Oil Prices

[brattzz]

Or a couple of oil-cartels, working together to rig the price!..

[CY09]

http://www.marketwatch.com/story/kuwait-...2016-05-10

If this is to materialize, expect a long winter till 2024. I do not expect huge rise in demand as countries have to ractify the new PASIR Environment agreement which is to be implemented by 2020. This will mean a tedpid rise in demand for oil from now to then

[brattzz]

Just the beginning of winter, co.s has to adjust to the low oil prices biz model... :O

[HitandRun]

http://www.marketwatch.com/story/kuwait-...2016-05-10

If this is to materialize, expect a long winter till 2024. I do not expect huge rise in demand as countries have to ractify the new PASIR Environment agreement which is to be implemented by 2020. This will mean a tedpid rise in demand for oil from now to then

Such reports should be taken with a huge pinch of salt.

From 2003 to 2014 when oil prices were at historic highs, Kuwait only managed to produce 2.5 millions barrels (plus minus 200k barrels) a day. Why does one suppose that they will be able and are willing to increase their supply by 50% when almost all listed oil and gas E&P are bleeding cash? Has Kuwait invented an economics defying business model?? Perhaps another major oil discovery ala the Burgan field? 

The only OPEC member who has proved to be able to increase its oil production substantially is Iraq, the reasons of which are very well known. Iran's ability to increase production substantially is probably suspect as well. (offloading of inventory is not counted) And we have not even talk about what's happening in Venezuela yet.....

[HitandRun]

Oil Patch Update

The spigots appear to be firmly shut. The bankruptcies are beginning to accelerate:

Haynes and Boone Oil Bankruptcies Monitor

According to their tally, total debt owed by companies that declared bankruptcies up to April this year is equivalent to the whole of last year.

And more bankruptcies have been declared in May with several more to follow:

Bankruptcies Add Up

"The tally doesn’t include Chaparral Energy Inc., Penn Virginia Corp. and Linn Energy LLC, which filed for bankruptcy this week owing more than $11 billion combined. At least four more oil and gas companies owing more than $8 billion are nearing default, including Breitburn Energy Partners LP and SandRidge Energy Inc."

Only 1 word is needed to describe the 1Q results announced by US listed E&Ps => AWFUL.

[sgd]

Have you heard saudi oil minister sacked. This type high level sacking leads to all kinds of wild speculation.

http://www.straitstimes.com/world/middle...t-shake-up



As a side note. You see this saudi guy we dunno who he is but he seems very wealthy has people scurrying around to sweeping up the money he throws at women. He looks like someone always gets his way and have people kissing his ass all the time. And yet we see in the news everywhere that their own leaders are now starting to 'woo' investors. 

Changes are happening but people don't yet realize. 

[BlueKelah]

Its not really sacked lah, just give him chance to retire I guess. He is already 80 years old or something rite? Maybe his health is an issue but they dun wanna publicize it.

but you could be right, quite suspicious the Arab wanna IPO their main oil company for. Way i see it, after they do mega IPO of Aramco, they can then declare oil production freeze or reduction. immediately oil price shoot back to 100++ then their stock will shoot up through the roof. EASY $$ for them as they control the narrative. Sell out for big profit to recoup any losses they are having now whilst killing US shale. By the time US shale start the next cycle of reinvestment, they can rinse and repeat

The only thing that affect this plan will be electric vehicles and renewable energy becoming mainstream, and oil becoming just another commodity with very reduced demand.

[sgd]

Its not really sacked lah, just give him chance to retire I guess. He is already 80 years old or something rite? Maybe his health is an issue but they dun wanna publicize it.

but you could be right, quite suspicious the Arab wanna IPO their main oil company for. Way i see it, after they do mega IPO of Aramco, they can then declare oil production freeze or reduction. immediately oil price shoot back to 100++ then their stock will shoot up through the roof. EASY $$ for them as they control the narrative. Sell out for big profit to recoup any losses they are having now whilst killing US shale. By the time US shale start the next cycle of reinvestment, they can rinse and repeat

The only thing that affect this plan will be electric vehicles and renewable energy becoming mainstream, and oil becoming just another commodity with very reduced demand.

Ponder these for a moment from that article

Naimi has been replaced by Khaled al-Falih, previously health minister, who takes the enlarged portfolio of energy, industry and mineral resources, according to a royal decree announced Saturday by state media.

Among other changes, a new central bank governor was announced and the ministry of electricity and water was scrapped.

If you say retire then I will expect someone or a few already groomed in the wings as possible successors who within the same realm of expertise and already closely working with the oil minister to assume when he steps down but they got an outsider - what does health minister know about oil?  It's just like saying get the head of housekeeper to run as factory manager.

Another more telling is why they suddenly scrapped the electricity and water ministries.

Everybody knows the Saudi's produce approx ~10 million barrels a day but the exact production count going back thru the decades back to the 50's 60's I think not many people really know.

The population is also growing from 6 million in the 60's to almost 28 million today so internally how much oil they are consuming themselves - now with the electricity ministry gone so going forward there's no way to tell.

Water - Go google about use of injecting water into oil wells to bring out the oil, because of gravity oil located deeper down is harder to extract so more and more water has to be injected but with water ministry gone there's no way to find that info in future.

I sense extraordinary lengths and measures taken. 

I think oil stocks in many places outside middle east are now pretty cheap time to buy them before they go up.

[BlueKelah]

sgd : I went to google and FYI as below.. 

[On May 7, 2016, the Ministry of Petroleum and Mineral Resources was renamed Ministry of Energy, Industry and Mineral Resources; the Ministry of Commerce and Industry was renamed the Ministry of Commerce and Investment; the Ministry of Hajj was renamed Ministry of Hajj and Umrah; The Ministry of Water and Electricity was dissolved and a new Ministry of Water, Environment and Agriculture formed; the Ministry of Islamic Affairs, Endowment, Call and Guidance was renamed Ministry of Islamic Affairs, Call and Guidance; and the Ministries of Labor and Social Affairs were integrated into the Ministry of Labor and Social Development.]
(https://www.saudiembassy.net/about/Biogr...sters.aspx)

The new ministry website as below which covers both electricity and water sectors.
http://www.mowe.gov.sa/enindex.aspx

Also the new oil minister, Khalid al-Falih, is well known in the world of oil. He was the chief executive of Aramco for six years between 2009 and 2015, and is the current chairman. As the CEO of Aramco for so many years, his experience should be sufficient to step into the shoes of an oil minister from a health minister. I think being a CEO of Aramco is adequate "grooming". As such my saying that the old oil minister is "retiring" is not unreasonable. It also fit in nicely with the talk of IPO of Aramco. What better man to put as oil minister than the current CEO of Aramco himself, gives confidence there is control of company on both public and private side.
(https://en.wikipedia.org/wiki/Khalid_A._Al-Falih)

Lastly here is some info on oil production 1950-2012:
https://en.wikipedia.org/wiki/File:Saudi...uction.png


http://www.resilience.org/stories/2015-0...-why-worry



Of course the main thing is how can we profit from all this? For investors your suggestion of buying cheap oil stocks is very good, though have to be careful company does not go bust before a turnaround in oil occurs. IMHO there should be another dip in oil prices both from the market crash which is due pretty soon (1-2years time) as well as a sudden dip in demand as EV transition to mainstream transportation in a few years time.

[sgd]

water prices leapt 500%

http://www.salon.com/2016/05/06/saudia_a...s_partner/


thanks for the info. if you come across production data in barrels going back all the way to 1951 we can total n compare see how far is it from their "official reserves"


what I read about in the past.

http://peakoilbarrel.com/closer-look-saudi-arabia/