Oil Prices

[specuvestor]

Deterioration of US-Arab relationship since 911 sow the seed and maybe Brexit will be the catalyst for the beginning of the end for Petro$
https://www.cnbc.com/2017/10/11/china-wi...lainternal

I don't think RMB would be the major reserve currency next 20 years but USD position will be weakened. On the other hand China views the change pragmatically but Russia has political agenda.

[weijian]

President Trump seems to working for Saudi (and Israel?)'s benefits with the de-certification of the Iran deal. To which extent would the Saudis start to bow out? IIRC, they still buy alot of weapons from the United States, any one interested in Chinese (aka Russian-modified) weaponry as a substitute?

Even if oil goes off the chart, there are still tons of commodities priced in USD and also the biggest of all - the Treasury bond market.

[Behappyalways]

why-we-all-will-soon-be-riding-electric-cars
https://www.theedgesingapore.com/technol...ctric-cars

Oil will crash to $10 a barrel with electric vehicle revolution, strategist says
https://www.cnbc.com/2017/10/13/oil-will...-says.html

[cyclone]

Oil could hit $80 per barrel by the end of 2018, says portfolio manager

CNBC
Jan 3, 2018

This year could mark a comeback for commodities, with oil potentially hitting $80 per barrel, a portfolio manager said on Wednesday.

Restrained production among major oil producers and the "greater impetus" to maintain stability ahead of the widely-anticipated initial public offering of Saudi Aramco will support prices further this year, said Yoon Chou Chong, head of Asian equities at Natixis Asset Management.

"We've done a lot through the exporters, tech and we're still happy with them. (But) I think this might be the year for the return of the commodities, the oil," Chong told CNBC. He named commodities as a top trade for 2018.

"The $80-mark ... (doesn't) sound too preposterous, actually," he added.

More details in https://www.cnbc.com/2018/01/02/oil-pric...-2018.html

[CY09]

As of now oil price is hovering at the $60+ range. With supply just about meeting demand and US shale output covering for the decreased cut from Opec; I wonder as value investors, should we start evaluating on which o&G companies in Singapore will flourish at the US$60 price mark

Important>

There are few segments of oil supply: 1) On land production, 2) Shallow Water, 3) Shale Oil & 4) deep water.

Right now shale with technology advancement and cheap US credit is able to produce generally in the region of $55-60 for profitability. This is in line with shallow water production, whose cost are slightly lower. With the world's demand and excess inventory on land and sea, deep water drilling is not profitable within the next 5 years. Some oil majors have even resorted to buying out their deep water contracts because it is not cash flow efficient to contiue such deep water projects at $45 bbl

What this means is that countries dependent on deep water oil exploration production are technically in trouble. Which countries are mainly deep water? Mexico, Brazil and West Africa countries. On the SGX, there are mainly 3 companies which focus on deep water offshore support - Ezra and Swiber.

With deep water drilling momentarily suspended, these 3 will definitely experience dwindling order books and rely on luck to survive.

Shallow water is now barely surviving and should oil fall to 35 for a long period of time, both shale and shallow water will pause. On the SGX, shallow water offshore support are mainly Penguin, Ezion, Nam Cheong. Will oil fall to 35, possibly, however, in my opinion, it will go up again as the world's demand cant be dependent on supply from land production indefinitely. So prices will go up to make it profitable for shallow water to resume production and then shale. Supply will slowly grow to balance out demand

[BlueKelah]

As of now oil price is hovering at the $60+ range. With supply just about meeting demand and US shale output covering for the decreased cut from Opec; I wonder as value investors, should we start evaluating on which o&G companies in Singapore will flourish at the US$60 price mark

Important>

There are few segments of oil supply: 1) On land production, 2) Shallow Water, 3) Shale Oil & 4) deep water.

Right now shale with technology advancement and cheap US credit is able to produce generally in the region of $55-60 for profitability. This is in line with shallow water production, whose cost are slightly lower. With the world's demand and excess inventory on land and sea, deep water drilling is not profitable within the next 5 years. Some oil majors have even resorted to buying out their deep water contracts because it is not cash flow efficient to contiue such deep water projects at $45 bbl

What this means is that countries dependent on deep water oil exploration  production are technically in trouble. Which countries are mainly deep water? Mexico, Brazil and West Africa countries. On the SGX, there are mainly 3 companies which focus on deep water offshore support - Ezra and Swiber.

With deep water drilling momentarily suspended, these 3 will definitely experience dwindling order books and rely on luck to survive.

Shallow water is now barely surviving and should oil fall to 35 for a long period of time, both shale and shallow water will pause. On the SGX, shallow water offshore support are mainly Penguin, Ezion, Nam Cheong. Will oil fall to 35, possibly, however, in my opinion, it will go up again as the world's demand cant be dependent on supply from land production indefinitely. So prices will go up to make it profitable for shallow water to resume production and then shale. Supply will slowly grow to balance out demand

Oil prices fall as U.S. outpt soars above 10 million bpd
https://sg.finance.yahoo.com/news/oil-pr...nance.html


--------------------------------
Very likely it will drop back to $40-$50 range again on the back of rising US supplies and of course the rising USD which has inverse relationship to commodity prices.. After all shale is profitable at around $40 now and maybe even less, plus there's like more than $20 billion barrels just in the Permian Basin waiting to be fracked.

Unless the FED indicates otherwise, I believe US 10yr will crack the 3% mark bumping the USD up as all the carry-trade from US to overseas markets reverses.

It will be interesting how OPEC/Russia respond to rising shale. Maybe Russia will announce they have to pump more and start a race to the bottom. Not much choice if US is not cooperating.  Time for traders to short MPM and other OnG counters again perhaps?

[Wildreamz]

Shale is going to put a ceiling on oil price near term (over-supply); EVs and the renewable energy revolution is going to put pressure on oil price long term (declining demand).

Yep, nothing changed.

[CY09]

http://www.hellenicshippingnews.com/mill...dget-deal/

US Congress has approved the sale of its reserves. Each year about 35 million barrels (~1% of US annual oil output) will be sold. This means global oil supply will increase.

It seems unlikely for oil prices to advance much beyond the $60 mark given how US is increasing its oil exports; unless Russia and OPEC continues their supply cut agreement for another 8 more years?

[specuvestor]

http://www.hellenicshippingnews.com/mill...dget-deal/

US Congress has approved the sale of its reserves. Each year about 35 million barrels (~1% of US annual oil output) will be sold. This means global oil supply will increase.

To me this is more than oil price. It signals the end of US and Saudi solidarity. And Russia again is coming in to fill the gap

Deterioration of US-Arab relationship since 911 sow the seed and maybe Brexit will be the catalyst for the beginning of the end for Petro$
https://www.cnbc.com/2017/10/11/china-wi...lainternal

I don't think RMB would be the major reserve currency next 20 years but USD position will be weakened. On the other hand China views the change pragmatically but Russia has political agenda.

[Wildreamz]

https://cleantechnica.com/2014/02/04/cur...ar-panels/


Global Solar To Hit 106 Gigawatts Of New Installations In 2018, Predicts EnergyTrend
https://cleantechnica.com/2018/01/29/glo...ergytrend/
January 29th, 2018 by Joshua S Hill 

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What is the long term consequence of this trend on Oil Prices?