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Oil Prices
| December 30th, 2014 at 12:27:19 PM permalink | |
| DRich Member since: Oct 24, 2012 Threads: 51 Posts: 4961 | Why do you think oil prices are so low now and how low do you think they will go in 2015? I suspect the US government made a deal of some sort with the Saudi's to keep production up just to hurt the USSR. My guess is a low of $48 for Brent Crude Oil in 2015. At my age a Life In Prison sentence is not much of a detrrent. |
| December 30th, 2014 at 1:15:16 PM permalink | |
| AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18204 |
Prices will fall to the low $50s maybe even $48 and then slowly climb back. At the moment one issue is that the USA has lots of shut-in oil being produced with limited refineries that can handle it. Deal with that Saudis to hurt the Russians? Party like it's 1985! The President is a fink. |
| December 30th, 2014 at 3:01:04 PM permalink | |
| petroglyph Member since: Aug 3, 2014 Threads: 25 Posts: 6227 |
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| January 13th, 2015 at 9:01:18 AM permalink | |
| reno Member since: Oct 24, 2012 Threads: 58 Posts: 1384 | One of the theories floating around is that the Arab oil kings are unwilling to cut production because in a roundabout way, they benefit from cheap oil. Low prices will devastate the new unconventional oil fields (tar sands, shale oil) being produced in unlikely places like North Dakota. Fracking & horizontal drilling is expensive, so the North Dakota fields are only profitable if the market price stays above, say, $70/barrel. Saudi Arabia might be hurt in the short term by $45/barrel oil, but in the long run the Saudis gain market share as the small companies in North Dakota cut production and go bankrupt. I don't buy it. Maybe the Saudis sincerely believe this strategy will pay off, but it can't work in the long run because eventually (1 year? 2 years? 5 years?) the price will skyrocket again up to $80 or $90 or more. The roller coaster will continue. And when that happens, the shale oil production will resume again regardless of whether the smaller companies have long since gone bankrupt. Even if a company goes out of business, the oil will still be there underground... just waiting to be drilled. ***** A lot of critics are aghast that GM foolishly announced a $37,000 electric car (the Bolt) with 200 miles of electric range set to go on sale in 2017. True, the timing of the announcement is terrible, with oil prices plummeting. But if you were an executive at an enormous car company would you really want to gamble that gasoline will stay at $1.99 forever? Anyone want to place a bet on the price of gasoline in 2017? (No thanks.) A diverse product line (from the Chevy Suburban to the Chevy Volt) flexible enough to accomadate any oil price is the only safe, conservative option for a big car maker.  |
| January 13th, 2015 at 9:56:36 AM permalink | |
| AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18204 |
The oil blog I am on a guy claims shale oil will be viable at $15/bbl in a few years. If that is even close to right the question is what happens to the oil kingdoms? I read once where Israel could have the shale oil reserves of Saudi Arabia. Wouldn't that be nice! The President is a fink. |
| January 13th, 2015 at 1:55:23 PM permalink | |
| Fleastiff Member since: Oct 27, 2012 Threads: 62 Posts: 7831 | When prices were high, Saudi Arabia and others agreed on certain limits and the others always cheated which meant Saudi Arabia had to pump less oil. When wars were fought leaders gave Cadillacs to the families of the fallen and later Chevrolets, but those cars were paid for by the Saudis as were the wars. When prices were low as in early seventies, Texas and Oklahoma equipment rusted and oil service personnel went on welfare since their entire industry was dead and it was to expensive to buy diesel fuel to run the pumps in the East Texas oil fields. So exploration in the USA suffered. The Saudis get tired of being the swing vote all the time and now have to fight their own terrorism wars, even sending women who drive cars into terrorism court. Think back to the late seventies when Arabs bought all that sugar. They didn't need it, they just wanted to drive world wide commodity prices up. No supply and demand figures justified it. Saudi Arabia wants to play the game. You know the power a deep stack has in the poker world. |
| January 26th, 2015 at 12:52:38 PM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
So it went from $115 in June 2014 to $45 today because of a well organized scheme to bankrupt alternative sources? I generally don't buy those theories. For starters they would be true last year or the year before or the year before that. It involves a level of organization and a simultaneous decision that the threat from tar sands and shale oil is so severe that x numbers of years at deflated price will put the alternative industry permanently dead. I tend to think the explanation is simpler as individual interests at OPEC just keep production quotas at bay. Coupled with a relatively mild winter and a weak economy. http://www.economist.com/blogs/economist-explains/2014/12/economist-explains-4 |
| January 26th, 2015 at 1:49:02 PM permalink | |
| AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18204 |
It does not need to be all that well-organized. Saudi Arabia, Kuwait, and the UAE can just loosely agree to give the new players "a good sweating." And it doesn't have to be a "plan" but just a decision to defend market share instead of prices. The President is a fink. |
| February 2nd, 2015 at 9:17:28 AM permalink | |
| reno Member since: Oct 24, 2012 Threads: 58 Posts: 1384 | Didn't see this coming. Oil workers are currently on strike at U.S. refineries that account for 10 percent of domestic production. It's the biggest oil industry labor strike since 1980. While only one of the nine plants has curbed production amid the stoppage, a full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel output. Should be interesting to see who blinks first. |