ago, Douglas Buckland said:

If it wasn't for the shale oil fiasco and the way they approach business, the market would be much less volatile. They should take their share of the blame if oil goes to $40.

.....hold on, if oil goes to $40 those guys go out of business! The Law of Unintended Consequences strikes again!

I agree both are to blame.  WTI may spike down below $40 , but for time being I believe prices rebound back to mid $50s.  

Too many shale producers still need oil in $50s to hang in there.  Supply would drop precipitously and bring WTI back to mid $50s.

That will eventually change, but My estimate $54 to $58 is an average WTI price for now. 

At some point sometime down the road a good bit  . .  you will see high $40s on a regular basis.

Edited July 23, 2019 by Falcon

[Old-Ruffneck + 1,246]

3 hours ago, Falcon said:

Oh don't worry Oil Price article says Goldman Sachs says oil should be trading higher  .  . .

The writer Nick C. of that story tries his damndest to get oil back up. Its in a good spot right now.

[Falcon + 222]

On 7/23/2019 at 8:52 AM, Old-Ruffneck said:

The writer Nick C. of that story tries his damndest to get oil back up. Its in a good spot right now.

Nick big cheerleader for high oilprices. He must be of Saudi decent . . .  Cunningham ? Probably one of their princes.

Never seen anyone disparage and trash Shale Industry as he does. 

What is strange is he seems to want oil price to go up just for NOCs (ie. ARAMCO, ANDOC, etc) .  .  .  .  but but not for Shale, he wants shale to go out of business.  

Edited July 25, 2019 by Falcon

[Tom Kirkman + 8,860]

12 minutes ago, Falcon said:

Nick big cheerleader for high oilprices. He must be of Saudi decent . . .  Cunningham ? Probably one of their princes.

Um, no.

[James Regan + 1,776]

30 minutes ago, Tom Kirkman said:

Um, no.

The info peddled on this forum at times is baseless and pulled from god knows where. Personal attacks are more common and absolute false price predictions with no reasoning why or how they get to these prices. It’s becoming more like Facebook each day, shame...

[vlov + 3]

This is assuming that 2 million barrels of Iranian oil is actually offline due to sanctions, which I have a very hard time believing to be the case. 

[GSXRblur + 18]

5 hours ago, James Regan said:

The info peddled on this forum at times is baseless and pulled from god knows where. Personal attacks are more common and absolute false price predictions with no reasoning why or how they get to these prices. It’s becoming more like Facebook each day, shame...

So true.  I use to come here to become better informed in the area of oil, gas and renewables but lately it is simply for the entertainment.

Also, moderators please limit topic subjects to 10 words or less.

[Douglas Buckland + 6,308]

12 hours ago, Old-Ruffneck said:

Wait...…..40$ oil wont put em all out of business. KSA tried that before. And if oil drops that low, buy buy buy. It will go back up and ya can reap a reward. So is it a fiasco or not?

I assume if they all are in debt with a negative cash flow when the price is somewhere around $50-55, then things won't be very rosy at $40. 

Back when KSA tried to run them into the ground it was still relatively easy for them to get money but investors are drying up now.

In my opinion, it is a fiasco.

[Jan van Eck + 7,558]

3 minutes ago, Douglas Buckland said:

I assume if they all are in debt with a negative cash flow when the price is somewhere around $50-55, then things won't be very rosy at $40. 

Back when KSA tried to run them into the ground it was still relatively easy for them to get money but investors are drying up now.

In my opinion, it is a fiasco.

Not really.  You overlook the imperatives of the independent oil "wildcatters."  As long as the product can be pumped at a marginal cost lower than the sales price, that oil will be pumped.  I suspect that the true marginal cost of some shale installations is quite a bit below $40.  In that case, what happens is that the capital costs of the operation are not repaid  (they are treated on the books as deferred), and the operating costs are covered, plus some payout to the investors.  The producers absolutely have to make payouts or their source of future risk capital is down the drain.  The only source of funding for those payouts is from the sale of oil.  SO that oil gets pumped and sold, some distributions will take place, and the big capital costs remain unpaid - simply deferred indefinitely.  Will the lenders be happy?  Of course not.  Do the lenders have any realistic alternative other than to sulk and bleat?  Nope.  The lenders take their lumps.  The risk investors will receive "something," just watch. 

I predict that oil can be pushed down to $29 and the investors will still see distributions.  The Lenders?  Zero. 

[ronwagn + 6,290]

16 hours ago, Falcon said:

It is entirely possible .  The Permian three new pipelines with 2.47 mm bbls is a given. 

Iran 2 mm going back online quite possible.

* PERMIAN 3 NEW PIPELINES (2.47 MM BBL). ARE OPEC'S WORST NIGHTMARE.

* NO , PROBABLY IRAN'S 2 MM BBL EXPORTS BACK ARE OPEC'S WORST NIGHTMARE.

* NO, NO, NO  BOTH PERMIAN AND IRAN TOTAL 4.47 MILLION BBLS IS OPEC'S NIGHTMARE FROM HELL  !

* NOW WHAT ABOUT INCREASED PRODUCTION FROM BRAZIL, NORWAY. GUYANA,  COLUMBIA, NIGERIA, IRAQ, LIBYA, . . . .   . . . . . . . . . . FORGET IT THIS IS GETTING DEPRESSING

Chevron CEO Michael Wirth stated at CERRAWEEK this year. " Cut Costs Or Die"

PS Mexico should hurry up and get their Billion Dollar Hedge on.

Oh don't worry in Oil Price article Goldman Sachs says oil should be trading higher  .  . .

Higher based on what ?

 

What if Venezuela eventually gets back in the business!

 

[Tom Kirkman + 8,860]

6 minutes ago, ronwagn said:

What if Venezuela eventually gets back in the business!

Seems highly unlikely any time soon.

The Socialist Paradise of Venezuela continues to sink ever deeper into the economic quicksand of Socialist Paradise.

The Socialist Paradise of Venezuela is shining example of the perfection of Socialism done correctly.

So long as Venezuela continues to embrace the lovely Paradise Ideals of Socialism, it seems pretty remote that the oil industry will recover in that country.

[ronwagn + 6,290]

34 minutes ago, Jan van Eck said:

Not really.  You overlook the imperatives of the independent oil "wildcatters."  As long as the product can be pumped at a marginal cost lower than the sales price, that oil will be pumped.  I suspect that the true marginal cost of some shale installations is quite a bit below $40.  In that case, what happens is that the capital costs of the operation are not repaid  (they are treated on the books as deferred), and the operating costs are covered, plus some payout to the investors.  The producers absolutely have to make payouts or their source of future risk capital is down the drain.  The only source of funding for those payouts is from the sale of oil.  SO that oil gets pumped and sold, some distributions will take place, and the big capital costs remain unpaid - simply deferred indefinitely.  Will the lenders be happy?  Of course not.  Do the lenders have any realistic alternative other than to sulk and bleat?  Nope.  The lenders take their lumps.  The risk investors will receive "something," just watch. 

I predict that oil can be pushed down to $29 and the investors will still see distributions.  The Lenders?  Zero. 

Sometimes I wonder if the government is funding shale oil somehow for geopolitical gain. 

[Tom Kirkman + 8,860]

7 hours ago, GSXRblur said:

So true.  I use to come here to become better informed in the area of oil, gas and renewables but lately it is simply for the entertainment.

Also, moderators please limit topic subjects to 10 words or less.

Apologies, just can't resist ...

 

[Tom Kirkman + 8,860]

1 minute ago, ronwagn said:

Sometimes I wonder if the government is funding shale oil somehow for geopolitical gain. 

This is pretty much the same conclusion I have come to lately.

[ronwagn + 6,290]

5 minutes ago, Tom Kirkman said:

Seems highly unlikely any time soon.

The Socialist Paradise of Venezuela continues to sink ever deeper into the economic quicksand of Socialist Paradise.

The Socialist Paradise of Venezuela is shining example of the perfection of Socialism done correctly.

So long as Venezuela continues to embrace the lovely Paradise Ideals of Socialism, it seems pretty remote that the oil industry will recover in that country.

I was thinking in a post Maduro capitalist Venezuela. 

[Old-Ruffneck + 1,246]

21 minutes ago, ronwagn said:

I was thinking in a post Maduro capitalist Venezuela. 

Uh, Ron......the guy is "dug in like and Alabama tick". Unless the US goes there (highly unlikely) I think Maduro is going to be the acting Leader as all his army is still behind him. So no think Oil from Venezuela anytime soon.

[Tom Kirkman + 8,860]

20 minutes ago, Old-Ruffneck said:

Uh, Ron......the guy is "dug in like and Alabama tick". Unless the US goes there (highly unlikely) I think Maduro is going to be the acting Leader as all his army is still behind him. So no think Oil from Venezuela anytime soon.

Agreed.

[Douglas Buckland + 6,308]

First, I would not be surprised (and have said before on this site) if the shale oil miracle is simply being used to drive foreign policy. Not that this is a bad idea as long as we realize that is what is happening and have a plan going forward.

Second, for months now we have discussed the price of oil and the state of our industry in regards to the impact of the shale oil industry in the US, the actions taken by OPEC+, and the geopolitical ramifications of the trade war, the ongoing mess in Venezuela, the Iranian situation, the Libyan civil war, etc...

All, except the shale oil issue, I would term as 'external stimuli' (for lack of a better term). If these external stimuli are all resolved in roughly the same time period and global demand does not increase appreciably, then the world will be awash in oil again.

The future looks bleak to me.

Comments?

[Tom Kirkman + 8,860]

16 minutes ago, Douglas Buckland said:

All, except the shale oil issue, I would term as 'external stimuli' (for lack of a better term). If these external stimuli are all resolved in roughly the same time period and global demand does not increase appreciably, then the world will be awash in oil again.

The future looks bleak to me.

Comments?

I remain optimistic for the oil industry.

It seems unlikely to me that the myriad of global "external stimuli" will get resolved any time soon. 

Actually, I expect global politics around oil to get stirred up even more.  Canada's federal elections are in October.  Iran is trying dang near everything to increase turmoil.  Hard Brexit is coming.  All of these political turmoils seem unlikely to me to allow oil prices to collapse for any extended period of time, and I am still expecting oil prices to rise again soon due to some kind of combinations of political instability.

Yes, I'm aware that I have a minority viewpoint.

[Douglas Buckland + 6,308]

13 minutes ago, Tom Kirkman said:

I remain optimistic for the oil industry.

It seems unlikely to me that the myriad of global "external stimuli" will get resolved any time soon. 

Actually, I expect global politics around oil to get stirred up even more.  Canada's federal elections are in October.  Iran is trying dang near everything to increase turmoil.  Hard Brexit is coming.  All of these political turmoils seem unlikely to me to allow oil prices to collapse for any extended period of time, and I am still expecting oil prices to rise again soon due to some kind of combinations of political instability.

Yes, I'm aware that I have a minority viewpoint.

I am holding out for a resolution of the US/China trade war and a sharp jump in the global economy and the resulting demand increase. Fingers crossed...

[Mehrdad Nematollahi + 4]

Iran oil export   IS NOT ZERO  ,AS JOHN BOLTON  WISHES !

Already  Iran is exporting . The thing is  :  TRUMP  STILL DOES NOT KNOW  "OIL  MAFIA "!!

SO  TRY  PERMIAN OIL !  DO NOT WORRY  ABOUT IRAN.

[footeab@yahoo.com + 2,192]

3 hours ago, ronwagn said:

What if Venezuela eventually gets back in the business!

 

Won't.  Maduro and his 'alternate' have same policies but only with a different face.