Oil Prices

[wsushox1]

Latest forecasts are that oil will remain at less than $80 per barrel for the remainder of this year and next year. Experts were saying @ $60 it would take 6 months to recover back into the $70's. Now that it's below $50, probably longer.

I thought that $50 would be some sort of a floor, but it doesn't appear to be the case.

How quick it goes back up will depend on how long it takes to bottom out, but I'd say that gas will be no more than $2.50/gallon for regular for the rest of the year.

Too bad if you're a diesel/premium user, the prices for those two varieties are not dropping as quickly. Premium is maintaining a hefty spread over regular and diesel is even worse.

You would think that $40 dollars would have to be the floor but 30 dollars is being thrown around now. 200 oil rigs are going to be shut down this year. As good as low oil prices are for the common consumer, it's not good for the overall economy...especially in energy dependent states.

Texas WTI closed at 48.02 today. Crazy low.

[WstateU]

Latest forecasts are that oil will remain at less than $80 per barrel for the remainder of this year and next year. Experts were saying @ $60 it would take 6 months to recover back into the $70's. Now that it's below $50, probably longer.

I thought that $50 would be some sort of a floor, but it doesn't appear to be the case.

How quick it goes back up will depend on how long it takes to bottom out, but I'd say that gas will be no more than $2.50/gallon for regular for the rest of the year.

There are no ‘experts’ in the oil and gas industry. This guy knows about as much as they do...

[Play Angry]

FYI the same fellas cited as experts on CNBC and elsewhere were the ones making upward revisions late summer 2008 to call for $210 oil in 2009.

Went to <$40 three months later?

Still an expert.

[Dan]

Many in the Oil Patch going on unemployment.

This stretches well beyond the oil patch unfortunately.

[wsushox1]

FYI the same fellas cited as experts on CNBC and elsewhere were the ones making upward revisions late summer 2008 to call for $210 oil in 2009.

Went to <$40 three months later?

Still an expert.

You are kidding, right?

No one predicted the housing/financial market collapse which is what caused oil prices to plummet.

Weak argument.

[shocka khan]

The lower the price goes, the more I worry that some financial institution out there bet the house that this wouldn't happen.

If the price keeps dropping and this becomes a black swan, there may be another Long Term Capital out there......our government had to prop them up just to keep the whole financial sector from melting down.

And as much as I like cheap gas prices, I really worry about what's going to happen to the economy here in Houston.

[Play Angry]

You are kidding, right?

No one predicted the housing/financial market collapse which is what caused oil prices to plummet.

Weak argument.

Respectfully, you were like 12-13 when the runup from $50 to $140 happened and appear to have no clue how inflated that price action was.

What did your favorite forecasters have oil at back in April?

[Shocker-maniac]

There are no ‘experts’ in the oil and gas industry. This guy knows about as much as they do...

Is that your cuz?

[wsushox1]

Respectfully, you were like 12-13 when the runup from $50 to $140 happened and appear to have no clue how inflated that price action was.

What did your favorite forecasters have oil at back in April?

I apologize if I came across as accusatory or assholeish. I was in and or around that age correct (13-14). However, I'm not totally un-aware of what happened and age doesn't really matter in this case. I wasn't one of those teenagers that played video games and didn't pay attention to the outside world. Inflated price action from speculation and hedge fund managers buying large quantities of oil in the price run up? Chinese demand increase with global production staying stagnant? Continued forecast growth of World GDP and therefore increased energy needs leading to more buying of oil by massive hedge funds?

I don't have a favorite oil forecaster. Haha, I wish I did.

[Play Angry]

Wait, so the housing crash wasn't the only reason oil fell precipitously and there were other contributing factors? Huh :)

The point I am making is that if you rely on analyst upgrades/downgrades/talking points, you are always going to be a day late and a dollar short. They are almost universally late to the game.

Nothing has fundamentally changed since late spring of this year. Russia/ISIS are still assholes and Keystone Phase IV is still dead, and those would normally be excuses for the margin crew to drive the price significantly higher into year end. Find the analyst who was calling for a drop to fifty bones back in May and give that guy a pat on the back. He'll be tough to find though.

The droves who called for it to continue to be range-bound from $100-120 into year end with moderate increases for 2015 and 2016 are the same ones changing their floors and ceilings every other week as the elevator continues heading toward the basement. They are just guessing. Educated guesses, yep, but guesses.

I used to trade oil futures for an investment bank so I can confirm that everyone pretending to have a handle on things is more or less full of ****, FWIW.

[1979Shocker]

Saudi Arabia bets its future on 'Berlin or Bust' oil strategy

http://www.telegraph.co.uk/finance/newsbysector/energy/11321739/Saudi-Arabia-bets-its-future-on-Berlin-or-Bust-oil-strategy.html

Saudi Arabia has won the opening battle of its radical oil strategy by forcing prices lower. But the kingdom is about to enter into a dangerous new phase in its war to regain control of the world’s oil market.

In November, Saudi succeeded in bullying the other members of the Organisation of Petroleum Exporting Countries (Opec) into continuing to pump their current quota of 30m barrels per day (bpd) as its first objective. The strategy born in the palaces of Riyadh has sparked the apparently desired oil price rout, which the kingdom’s veteran oil minister Ali Naimi clearly believes is necessary to shut down the cartel’s biggest rivals in Russia and the shale oil fields of Dakota.

Oil equals political power and influence for Saudi Arabia and a seat at the table of the world’s most powerful nations at the G20. Despite the colossal risks, something had to be done to reverse the tilt towards high-cost production coming from the US and elsewhere to maintain Saudi Arabia’s dominance as the so called global “swing producer”. With 13pc of global oil reserves and the cheapest production costs, the kingdom believes that it can still buy back the market and secure higher prices over the long term.

[shocka khan]

PlayAngry said:
"Nothing has fundamentally changed since late spring of this year. Russia/ISIS are still assholes and Keystone Phase IV is still dead, and those would normally be excuses for the margin crew to drive the price significantly higher into year end. Find the analyst who was calling for a drop to fifty bones back in May and give that guy a pat on the back. He'll be tough to find though."

TOTALLY agree with the Keystone comment. Some of these fiscal conservatives who are pushing this need to have their collective heads examined.

I'm not saying that Keystone should or should not be done, just that it makes absolutely no sense in today's environment. Anyone with a lick of sense can see that this is more 'I can piss up the wall further than Obama' and less that this will guarantee a low-priced stable supply of energy (the soon-to-be dormant oil shale fields in Texas, Pennsylvania and South Dakota) are a better bet.

Making tar sands work will require oil at over $100 per barrel. Technology may push development costs down, but it will take years to get that done.

I'd rather see the money we 'would have' spent on Keystone spent on other governing priorities for the new Republican Congress. To borrow a phrase, this is 'just a pipeline to nowhere'.

[SB Shock]

I'm not saying that Keystone should or should not be done, just that it makes absolutely no sense in today's environment.

I'd rather see the money we 'would have' spent on Keystone spent on other governing priorities for the new Republican Congress. To borrow a phrase, this is 'just a pipeline to nowhere'.

The oil will be extracted with or without the pipeline. The only question is how will will it be moved to the refineries - by pipeline or by rail? Presently it is being moved by rail. I bet if you investigate u will find a bunch of big democratic donor highly invested in moving Canadian oil by rail - maybe I'm wrong. But generally follow the money if u want the true answer.

Correct me if I'm wrong - the U.S. government is not building the pipeline, this is private venture. So somebody has did the calculation and figured out that a pipeline is more efficient. The government has gotten involved because it crosses international borders and there are some domain issues.

The argument about whether shake oil is viable at today prices - well today's prices are today, but does anybody really believe they are going to stay here for a long period of time?

[SHOCKvalue]

The argument about whether shake oil is viable at today prices - well today's prices are today, but does anybody really believe they are going to stay here for a long period of time?

The futures prices indicate they are here at least for a little while. Back in 2008 when we had the big crude price rundown, futures always remained much, much higher. This time futures only exceed spot by a small margin. Obviously, this indicates that the market does not currently see a big rebound coming. This is not to say I am a Keystone opponent, which would be untrue.

EDIT: I'm starting to be of the opinion that what we are seeing is simply a market correction from a 5-10 year bubble. I'm not going to dig up the links or datum, but I have read recently that the inflation-adjusted price of crude over the last several decades is roughly $50/bbl. The crude oil market acts like a sine wave with respect to price, with the wavelength measured in 10-20 year intervals. We are just on the downward slope of the last peak.

[wu_shizzle]

I'd rather see the money we 'would have' spent on Keystone spent on other governing priorities for the new Republican Congress. To borrow a phrase, this is 'just a pipeline to nowhere'.

Of course you think this is a government project, it fits your worldview.

The idea that private enterprise can, or should do projects this large is inconceivable, right?