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Thread: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by rocket88 View Post
    I did. If the Saudis flood the market and drive down the price further, American companies will cut back production here.
    And keep gas at around three bucks which is a healthy price for the American economy

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by lifeisshort View Post
    And keep gas at around three bucks which is a healthy price for the American economy
    Yes. Which is not in keeping with the "drill baby drill" in your OP. because drilling won't happen if the price slips further.

    Interesting how it was Obama's horrible policies that were to blame for $3 gas, and now that's a "healthy price."


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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by lifeisshort View Post
    Interesting reading for all those who have for so long attempted to defy the law of supply and demand when it comes to oil. Yes indeed more oil supply means lower prices so get over it and "drill baby drill". Also good reading here for those who insist our economy is doing great under Obama's leadership and as we all know "when America sneezes the world catches a cold".


    "The slide in oil prices continued on Thursday with Brent crude prices dropping below $90 a barrel for the first time in two years and West Texas Intermediate prices entering bear market territory. The price drop comes amid general concerns over weakening demand globally and oversupply from the U.S. because of increasing shale oil production.

    As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis - Forbes
    The Saudi's have signaled that they may keep production at current levels in order to maintain market share. This would be in an effort to make US production unprofitable in order to give them an edge several years down the road. In the interim it would ensure continued low prices.

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by lifeisshort View Post
    The US oil industry needs eighty dollar oil to keep domestic production profitable. This translates to $3.00 gas at the pump and that would be a fine point for it to stabilize.
    Actually they don't or I should say it depends on the field they are working. North Dakota yes they need $80 a barrel. West Kern, or Midland Texas no, the reason being those fields have logistics in place for moving oil and supplies for drilling. North Dakota, Colorado ect. Not so much they have logistics problems and that is why the costs are so much. Existing fields can keep drilling down to about $30 a barrel and still be profitable.
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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by Sherman123 View Post
    The Saudi's have signaled that they may keep production at current levels in order to maintain market share. This would be in an effort to make US production unprofitable in order to give them an edge several years down the road. In the interim it would ensure continued low prices.
    The Saudis have and advantage right now because their fields are existing. So the logistics for them are established. However time is actually against the Saudi's because as time goes on our newer fields become more established and the logistics become stabilized the cost to produce those fields go down. The US then gains parity in production and costs. Remember once oil is produced it has to be moved to market. Materials brought in ect. Many fields in the US are very established especially in California and Texas and Oklahoma and parts of Pennsylvania. Those fields are very well established and can be profitable down to approximately $15 a barrel. The Dakotas Colorado are not very established and so have large logistical hurdles still. This goes away over time as the fields become established.
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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by Sherman123 View Post
    The Saudi's have signaled that they may keep production at current levels in order to maintain market share. This would be in an effort to make US production unprofitable in order to give them an edge several years down the road. In the interim it would ensure continued low prices.
    What this proves is that "drill baby drill" works. OPEC no longer owns us.

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by PirateMk1 View Post
    Actually they don't or I should say it depends on the field they are working. North Dakota yes they need $80 a barrel. West Kern, or Midland Texas no, the reason being those fields have logistics in place for moving oil and supplies for drilling. North Dakota, Colorado ect. Not so much they have logistics problems and that is why the costs are so much. Existing fields can keep drilling down to about $30 a barrel and still be profitable.
    I think the $80.00 mark is for the new oil and that is the oil that has put us back in the drivers seat.

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by lifeisshort View Post
    I think the $80.00 mark is for the new oil and that is the oil that has put us back in the drivers seat.
    New oil puts us over the top, but remember most production is from the older fields which are being expanded and reworked to improve production. Its much cheaper to rework a well than drill new, as the infrastructure is already in place. The drilling in the new areas will slow down. The older areas are still quite profitable and the price of oil can drop quite a bit before they slow it down. The other thing is that since rigs are in demand they will be relocated to the older fields to keep those rigs working which result in a temporary boom in the old fields.
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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Offshore drilling is going deeper and deeper so this calls for changes in the tooling and the costs are higher. When the pressures get higher like from today's 15,000 psi rated technology to 20,000 psi technology which is what the R&D people are working on now where I work all specifications change and there are a lot of man hours and expenses that accommodate such changes. The coasts are passed on to the suckers, I mean consumers.

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    Re: As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis

    Quote Originally Posted by lifeisshort View Post
    Interesting reading for all those who have for so long attempted to defy the law of supply and demand when it comes to oil. Yes indeed more oil supply means lower prices so get over it and "drill baby drill". Also good reading here for those who insist our economy is doing great under Obama's leadership and as we all know "when America sneezes the world catches a cold".


    "The slide in oil prices continued on Thursday with Brent crude prices dropping below $90 a barrel for the first time in two years and West Texas Intermediate prices entering bear market territory. The price drop comes amid general concerns over weakening demand globally and oversupply from the U.S. because of increasing shale oil production.

    As Brent Crude Drops Below $90, Oil Stocks Tumble And Eyes Turn To Saudis - Forbes
    Part of the reason must be slagging demand. That is often a sign of warning as it can indicate the state of the world economy.

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