Oil Prices

[specuvestor]

[quote pid='126685' dateline='1456998620']
http://money.cnn.com/2016/03/01/investin...cord-opec/
Sorry, OPEC: U.S. oil production at 43-year high

The reality is actually that US oil production peaked in 3Q15 and moving towards 9m bpd... estimated 9.077m bpd last week:
http://www.eia.gov/petroleum/weekly/crude.cfm

Numbers can be misleading unless one knows the details and context

Nonetheless as per my previous posts in this thread I had expected it to peak earlier in 2Q15 and indeed to be below 9m bpd by 2015 end. I had never expected WTI to trade below $40 and this has been my worst trade in 2015.

Bakers Hugh horizontal oil rig count is now 397 about the same level in 2009 after a peak of almost 1400. Baffling to me even today why US production is so resilient.

[sck]

Below link has an interview with Art Berman on oil.

www.macrovoices.com


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[BlueKelah]

[quote pid='126685' dateline='1456998620']
http://money.cnn.com/2016/03/01/investin...cord-opec/
Sorry, OPEC: U.S. oil production at 43-year high

The reality is actually that US oil production peaked in 3Q15 and moving towards 9m bpd... estimated 9.077m bpd last week:
http://www.eia.gov/petroleum/weekly/crude.cfm

Numbers can be misleading unless one knows the details and context

Nonetheless as per my previous posts in this thread I had expected it to peak earlier in 2Q15 and indeed to be below 9m bpd by 2015 end. I had never expected WTI to trade below $40 and this has been my worst trade in 2015.

Bakers Hugh horizontal oil rig count is now 397 about the same level in 2009 after a peak of almost 1400. Baffling to me even today why US production is so resilient.

[/quote]
yup it seems that the leftover 397 rigs are producing very well and could maintain at this high 9m or 8m+ level for a while, especially if oil price goes up a bit or if they do their hedging well. this probably demonstrates the power of shale oil technology. The thing is if US company export this technology to other countries like Russia and OPEC and south America, we could see a rise in oil supply even if rig numbers go down a bit globally!! If $40+ is profitable for shale in USA, then $30+ could be profitable in 3rd world countries with cheaper labour and other costs.
http://www.wsj.com/articles/after-the-ca...1453162664
[Yet industry experts at RBN Energy foresee vast swaths of American shale profitable at just north of $40 a barrel. And it can come online extremely quickly.]

So US shale will actually cap the upper end of the oil market at $40 in the near future.


well since i dun short and only long stuff, I am still waiting for more brankruptcies to happen and more s**t to hit the fan, only then would oil be near the cyclical bottom where it will probably remain for at least 1-2 years, plenty of time to pick up solvent cheap OnG stocks. Based on historical price its very possible for oil to go back to 20s or even 10s level. OF course that would need and oversupply which we now have together with a sudden demand contraction like another GFC (which is getting more likely everyday as we are getting into the historical timeframe for another crash already)

[sgd]

Here is the proof why I say earlier that oil prices and markets are rigged or manipulated.

If current low oil prices due to glut is causing prolonged recession or depression when you see layoffs everywhere what about high oil prices?

In LKY 1973 speech he says prolonged arab 'cut backs' on supplies back then causing prolonged recession and  depression  

https://wikileaks.org/plusd/cables/1973S...559_b.html


So if both glut and shortages of oil causes recession what gives?

[corydorus]

Low Oil Price definitely will help the broad economy however it will takes time to go through because we have quite an amount of industries that have have hinged on High Oil Price to prosper which indirectly cause pain through inflation/expense to social.

While Salary increment maybe mute on average, we are seeing more cost/efficiency. Therefore I am rather positive of the near and mid future, and thus Stock Market.

[CY09]

Hi Cory, the sgx has a large portion of commodities and og support coy. This will affect sgx. Similarly our country relies on property and oil gas a lot. Hence global stock market may reflect your views but definitely not Singapore

[specuvestor]

[quote pid='126685' dateline='1456998620']
http://money.cnn.com/2016/03/01/investin...cord-opec/
Sorry, OPEC: U.S. oil production at 43-year high

The reality is actually that US oil production peaked in 3Q15 and moving towards 9m bpd... estimated 9.077m bpd last week:
http://www.eia.gov/petroleum/weekly/crude.cfm

Numbers can be misleading unless one knows the details and context

Nonetheless as per my previous posts in this thread I had expected it to peak earlier in 2Q15 and indeed to be below 9m bpd by 2015 end. I had never expected WTI to trade below $40 and this has been my worst trade in 2015.

Bakers Hugh horizontal oil rig count is now 397 about the same level in 2009 after a peak of almost 1400. Baffling to me even today why US production is so resilient.

yup it seems that the leftover 397 rigs are producing very well and could maintain at this high 9m or 8m+ level for a while, especially if oil price goes up a bit or if they do their hedging well. this probably demonstrates the power of shale oil technology. The thing is if US company export this technology to other countries like Russia and OPEC and south America, we could see a rise in oil supply even if rig numbers go down a bit globally!! If $40+ is profitable for shale in USA, then $30+ could be profitable in 3rd world countries with cheaper labour and other costs.
http://www.wsj.com/articles/after-the-ca...1453162664
[Yet industry experts at RBN Energy foresee vast swaths of American shale profitable at just north of $40 a barrel. And it can come online extremely quickly.]

So US shale will actually cap the upper end of the oil market at $40 in the near future.


well since i dun short and only long stuff, I am still waiting for more brankruptcies to happen and more s**t to hit the fan, only then would oil be near the cyclical bottom where it will probably remain for at least 1-2 years, plenty of time to pick up solvent cheap OnG stocks. Based on historical price its very possible for oil to go back to 20s or even 10s level. OF course that would need and oversupply which we now have together with a sudden demand contraction like another GFC (which is getting more likely everyday as we are getting into the historical timeframe for another crash already)

I actually dont think shale is profitable at a total cost or cashflow basis at $40. It is actually symptomatic of cheap money and heightened risk appetite

Eventually (which i had already knocked out) US production will go below 8m bpd this year if not more. But the key is oversupply from non OPEC and also subdued demand. In fact watching US oil inventory should be key rather than production per se now, since they can now export oil.

[BlueKelah]

I do not know how shale is profitable at 40+ or even breakeven just looks that way from some articles I have read, but could be rough estimate by analysts.

The more imminent threat is actually Tesla. They just came out with ludicrous upgrade for their model s which can do 0-60miles in 2.8s. Am seriously impressed. Also the 35k mass market model is coming this year.

If they can really become profitable this year, we will see a big change in the motoring landscape. Imagine Nokia transition to iPhone.

Oil demand could be in big trouble by then.

It will be interesting to see how much lower usa oil production shifts down this year, but i won't like to speculate on that.






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[HitandRun]

I do not know how shale is profitable at 40+ or even breakeven just looks that way from some articles I have read, but could be rough estimate by analysts.

Sometimes I see analysis that I cannot help but make a comment.

Let's see the following articles:

EOG can make $30 oil work

EOG cuts capex by 50% after big loss

EOG is one of the better E&Ps in America. They still made a loss of $4.5 billion in 2015 and they have announced that their capex will be reduced by 45% to 50% for FY2016. At the same time, they also claimed that they can make a return of 10% at $30 oil with a 10-year drilling inventory. 

I would put more weight on the fact that they are cutting capex by 50% than the claim that they can be profitable at $30 oil. Would you?

[alex]

Interesting to see where oil price will be at end of month. I believe the trading range for oil has expanded - Mid $20s to $40.. Plenty of trading opportunity for the brave.