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

lifeisshort

lifeisshort

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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
 
lifeisshort said:
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
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If it continues to slide, they'll stop drilling. Remember we need oil companies to "drill baby drill," that's not a function of our government. So as prices fall, production will be ramped down until they stabilize again.
 
rocket88 said:
If it continues to slide, they'll stop drilling. Remember we need oil companies to "drill baby drill," that's not a function of our government. So as prices fall, production will be ramped down until they stabilize again.
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That really depends who blinks first - US oil drillers or Saudi Princes?
 
rocket88 said:
If it continues to slide, they'll stop drilling. Remember we need oil companies to "drill baby drill," that's not a function of our government. So as prices fall, production will be ramped down until they stabilize again.
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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.
 
lifeisshort said:
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.
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It's like $3.10 right now. Not exactly big savings, and a big difference from the Republican's promised $2.

We want to drill everywhere to save 10 cents per gallon?
 
lifeisshort said:
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.
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The irony is that so does Russia. Their finances will collapse if oil remains below $80. I'm keeping my fingers crossed.
 
rocket88 said:
It's like $3.10 right now. Not exactly big savings, and a big difference from the Republican's promised $2.

We want to drill everywhere to save 10 cents per gallon?
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Oil is near the $80.00 mark now and that is why gas is near $3.00. At $100.00 a barrel it was near $4.00. More oil equals cheaper gas.
 
lifeisshort said:
Oil is near the $80.00 mark now and that is why gas is near $3.00. At $100.00 a barrel it was near $4.00. More oil equals cheaper gas.
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And the oil companies won' t allow that. They want to make money.
 
lifeisshort said:
If you read the link in the OP you wouldn't say that
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I did. If the Saudis flood the market and drive down the price further, American companies will cut back production here.
 
rocket88 said:
I did. If the Saudis flood the market and drive down the price further, American companies will cut back production here.
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And keep gas at around three bucks which is a healthy price for the American economy
 
lifeisshort said:
And keep gas at around three bucks which is a healthy price for the American economy
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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."
 
lifeisshort said:
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
Click to expand...

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.
 
lifeisshort said:
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.
Click to expand...

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.
 
Sherman123 said:
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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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.
 
Sherman123 said:
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.
Click to expand...

What this proves is that "drill baby drill" works. OPEC no longer owns us.
 
PirateMk1 said:
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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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.
 
lifeisshort said:
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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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.
 
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.
 
lifeisshort said:
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
Click to expand...

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.
 
rhinefire said:
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.
Click to expand...

"Suckers"? I don't follow. The price of oil should follow the price of production.
 
joG said:
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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Yes the world economy and energy efficiency. That is why in the OP I said this reflects badly on the US economy and why I am an all of the above guy. Drill baby drill AND get more efficient. The low gas prices will help stimulate our economy though and the previous high price is one of the reasons it is bad as of now.
 
Clearly Obama's anti-oil policies have stifled the supply of oil.
 
lifeisshort said:
Yes the world economy and energy efficiency. That is why in the OP I said this reflects badly on the US economy and why I am an all of the above guy. Drill baby drill AND get more efficient. The low gas prices will help stimulate our economy though and the previous high price is one of the reasons it is bad as of now.
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But if gas prices drop any further the drilling will no longer be profitable.
 
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