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OT: Let's talk about oil/gas prices
Posted on 1/26/15 at 3:33 pm
Posted on 1/26/15 at 3:33 pm
What are yall's thoughts?
Having interest in oil, I personally hate seeing prices this low.
Example: When oil was $80 bbl
If I had 200bbl's of oil to sell to say, Lion Oil in El Dorado...Lion Oil doesn't give market value, but instead pays $68/bbl.
So, now, WTI index is $45, Lion is only paying say, around $32-35/bbl.
That is a killer
Anyone here in the oil and gas industry? Interested in your thoughts.
Having interest in oil, I personally hate seeing prices this low.
Example: When oil was $80 bbl
If I had 200bbl's of oil to sell to say, Lion Oil in El Dorado...Lion Oil doesn't give market value, but instead pays $68/bbl.
So, now, WTI index is $45, Lion is only paying say, around $32-35/bbl.
That is a killer
Anyone here in the oil and gas industry? Interested in your thoughts.
Posted on 1/26/15 at 3:44 pm to Hawgeye
All I know is this is what the hubs paid for gas today!

Posted on 1/26/15 at 3:50 pm to Miz Piggy
I love it. I love being able to fill my car up for a reasonable price again. I hope it stays this way for as long as I live.
Posted on 1/26/15 at 3:51 pm to beebefootballfan
Yeah, he has an Avalanche - was costing us $120/pop when gas was around $4/gallon. Today was AWESOME!
This post was edited on 1/26/15 at 7:20 pm
Posted on 1/26/15 at 3:52 pm to beebefootballfan
Just curious, but how much does the current price save you per month?
Posted on 1/26/15 at 3:54 pm to Hawgeye
This may be the cheapest that gas will cost during the remainder of my lifetime, and I don't even own a car.



Posted on 1/26/15 at 3:57 pm to Hawgeye
Over the last few weeks.....
9,000 employees have lost their jobs at Schlumberger
7,000 employees have lost their jobs at Baker Hughes
15,000 employees have lost their jobs at Nabors and Patterson UTI
1,000 employees have lost their jobs at Halliburton
Helmerich & Payne IDC will have 43% of their drilling rigs idle by the end of this month.
9,000 employees have lost their jobs at Schlumberger
7,000 employees have lost their jobs at Baker Hughes
15,000 employees have lost their jobs at Nabors and Patterson UTI
1,000 employees have lost their jobs at Halliburton
Helmerich & Payne IDC will have 43% of their drilling rigs idle by the end of this month.
This post was edited on 1/26/15 at 4:01 pm
Posted on 1/26/15 at 4:00 pm to Hawgeye
Is that just in the US?
I should care, considering I inherited a shite ton of Exxon and Chevron stock from my grandparents. Fortunately, my financial advisor has spent the last few years diversifying my portfolio, so my care level is pretty low. I'm sure it will go back up and down a few times before I'm ready to retire on it.
I should care, considering I inherited a shite ton of Exxon and Chevron stock from my grandparents. Fortunately, my financial advisor has spent the last few years diversifying my portfolio, so my care level is pretty low. I'm sure it will go back up and down a few times before I'm ready to retire on it.
Posted on 1/26/15 at 4:04 pm to Miz Piggy
Yes, that's just in the United States.
That's also just reported jobs. Within the next month or so, you will likely start seeing smaller oil companies folding.
My problem is that we are allowing the Saudi's to dictate this issue.
Also, our president is trying to prevent drilling in portions of Alaska by making it a protected wildlife area.
That's also just reported jobs. Within the next month or so, you will likely start seeing smaller oil companies folding.
My problem is that we are allowing the Saudi's to dictate this issue.
Also, our president is trying to prevent drilling in portions of Alaska by making it a protected wildlife area.
Posted on 1/26/15 at 4:14 pm to Hawgeye
And yet, as a consumer driven economy, the US economy as a whole benefits when oil prices are low.
Also, "logic" but.. shouldn't preventing drilling in portions of Alaska HELP oil prices?
The problem isn't Saudi Arabia.. it's the rampant increase in production by the world's largest oil producing nation (That's us) who has doubled production in the past 5 years and the lack of increase in demand worldwide relative to the production numbers.
It's not like the shale is going anywhere. Those jobs will pick right back up when oil prices rebound at some point. Right now though the world economy is slowing (the US economy is outpacing world growth... that's not something a developed nation should do).
The main global downside to cheap oil is continuing to frick up our climate.
Also, "logic" but.. shouldn't preventing drilling in portions of Alaska HELP oil prices?
The problem isn't Saudi Arabia.. it's the rampant increase in production by the world's largest oil producing nation (That's us) who has doubled production in the past 5 years and the lack of increase in demand worldwide relative to the production numbers.
It's not like the shale is going anywhere. Those jobs will pick right back up when oil prices rebound at some point. Right now though the world economy is slowing (the US economy is outpacing world growth... that's not something a developed nation should do).
The main global downside to cheap oil is continuing to frick up our climate.
Posted on 1/26/15 at 4:14 pm to Hawgeye
The Saudis do not like U.S. oil production. They can also stick it to Russia and Iran whose economies are based on oil prices being around one hundred dollars a barrel.
Our government is also already talking about raising gas taxes since people were managing to pay for gas before the price dropped they think they can raise taxes without people being upset since the price should still be lower than it was.
Just a dumb ole redneck's opinion.
Our government is also already talking about raising gas taxes since people were managing to pay for gas before the price dropped they think they can raise taxes without people being upset since the price should still be lower than it was.
Just a dumb ole redneck's opinion.
Posted on 1/26/15 at 4:21 pm to Hawgeye
quote:Wouldn't opening up new areas for drilling just contribute to keeping the prices low?
Yes, that's just in the United States.
That's also just reported jobs. Within the next month or so, you will likely start seeing smaller oil companies folding.
My problem is that we are allowing the Saudi's to dictate this issue.
Also, our president is trying to prevent drilling in portions of Alaska by making it a protected wildlife area.
Regarding the Saudis dictating the issue--I'm not sure that's true. Supply is up, thanks to the US emerging as the world's largest producer of oil. Demand is down due to economic slowdowns in Europe and Asia.
It's true that the Arab states have not cut production in order to keep prices higher, but their behavior isn't what introduced the price fall. They just haven't done anything to stop it. For that matter, neither has the US.
This post was edited on 1/26/15 at 4:22 pm
Posted on 1/26/15 at 4:25 pm to Miz Piggy

Posted on 1/26/15 at 4:27 pm to Hawgeye
Article from 2010, but still relevant, especially considering the low gas prices we saw back in '08/'09 I think it was.
LINK
I hate for any decent person to lose their job, but oil and gas over the long term is a very lucrative business and the price will surely go back up and the jobs will surely come back. In the meantime, I'm enjoying the $ that stays in my pocket instead of going into my tank.
quote:
Big Oil has made Big Money over the last decade. In fact, the last five years proved to be some of the most profitable for any U.S. industry ever. Within the last decade the price per barrel of oil has gone from roughly $23 to $80, with prices gushing as high as $140, causing the already lucrative oil industry to rake in even more cash.
In 2008, Exxon posted the largest annual corporate profit in U.S. history at $45.2 billion; a 155% increase in profit from the decade’s start. In the same year, international oil giants Shell and BP raked in $31 billion, and $25 billion respectively, and Chevron became the second most profitable company in the U.S. with $24 billion in profits; a 360% increase from 2000. Overall, the top five oil companies recorded cumulative profits of nearly $560 billion from 2005 to 2009.
While Big Oil has been shattering financial records, the industry has continued to drill into generous taxpayer-funded subsidies. Since 1940, more than $360 billion worth of taxpayer subsidies and loopholes have lined the pockets of oil and gas corporations, with an additional $23 billion projected over the next five years. These preferences have only padded the high returns enjoyed by the industry. According to the Office of Management and Budget: “Domestic oil and gas production subsidies generally do not significantly reduce the prices that consumers pay for products such as gasoline or home heating oil, resulting primarily in higher returns to the industry.”
LINK
I hate for any decent person to lose their job, but oil and gas over the long term is a very lucrative business and the price will surely go back up and the jobs will surely come back. In the meantime, I'm enjoying the $ that stays in my pocket instead of going into my tank.
Posted on 1/26/15 at 4:35 pm to Killean
quote:
And yet, as a consumer driven economy, the US economy as a whole benefits when oil prices are low.
Not really. Since 2007, shale states added 1.36 million jobs.
When oil bottomed out in 2008, what happened to our economy?
quote:
Also, "logic" but.. shouldn't preventing drilling in portions of Alaska HELP oil prices?
No. Drilling is currently going on in the portion of Alaska Obama is trying to make a wildlife refuge. Our country does not need to be dependent on foreign oil.
quote:
The problem isn't Saudi Arabia..
Of course they are the problem. They control the oil market all across the world. Oil cartels are worst than Mexican drug cartels.
There is oil all throughout Mexico. Why do you think America has done its part in not allowing any exploration in Mexico?
quote:
it's the rampant increase in production by the world's largest oil producing nation (That's us) who has doubled production in the past 5 years and the lack of increase in demand worldwide relative to the production numbers.
Yes, we are now the worlds #1 producer of oil. It hasn't always been like that, though. Which is why Saudi still is trying to control the market by driving oil prices down.
Saudi oil companies can break even around $15/bbl. Where US oil companies break even point is around $40/bbl.
My problem with this is that at some point we need to separate ourselves from the Saudi's and control our own market.
quote:
It's not like the shale is going anywhere. Those jobs will pick right back up when oil prices rebound at some point
Sure they will, at some point. Until then, these families will be on some sort of government assistance until the jobs pick back up.
Posted on 1/26/15 at 4:35 pm to Hawgeye
I don't give a frick about rich people losing money. I'm saving money and it's awesome.
Posted on 1/26/15 at 4:36 pm to Hog on the Hill
quote:
Wouldn't opening up new areas for drilling just contribute to keeping the prices low?
These areas aren't "new" areas. They are currently being drilled and produced.
Posted on 1/26/15 at 4:37 pm to The_Joker
quote:
I don't give a frick about rich people losing money. I'm saving money and it's awesome.
Most of the jobs being lost right now aren't rich people.
Probably along the lines of $40-$70k a year folks.
Posted on 1/26/15 at 4:40 pm to Hawgeye
quote:
My problem is that we are allowing the Saudi's to dictate this issue.
What is the alternative? The Saudis have been very clear that they are focused on protecting their market share over the past decade, it just became much more clear to the west recently. Do you actually want the US to start taking political or economic shots at the only Islamic, middle eastern country we have positive relations with?
Many have made the argument, which I see a lot of credence in, that a large amount of this run up in the price of oil since say 2003/2004 was due to was sheer speculation from not only the financial traders but the physical traders. It was hard to find somebody who was net short oil for years. Oil curves are generally in contango, which means you'll get negative roll yield by holding it (i.e. the price of futures contracts are higher than spot price). However, price appreciation from the mid 2000's run-up more than overcame your negative roll yield over that time. 2008 obviously busted the 2007 ~$140 barrel stupidity but then a lot other players and primary dealers started buying up storage units and other inventory infrastructure on the LME (Goldman was singled out in the media but they were not alone by any means). The popular opinion is they were manipulating commodities markets (although that really wasn't true, they only were accused in the aluminum markets), but to stay on topic here the end result throughout all of this is you did have more of a price support from physical and financial speculation.
Finally when the US energy supply increase starting significantly outpacing our demand dynamics, the Saudi's started to protect their market share. Net longs got smoked, levered players had to start unwinding, and here we are. Personally, I doubt we ever see $100 WTI within the next 5 years outside of a massive geopolitical event. $60-$80 a barrel range is perfectly fine for the US shale industry, in fact it keeps most companies from doing extremely capital intensive projects (e.g. deep water drilling). $40-$60... eh... not only will US shale producers have issues but the Lat Am will be even worse (Pemex, Petrobras) not to mention Russian (Gazprom).
This post was edited on 1/26/15 at 4:43 pm
Posted on 1/26/15 at 4:40 pm to Hawgeye
Sucks for them but shite happens. It's no different in my mind than any other market tanking and people losing their jobs, except this time I benefit. Sorry, I love it.
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