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RE: OPEC, for some quiet moments.. - admin - 03-26-2015

'Thylacine-2' pid='56427' datel Wrote: This statement doesn't account for the time lag for increased prices to draw more production to the market. The current collapse in oil prices could very well lead to a lack of supply in 2016-17 and a price substantially higher than $100/bbl. Perhaps a price high enough to damage the world economy.

Which statement are you referring to, Thy?




RE: OPEC, for some quiet moments.. - Thylacine-2 - 03-26-2015

'admin' pid='56429' datel Wrote:

'Thylacine-2' pid='56427' datel Wrote: This statement doesn't account for the time lag for increased prices to draw more production to the market. The current collapse in oil prices could very well lead to a lack of supply in 2016-17 and a price substantially higher than $100/bbl. Perhaps a price high enough to damage the world economy.

Which statement are you referring to, Thy?

Opps! Sorry.  That was a pre-coffee post. The disagreement is with the statement  "Oil won’t rebound to $100/bbl because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammed al-Madi, Saudi Arabia’s governor to OPEC."




RE: OPEC, for some quiet moments.. - Putncalls - 03-26-2015

The US frackers can respond to price changes in a timely fashion. We are seeing that now.


RE: OPEC, for some quiet moments.. - admin - 03-26-2015

Ok thanks, Thy, although I probably have to go with put here. Shale producers seem to be more flexible. Nevertheless, Boone thinks $100 is still on the cards by the end of next year:

Oil prices could hit $100 a barrel by the end of next year, U.S. oil magnate T. Boone Pickens said on Tuesday, revising his previous forecast which said they would reach that level as early as this year. "I think you could very well be at $100 a barrel by the end of 2016," the 86-year-old billionaire and chair of BP Capital told an audience of about 100 at the Commonwealth Club of California in San Francisco.

Oil to reach $100 a barrel by end of 2016: Pickens




RE: OPEC, for some quiet moments.. - Thylacine-2 - 03-26-2015

I hope you and Puts are right, Admin. An oil shock to the upside wouldn't be good for anybody.


RE: OPEC, for some quiet moments.. - admin - 03-26-2015

The Bureau of Land Management estimates that the compliance cost for its new policies will run about $11,400 per well, or roughly $32 million per year to the industry in total, the agency wrote in its nearly 400-page final rule, released Friday. On the other hand, an analysis of a draft rule from research and consulting firm Advanced Resources International estimated total annual costs associated with the regulation could range anywhere from $30 million to $2.7 billion in total. And at least one industry group leader puts the cost higher than that.

Annual cost estimates of new fracking rule range from $32M to $2.7B

But there were plenty of jobs over the last several years when oil prices were high even though the export ban was in place. That is because over-supply has lowered oil prices and over-production, not the export ban, is the problem.

Lifting The U.S. Oil Export Ban Is No Solution To Low Oil Prices

The biggest problem with making an economic argument to lift the oil export ban is that U.S. tight oil companies were losing money at WTI oil prices of more than $90 per barrel. The table below summarizes 2014 year-end financial data from the oil-weighted U.S. land-based companies that I follow.

Lifting The U.S. Oil Export Ban Is No Solution To Low Oil Prices

Chesapeake Energy Corp. has reduced its 2015 capital budget—including capitalized interest of $500 million—to $3.5–$4.0 billion for 2015, which is a $500 million reduction from its previous guidance of $4.0–$4.5 billion.

Chesapeake shaves $500 million from budget on low oil price




RE: OPEC, for some quiet moments.. - admin - 03-26-2015

Enough already! Jim Cramer is hearing opinions flying all over the place on the hazards of low oil prices. So here are the facts—not opinion, not speculation—just good, hard facts. Some 16 states benefit from high oil prices, of which six really rely on oil for job growth. Approximately 10 percent of the U.S. lives in those states. That means that even if every one of those people in these states were to get hurt by oil, there are still 290 million Americans who will benefit.

Don't freak out! Here are the facts on oil

America's oil in storage just hit another record after rising for the 11th consecutive week.  Stockpiles rose 8.2 million barrels, or 1.8 percent, to 466.7 million barrels last week, the EIA reported today. Analysts had expected an increase of 4.75 million barrels. The amount of oil the U.S. is cranking out also edged up slightly, for the seventh consecutive week, to a rate of 9.42 million barrels a day.

Oil in Storage Rises More Than Expected Again - Bloomberg Business

That’s where the extra space comes in. There’s the normal “working” capacity. And then there’s “contingency” space, a buffer between the working storage and the tank tops that typically sits empty to keep oil from spilling out. The company that built most of the tanks at Cushing, Oklahoma, the biggest U.S. oil hub, says the buffer is about 3 to 5 percent of storage space. That’s equivalent to about 20 million barrels of room in tanks across the country.

The 20 Million Barrels of Pure Profit Sitting in U.S. Oil Tanks - Bloomberg Business

The oilfield-services industry is bracing for slow business this year after the value of Brent crude sank by about half in 2014. The crash in prices has forced some oil producers to delay or cancel projects, sapping demand for drilling companies and allowing their remaining customers to negotiate cheaper rates.

Cairn Energy sees 50% lower rig cost sustaining Senegal drilling




RE: OPEC, for some quiet moments.. - admin - 03-27-2015

When Whiting Petroleum Corp. put itself up for sale this month, the oil industry appeared on the brink of a deal surge that would dramatically redraw the energy landscape. Instead, Whiting decided it was better off selling shares and borrowing more money to surmount a cash shortfall brought on by tumbling crude prices. The lesson? Takeover fever driven by the oil-market crash is yet to really heat up because share prices haven’t fallen as fast or hard as crude.

Falling knife slashes shale dealmaking as buyers await bottom

Wood Mackenzie's breakeven analysis of more than 800 individual assets in the Lower 48 reveals dramatic variations in the viability of company asset bases and sub-plays. While the majority of production is not at risk in the long term, cash flow and funding limitations could impact activity. "Experts have repeatedly underestimated unconventionals," says Cody Rice, senior analyst Lower 48 upstream research for Wood Mackenzie. "While low prices certainly hurt project economics, reports of the demise of unconventionals have been greatly exaggerated."

Lower 48 oil economics still robust, Wood Mackenzie says

Norway has no plans to reduce output to support crude prices after they plunged 50% in the last nine months. “Limiting Norway’s oil production is not currently on the agenda,” Ella Bye Moerland, a spokeswoman for the Petroleum and Energy Ministry, said in an emailed reply to questions. “A stable oil market with prices at a reasonably high level is important to both oil-producing and oil-consuming countries.”

Norway has no plans to support oil prices by cutting production

Oil climbed to the highest in more than two weeks in London as Saudi Arabia and its allies bombed rebel targets in Yemen, which is near the center of global energy trade. Futures surged as much as 5.8%, paring a monthly decline. Saudi Arabia led a coalition of 10 Sunni-ruled nations in airstrikes against Shiite Houthi positions after an appeal from Yemen’s President Abdurabuh Mansur Hadi. The 10 countries produced about 21 MMbopd in October, or 22% of global supplies, according to Energy Information Administration data.

Oil rises to 2-week high as Saudi Arabia bombs targets in Yemen

A new oil order has arrived and it will be marked by greater uncertainty and generally lower oil prices as the oil industry frantically re-prices as costs decline and gains in efficiency are made, strategists say. As investors continue to weigh up the fallout of a rout in oil prices since June last year, Goldman Sachs has warned that the "level of uncertainty cannot be underestimated as these dynamics spill over into the price of commodities, currencies and consumption baskets around the world, with far-reaching market and economic implications."

How oil is preparing for a new world order




RE: OPEC, for some quiet moments.. - admin - 03-28-2015

And this is all that oil can mount? A meager couple of bucks on the news that the Saudis are going to defend themselves from a possible attack from insurgents based in Yemen? You mean oil can't go considerably above $50, still only slightly more than half of where it was not that long ago, even as combined forces allied with Saudi Arabia have had to coalesce to stop this threat? Welcome to the new world of oil. A world where the U.S. is going to produce more oil this quarter than any time since 1985 and could be producing far more if the price were going to go higher.

Jim Cramer -- Welcome to a New Oil World No Longer Beholden to Saudi Arabia - TheStreet

Total SA is pushing ahead with a $27 billion natural-gas project in the Russian Arctic, but it will seek a big chunk of the financing—as much as $15 billion worth—through Chinese banks in local currency and euros.

Total Seeks $10 Billion to $15 Billion in Chinese Financing for Russian Project - WSJ

But the big market mover in the coming days will be the outcome of the aforementioned negotiations with Iran over its nuclear program. If a deal is reached, oil prices will most likely tank immediately, on the expectation that Iran could soon bring an additional 1 million barrels per day back online with the removal of western sanctions.

Impending Iran Deal Could Crush Current Rally

Argentina, once a regional energy leader, is now better known for financial busts and bombastic politicians than hydrocarbons prospects. Still, with a resource potential both vast and untapped, the nation has never been far from energy investors’ minds. The question today is just how much Argentina is willing to change and how this plays into a low oil price environment that is already negatively impacting investment elsewhere.

Can Argentina Capitalize On Its Vast Shale Reserves?

These are testing times for global economy where a simple question arises: Who benefits the most from cheap oil? The answer is not one but the two Asian Giants: India and China, who are among the biggest global importers of oil.

Who Benefits Most From Cheap Oil?




RE: OPEC, for some quiet moments.. - admin - 03-30-2015

Recently, I have noticed that oil storage & production data (and media hype for that matter) has disconnected from hard data. This has been occurring for many quarters now with the US economy statistics as well and appears to be the new world order where facts can be spun or massaged to any one’s wishes.

U.S. Oil Glut Story Grossly Exaggerated - Yahoo Finance

Gary Evans, CEO of Houston-based energy firm Magnum Hunter Resources (MHR), has a blunt message for OPEC oil ministers hoping to force down prices and drive American competitors out of business. “OPEC is making a huge mistake,” he says. “We made a lot of money with oil at $100 (per barrel), and we’ll become more efficient and make a lot of money at $50.”

How American frackers plan to beat OPEC - Yahoo Finance

U.S. drillers targeting oil idled rigs for the 16th straight week, extending an unprecedented cutback in drilling, and dragging the total rig count down to the lowest level in more than five years. Rigs targeting oil in the U.S. fell by 12 to 813, Baker Hughes Inc. said on its website Friday. Those seeking gas declined by nine to 233, the Houston-based field services company said. The total U.S. count, including two miscellaneous rigs, slipped by 21 to 1,048.

U.S. oil rigs drop for 16th straight week, Baker Hughes says

Chevron Corp. withdrew from a natural gas exploration venture in central Australia, as the second-biggest U.S. energy producer curtails spending. Chevron decided that “the opportunity does not align strategically” with its global exploration and development portfolio, its partner Adelaide-based Beach Energy Ltd. said Friday in a statement.

Chevron pulls out of Australian gas project with Beach Energy

CNOOC, China’s biggest offshore explorer, reported a 6.6% increase in annual profit even as the plunge in crude prices hit explorers across the world. Net income rose to 60.2 billion yuan ($9.7 billion), or 1.35 yuan a share, from 56.5 billion yuan, or 1.26 yuan, a year earlier, according to a statement to the Hong Kong stock exchange. The mean of 24 analyst estimates compiled by Bloomberg was a profit of 52.3 billion yuan. Sales dropped 4% to 275 billion yuan.

Cnooc surprises with 6.6% gain in annual profit as peers slump