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re: OT: Let's talk about oil/gas prices
Posted on 1/27/15 at 7:49 am to Notherdamnhog
Posted on 1/27/15 at 7:49 am to Notherdamnhog
quote:It totally depends on context. If you're in the oil and gas industry, or your work somehow supports the oil and gas industry, then this is undeniably bad for you.
Lower oil and gas prices are good on the surface but not so much when you start peeling back the onion.
For everyone else, it's a good thing. Even though the oil and gas industry is big, it's still a small part of the US economy. The vast majority of Americans aren't getting hurt by this. But obviously it's really painful for those who are close to the industry.
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Posted on 1/27/15 at 8:30 am to Killean
quote:I don't disagree with your statement.
Lower oil prices are beneficial to the economy as a whole.
OP asked for our thoughts and I gave my personal take on the matter. As I'm not the economy as a whole, but one small piece of it, it has not been completely beneficial to me.
Posted on 1/27/15 at 8:57 am to Ray Penpillage
quote:
Not true
Yes it is.
Oil from the sands in Canada have a gravity of less than 10 @ 60 degrees. That is terrible.
As a comparison, oil in West Texas usually runs from 35-45 @ 60 degrees. A much better oil or better suited for being refined for fuels, etc.
Canada sand oil is junk.
Posted on 1/27/15 at 10:28 am to Hawgeye
quote:
We are right near that point now. We feel like it's bottomed out right now, as it continues to hover in mid 40's upper 40's/bbl.
I'd agree we've bottomed out but we don't have the supporting factors, currently nor likely anytime this year or the next, to get to a sustainable $70 level. China still has room to go with their slowdown as they switch their economic models and it'll take time for financial speculation to come back considering the supply glut we currently have.
If you want to talk about a single factor that has a much larger affect on the United States I'd be more focused on the dollar index sitting close to 94 right now. Ahhh... don't you love those fricking pundits who pounded the table for 5 years about the Fed sinking the dollar...
Posted on 1/27/15 at 10:35 am to BennyAndTheInkJets
Read something that some Saudi said he believed $200/bbl was in the near future.
I think he is wrong, but theyre also anticipating a bounce back pretty soon it seems.
I think he is wrong, but theyre also anticipating a bounce back pretty soon it seems.
Posted on 1/27/15 at 10:43 am to Hawgeye
quote:
Read something that some Saudi said he believed $200/bbl was in the near future.
That was El-Badri, and he wasn't saying that he believed $200 a barrel was in the future, he was saying oil had the potential to climb to that if there was no new supply investment.
You have to know which members of the Saudi family you should listen to, as well as the context. Alwaleed bin Talal said just a few weeks ago that we'd never see $100 a barrel again.
Now I'd give more credence in a vacuum to El-Badri but just going off one or two news stories doesn't give you much of a picture at all with the Saudis. It's truly a mosaic answer, most of the important information will not be shared through large public news outlets.
Posted on 1/27/15 at 11:04 am to BennyAndTheInkJets
No, I know.
IT was something I was just throwing out there. Stupid speculation, which is why I said it wouldn't happen.
Right now, there seems to be Saudi's in agreement that oil is in fact getting too low.
IT was something I was just throwing out there. Stupid speculation, which is why I said it wouldn't happen.
Right now, there seems to be Saudi's in agreement that oil is in fact getting too low.
Posted on 1/27/15 at 11:07 am to BennyAndTheInkJets
I wouldn't expect oil to break $70 a barrel this year. The global economic outlook isn't good enough to push demand up. The US Economy is also outperforming which is driving the value of the dollar up and keeping oil prices low.
Being Americans, we overlook the fact that the value of the dollar has increased so much, particularly in oil producing countries..
The Ruble, which Russia uses to pay its financial obligations, has lost about half it's value in the time that Oil has gone from $100 to $40 a barrel.
That means for Russian domestic purposes that Oil has gone down 20% instead of 60% :)
Oil isn't as low as we think it is.. our dollar is just considerably higher than it was.
Being Americans, we overlook the fact that the value of the dollar has increased so much, particularly in oil producing countries..
The Ruble, which Russia uses to pay its financial obligations, has lost about half it's value in the time that Oil has gone from $100 to $40 a barrel.
That means for Russian domestic purposes that Oil has gone down 20% instead of 60% :)
Oil isn't as low as we think it is.. our dollar is just considerably higher than it was.
Posted on 1/27/15 at 11:10 am to Hawgeye
I have a friend who works in Houston. In November he called and said there were 5-6 shipments of oil just sitting out in the bay area there.
One thing that may be of interest to any "market" players, would be looking at publicly traded shipping companies who can handle millions of bbls that ship and will make money holding that oil for 6 months.
It is something that piqued my interest back before Thanksgiving, but really didn't give it much thought. I knew there was an over supply of oil here, which is what I associated that with. Looking back, it may have been oil companies seeing a larger return in the long run, just holding on to that oil and paying a "daily fee" than going ahead and selling at that time.
I haven't talked to him since Christmas, so Im not sure if anything is still sitting idle down there.
You seem to act like you play the market, so I was curious what your thought would be on something like that. These shipments are large amounts of oil.
Another thing that will start to play into this is our friends in South America. It will be interesting to see what comes of those there. They tend to act a fool when things do not go the way they want it. I know a lot of shipments(ocean)sometimes have to have escorts just to get in and out of ports there.
One thing that may be of interest to any "market" players, would be looking at publicly traded shipping companies who can handle millions of bbls that ship and will make money holding that oil for 6 months.
It is something that piqued my interest back before Thanksgiving, but really didn't give it much thought. I knew there was an over supply of oil here, which is what I associated that with. Looking back, it may have been oil companies seeing a larger return in the long run, just holding on to that oil and paying a "daily fee" than going ahead and selling at that time.
I haven't talked to him since Christmas, so Im not sure if anything is still sitting idle down there.
You seem to act like you play the market, so I was curious what your thought would be on something like that. These shipments are large amounts of oil.
Another thing that will start to play into this is our friends in South America. It will be interesting to see what comes of those there. They tend to act a fool when things do not go the way they want it. I know a lot of shipments(ocean)sometimes have to have escorts just to get in and out of ports there.
Posted on 1/27/15 at 11:13 am to Killean
quote:
The Ruble, which Russia uses to pay its financial obligations, has lost about half it's value in the time that Oil has gone from $100 to $40 a barrel. That means for Russian domestic purposes that Oil has gone down 20% instead of 60% :)
Russia is going to see more of an impact in the next month or so.
As I stated earlier in the thread, a lot of American based companies are ramping up their production of natural gas to offset any losses they have from oil.
West Texas for example, produces a large percentage of America's oil. What they have done over the last 3-4 years, is burn off all of the natural gas that has been in these production zones. Now, those companies are ramping their natural gas production back up.
Posted on 1/27/15 at 11:21 am to Killean
quote:
Being Americans, we overlook the fact that the value of the dollar has increased so much, particularly in oil producing countries..
quote:
If you want to talk about a single factor that has a much larger affect on the United States I'd be more focused on the dollar index sitting close to 94 right now. Ahhh... don't you love those fricking pundits who pounded the table for 5 years about the Fed sinking the dollar...
Posted on 1/27/15 at 12:03 pm to BennyAndTheInkJets
quote:hurf durf quantitative easing Ron Paul shadowstats INFLATION
If you want to talk about a single factor that has a much larger affect on the United States I'd be more focused on the dollar index sitting close to 94 right now. Ahhh... don't you love those fricking pundits who pounded the table for 5 years about the Fed sinking the dollar...
edit: end the fed
This post was edited on 1/27/15 at 12:06 pm
Posted on 1/27/15 at 12:47 pm to Hog on the Hill
so sad... Jed wouldn't be a millionaire in today's world....
Posted on 1/27/15 at 2:37 pm to Razorback Reverend
Honest question for you expuhts. If you had new money to invest and didn't need to touch it for a few years - why wouldn't you put every penny in oil futures? Cash out when it hits $80, and have nearly double the money.
Posted on 1/27/15 at 2:46 pm to Vetrock
and???
Posted on 1/27/15 at 3:34 pm to Vetrock
quote:
Honest question for you expuhts. If you had new money to invest and didn't need to touch it for a few years - why wouldn't you put every penny in oil futures? Cash out when it hits $80, and have nearly double the money.
Because:
1. Oil futures don't pay you interest or a dividend, hence you don't get paid investment income if nothing changes. In fact, oil futures are in contango, which means if nothing happens at all to futures/spot prices, you end up getting a negative yield for holding till close to delivery.
2. You actually can't invest in oil futures contracts unless you can trade on a commodities exchange. The best you can do as a retail investor is invest in some sort of ETF or in the equity/debt of an oil related company, both of which carry their own idiosyncratic risks compared to the commodity itself.
3. I can't find data anywhere that tells me exactly what the price of something will be in 2 years. I've looked everywhere. If you know a Bloomberg function that I don't please share. Benny will be your new Arkansas bag man, 5 star croots errwhere.
This post was edited on 1/27/15 at 3:35 pm
Posted on 1/27/15 at 3:43 pm to BennyAndTheInkJets
quote:
BennyAndTheInkJets
Always enjoy your posts on the Money board, thanks for the contributions.
Posted on 1/27/15 at 6:20 pm to Hawgeye
quote:
Canada sand oil is junk.
If you're only refining to produce gasoline and diesel, then sure you won't get as far with bitumens. But refineries are built to extract value from crude in its entirety. To maximize revenue refineries want to run maximum capacity for every unit at the plant. This requires blending. Heavy crudes, like your sub 10 API bitumens, will be blended with lighter stocks to maximize throughput for all units at the refinery. Moreover, refineries use various forms of cracking to turn long carbon chains into shorter chains, which can then be used for gasoline and diesel blending.
Posted on 1/27/15 at 6:54 pm to Ray Penpillage
Ray.... English Please...
Posted on 1/27/15 at 7:10 pm to Razorback Reverend
quote:
Canada sand oil is not junk.
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