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Thread: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

  1. #101
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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by apdst View Post
    Shale oil helped bring gas prices down to 2.50 a gallon (where I'm at). I'd call that a good thing.
    I know lol. It seems like people on this thread are actually complaining about lower gas prices. I don't get it. I understand that shale turns unprofitable at a certain point but I'll take the 50-75 cent drop it has provided any day of the week. At least it's some relief, especially this time of year.
    “Mr. Speaker, I once again find myself compelled to vote against the annual budget resolution for a very simple reason: it makes government bigger.” ― Ron Paul
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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by 1750Texan View Post
    Tar deposited in the shale strata.

    88888888888888888888888888888888888888888888888888 88888888888888888888888888


    This make XL Keystone even more unattractive. More oil on the market hurts Texas producers.
    Ohhhh. Thanks. Nasty stuff, that tar is, I read. All but impossible to clean up after a spill, I think?
    ________________________________

  3. #103
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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by MildSteel View Post
    The crap is your assertion that the Russians have said that the notion that Saudi Arabia is driving down prices to hurt Russia is false. The Russians have said no such thing.
    I pointed out that the Saudi's were making their move to try to take out the fracking industry, you said this was incorrect - they were instead trying to harm the Russians. I then pointed out that even the Russians (who are not only deeply paranoid, but would benefit from such a narrative) agree that the Saudi's move is about the fracking industry.....

    and this is all the response you have.

    Yep, that's the typical neocon response. Victoria is just some bureaucrat who does not matter...That is true which is why Victoria Nuland did what she did in Ukraine in the first place, to screw Russia in the long term. ...That's why they had to secure there naval base in Crimea and are creating a buffer zone against NATO expansion in eastern Ukraine.
    Tying this together because both are entertaining to those of us who follow foreign policy. What, pray tell, did Victoria Nuland do that was SOOOOOOOO serious and awful and threatening AFTER the Russians took the Crimean peninsula (which they did because (as I have pointed out) Russians are deeply paranoid and are seeking to recreate the zones of the old Russian Empire in order to control their near-abroad)? How, oh how, did Victoria Nulands' words screw Russia in the long term?

    And as a side note - why is it that there is a certain brand of liberal who is so quick to defend a nation such as Russia's "right" to dominate smaller countries that happen to fall along her border, yet who is also so quick to castigate the United States for even trying to secure its border?

    However, if you actually want to know why Russia is boned long term, take a look at her economic structure and her demographics.

    We don't have to have Marines in a particular location for it to matter to us.
    When someone takes a military action that we oppose, if it matters to us, we bother to do something about it. We aren't doing anything about Crimea. We are doing something about ISIL, in which Russia is, if not an ally, at least a co-belligerent of both us and the Saudi's.

    It is a fact that they sanctions have hurt Russia. They will have to spend billions to keep Crimea in shape at a time when sanctions are eroding the value of the ruble and causing a significant amount of capital flight
    the "Sanctions" are a few senior leaders whose bank accounts we froze. They are not at all harmful to Russia as anything more than an annoyance to some of it's leadership. It is an attempt to look tough without actually doing anything. It's like saying something is a "Red Line" and then responding to that line being crossed by shaking ones' finger and tut-tutting at the UN, and claiming those were "serious consequences".

  4. #104
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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Perhaps you didn't know it, but it is becoming increasingly harder for oil companies to expand their proven reserves. That's one reason why the majors took to acquiring smaller oil companies a few years ago.
    Ah. Is that why oil reserves continue to expand faster than we are using them up?

    That's what you call making crap up. What a load of baloney.
    Oh, I"m pretty sure if offered two more generations, the Saudi leadership would take it.

    No flattened demand will not last for some time because although the rate at which China's economy is growing is slowing, it is still growing nonetheless.
    If you feel that China is not heading for a Japanese decade, feel free to come into the Economics forum and argue so.... and then get torn up. China has massively overinvested and is facing huge bubbles in real estate, education, and the debt instruments that have been used to keep both rolling over. The CCP, however, is unwilling to go through a sharp downturn, given the social instability that would cause, and so will instead draw out the pain for some time.

    That combined with the growth in India and other East Asian countries will certainly strain the capacity of the oil industry to meet demand.
    Worldwide oil demand might indeed increase (perhaps less so if it is mitigated by falls in Europe). But you are attempting to conflate that with the demand out of China.

    Have you identified that technology that will cause the Earth to replenish oil at a rate greater than it is being consumed? The answer is no, so again, you are making up crap.
    No, but I do not know if the demand will come for it, creating it. Meaning that I am correct to point out that your flat assertion here is not necessarily true, but only a probability.

    In the meantime it is becoming increasingly difficult for oil companies to increase their proven reserves.
    which is why they keep expanding faster than our rate of usage.

    Here you are making up more crap. The Saudis are not going to get a few decades or a half a century out of this because they are not going to hold down prices long enough for that to happen.
    perhaps - we shall have to see. You continue to mistake the need to outlast the ability of US fracking companies to withstand continual losses with attempting to hold down prices indefinitely. So perhaps you can answer this for us: how long do you think US fracking companies can operate at a loss, having already lost all of their massive sunk costs, until investors flee and they are forced to close up shop?

    Interested in your answer on that one.

    No because the rate greatly accelerated after the Saudi announcement and the price went from above 90 dollars before the Saudi announcement to below 70.
    Prices absolutely continued to fall after the Saudi Announcement, which does not alter in the slightest the fact that they were falling prior to the Saudi announcement, indicating that both A) the Saudi's have reason to believe that they risk losing control over the international oil market, prompting their decision and B) you are incorrect to attempt to give responsibility for the former to the latter.

    Crude Oil.jpg

    Hint: your theory doesn't explain why other SWF oil-rich nations would also slash prices.

  5. #105
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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by Fenton View Post
    Part of the reason the Saudi's are selling their product so cheap is to target the Russian economy.

    Put Putin back in his place I suppose.

    And yes, it would seem they're trying to put shale out of Bussinesses too.
    Russian Ruble's devaluation means that Oil sells for MORE Rubles per barrel even at lower $USD price per barrel, than they were selling before at the higher $USD per barrel.

    Think about that.

    If Russian government needs 2500 Rubles per barrel to balance budget, and buys all Ruble based services and goods.

    And now Barrels of oil trade for 3000 Rubles (even at lower USD price), is Russia hurt at all?

    no.

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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by MarineTpartier View Post
    I know lol. It seems like people on this thread are actually complaining about lower gas prices. I don't get it. I understand that shale turns unprofitable at a certain point but I'll take the 50-75 cent drop it has provided any day of the week. At least it's some relief, especially this time of year.
    I love SUSTAINABLY low gas prices.

    Not gas prices that end up blowing up the financial sector requiring yet another $2Trillion dollar bailout.

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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Hey look! More people agreeing with cpwill!


    Chris Skrebowski, former editor of Petroleum Review, said the Saudis want to cut the annual growth rate of US shale output from 1m barrels per day (bpd) to 500,000 bpd to bring the market closer to balance. “They want to unnerve the shale oil model and undermine financial confidence, but they won’t stop the growth altogether,” he said.

    There is no question that the US has entirely changed the global energy landscape and poses an existential threat to Opec. America has cut its net oil imports by 8.7m bpd since 2006, equal to the combined oil exports of Saudi Arabia and Nigeria.....

    Opec may not be worried about countries such as Nigeria, but even there a full-blown economic and political crisis could turn the north into a Jihadi stronghold under Boko Haram.

    The growing Jihadi movements in the Maghreb – combining with events in Syria and Iraq – clearly pose a first-order security threat to the Saudi regime itself....
    Last edited by cpwill; 11-30-14 at 09:44 PM.

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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by cpwill View Post
    Hey look! More people agreeing with cpwill!
    If you want a real lesson in Oil economy go to my thread about Russia and how the oil price plummet has not effected Russia at all. In fact Russia is making more money off Oil than ever before.

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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by IDNeon View Post
    If you want a real lesson in Oil economy go to my thread about Russia and how the oil price plummet has not effected Russia at all. In fact Russia is making more money off Oil than ever before.
    Hm. That's an interesting claim. According to Citigroup the Break-Even cost for Russia is $105. Link?

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    Re: Oil at $75 Means Patches of Texas Shale Turn Unprofitable

    Quote Originally Posted by cpwill View Post
    I pointed out that the Saudi's were making their move to try to take out the fracking industry, you said this was incorrect - they were instead trying to harm the Russians.
    WRONG! If you read post #86 I said:

    Of course the Saudis can hurt the fracking industry by doing this. But like I said before, this will only be temporary because the Saudis are not going to keep selling oil at such deep discounts. When they stop, the price will go back up, and the fracking industry will be back. Therefore, strategically, what is accomplished is a big hit to Russia, something the US wants, and a big hit to Iran, something the Saudis want, as well as the US.
    Quote Originally Posted by cpwill View Post
    I then pointed out that even the Russians (who are not only deeply paranoid, but would benefit from such a narrative) agree that the Saudi's move is about the fracking industry.....

    and this is all the response you have.
    My response is that you either need to stop the sophistry or learn to read properly.


    Quote Originally Posted by cpwill View Post
    Tying this together because both are entertaining to those of us who follow foreign policy. What, pray tell, did Victoria Nuland do that was SOOOOOOOO serious and awful and threatening AFTER the Russians took the Crimean peninsula (which they did because (as I have pointed out) Russians are deeply paranoid and are seeking to recreate the zones of the old Russian Empire in order to control their near-abroad)?
    I hope the people you speak of when you say "those of us who follow foreign policy" have better reading comprehension skills that what you have displayed here because it appears to me that you cannot even follow properly what has been said in this thread. It's either that or you are practicing deceit through distortion. That aside, your flaw here is:
    AFTER the Russians took the Crimean peninsula
    You need to look at Victoria Nuland's actions before Crimea.

    Quote Originally Posted by cpwill View Post
    How, oh how, did Victoria Nulands' words screw Russia in the long term?
    Since you follow foreign policy, I will leave that to you and your buddies who are so foreign policy astute to figure out. But if you want to know what I think, I'm going to borrow one of your lines and say read my previous posts on this subject. I have posted on this at length. Don't be lazy and do your research.

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