Oil Prices

[Bibi]

When oil price was 120 during 2007, many predicted it will reach 200 or 300. We know what happen next. No one can predict prices with accuracy. How does IEA know that Middle Eastern OPEC will not decide to reduce output to boost oil price to a level which is still not favorable to shale companies?

How reliable is IEA's oil forecast?

[CY09]

Just curious. What happens if the fall in oil prices triggers a world-wide recession (US Oil exploration industry collapses, creating bad debts or major petroleum companies cutting CAPEX)?

Won't that mean a fall in global demand which will match the fall in supply?

[LionFlyer]

Well, oil prices have fallen already (how we define fallen in the first place), but are you seeing a world-wide recession? Things are not good but it is hardly 1970s all over again.

Anyway, before the IEA analysis came out, the others I have read suggest a 6 month period before bottoming. So either IEA are very sad people or analysis like this is as good as a blind man throwing darts.

[greengiraffe]

The first signs of dawn appears to have broken...

M&A initiatives are already starting to emerge Down Under:

i) Woodside making a discipline bid for Oil Search after buying Apache Energy last yr;

ii) Bruneian led interests making a bid for debt laden Santos;

iii) Beach making a all script merger for Drillsearch

I maintain that oil / gas could have reached an interesting levels for cashed up shrewed companies to start planning for the long term... meaning that they will first aim to cut costs and wait out before making supernormal profits when the cycle kicks in...

Locally, we are also seeing Boustead making a small bid to lead a consortium in Aceh...

Frankly all these are makers... signs... the seriously corporate $ are making their moves on attainable targets to position for the long term...

No agencies or analysts have clues over the exact direction of commodities but the willingness of risks takers to open their wallets must not be ingored...

At this stage or even when oil & gas prices recover say 50% from the bottom, only the strongest E&P players stand to benefit... other O&G service supporters will still have it tough as the massive oversupply will result in shakeouts beyond many's imagination due to the high operating leverage and nature of the essentially cyclical industry...

[BlueKelah]

Well, oil prices have fallen already (how we define fallen in the first place), but are you seeing a world-wide recession? Things are not good but it is hardly 1970s all over again.

Anyway, before the IEA analysis came out, the others I have read suggest a 6 month period before bottoming. So either IEA are very sad people or analysis like this is as good as a blind man throwing darts.

Imho, There has been a global recession since gfc. Its just them central bankers propping up the major economies, much of it through debt. Even mighty usa debt ceiling keeps increasing... If this debt ever get a chance to deleverage, things are gonna get pretty bad.

sent from my Galaxy Tab S

[greengiraffe]

Well, oil prices have fallen already (how we define fallen in the first place), but are you seeing a world-wide recession? Things are not good but it is hardly 1970s all over again.

Anyway, before the IEA analysis came out, the others I have read suggest a 6 month period before bottoming. So either IEA are very sad people or analysis like this is as good as a blind man throwing darts.

Imho, There has been a global recession since gfc. Its just them central bankers propping up the major economies, much of it through debt. Even mighty usa debt ceiling keeps increasing... If this debt ever get a chance to deleverage, things  are gonna get pretty bad.

sent from my Galaxy Tab S

That has been a fact since many ages ago... pretty bad is a simple conclusion... it is what is beyond that matters... 

As long as there is human beings - there is a will, there will be a way... being pessimistic will never help matters...

The main reason why debt ceiling has been lifted is because someone is trying to solve a bigger problem... whether it is an acceptable solution I think any economic solution will cut many ways...

Debt will always need to be repay or being forgiven... US interest rates will be lifted just in what fashion and over what time horizon... The US job scene is telling a positive picture... an huge economy that is firmly back on its feet...

[LionFlyer]

Well, oil prices have fallen already (how we define fallen in the first place), but are you seeing a world-wide recession? Things are not good but it is hardly 1970s all over again.

Anyway, before the IEA analysis came out, the others I have read suggest a 6 month period before bottoming. So either IEA are very sad people or analysis like this is as good as a blind man throwing darts.

Imho, There has been a global recession since gfc. Its just them central bankers propping up the major economies, much of it through debt. Even mighty usa debt ceiling keeps increasing... If this debt ever get a chance to deleverage, things  are gonna get pretty bad.

sent from my Galaxy Tab S

Your most important point, IMO. Basically, money supply have been artificially keeping a sick man alive. This makes the original point, e.g oil prices as a determining factor for recession, less obvious.

[BlueKelah]

Wti back down to 40 level, finally chance to hit 30
sent from my Galaxy Tab S

[greengiraffe]

Wti back down to 40 level, finally chance to hit 30
sent from my Galaxy Tab S

Price of oil down, demand will rise as alternative energy resources remain pale with cost competitiveness and supply will slowly dry up due to curtailing of capex for E&P and entire downstream...

The focus now should be focus on the big M&A on upstream companies and their strategic directions...

The equilibrium over the long term should be near... focus on short term very likely to result in volatility and unnecessary speculative losses...

[greengiraffe]

• Nov 14 2015 at 6:49 AM 
  

US oil rig additions seen providing temporary cash boost

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[img=620x0]http://www.afr.com/content/dam/images/1/3/n/v/n/0/image.related.afrArticleLead.620x350.gkyvcf.png/1447445237862.jpg[/img]US production has remained stubbornly high as new techniques that increase efficiency keep the oil flowing.Bloomberg
by David Wethe
Drillers put rigs back to work in US oil fields after more than two months of pulling back as explorers seek to boost production so they'll have enough cash to pay their bills.
Rigs targeting oil in the US rose by 2 to 574, after more than 100 were idled since the start of September, Baker Hughes said on its website Friday. Natural gas rigs were trimmed by 6 to 193, bringing the total down by 4 to 767. The Eagle Ford Shale in South Texas was the only one of the four major US basins to add an oil rig. There are now 62 working there.
Some analysts shrugged off the decline as only temporary.
"I don't think there's much to it," Chase Mulvehill, an analyst at Suntrust Robinson Humphrey in Atlanta said in a phone interview. "What we're really going to have to pay attention to is the holiday season to see if guys start putting down rigs. The real declines are supposed to happen come Thanksgiving and as we get into the December month."
[img=620x0]http://www.afr.com/content/dam/images/g/k/y/v/i/g/image.imgtype.afrArticleInline.620x0.png/1447444930733.jpg[/img]Upward momentum from August's low has faded. FDC
Explorers are pressing their rig providers to cut rental prices lower so they can afford to keep drilling and producing more oil to boost their cash flow. America's oil drillers have idled more than half the country's rigs since last October as the world's largest crude suppliers battle for market share. The crude being pumped out of US shale formations helped create a global glut that's pushed prices down by more than 50 per cent since June 2014.
"We have been successful at putting a few rigs to work," said John Lindsay, chief executive officer at Helmerich & Payne, one of the largest US onshore drilling contractors. "Our hope is that we could continue to put a couple of rigs to work during the rest of the quarter," Lindsay told analysts and investors Thursday on a conference call.
Despite the cutbacks, US production has remained stubbornly high as new techniques that increase efficiency keep the oil flowing. Output rose by 25,000 barrels last week to 9.2 million barrels a day, according to weekly Energy Information Administration data.
West Texas Intermediate, the US benchmark crude, is up about 6 per cent since hitting the year's low of $US38.24 a barrel on August 24. It fell more than 8 per cent this week, testing $US40 Friday.


Oil prices are trading at their lowest level since August after supplies of the fuel expanded by more than three times the number analysts forecast. Crude stockpiles have risen to a record of almost 3 billion barrels because of strong production in the Organisation of Petroleum Exporting Countries and elsewhere, the International Energy Agency said in its monthly market report on Friday.
"The trend is lower, the bearishness will continue," Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, said by phone. "It's the same story of high supply pushing the oil price lower."





Bloomberg