No one to blame but OPEC!

[ZRrrr]

OPEC likely to keep oil prices low amid signs strategy is working

Oil’s whodunit moment coming as millions of barrels vanish from inventories

 

[4byrookie]

Better get another thread going, I don't think anyone will notice the 3 so far with the exact same links.

 

[imdoo'n]

Ya maybe something changed?

 

[Russell P]

Yup, totally missed it. Hey, did u hear, supposedly going to be an economic slow down. Bahhh, no way, the government can't afford a slow down. Next thing u know, people will be predicting an NDP government here. LOL, no way In hell, I think ....... Jesus, .........never mind. ��

 

[ZRrrr]

Wasn't sure what you're talking about but now see three os the same threads. Sorry gents, no idea how that happened, I only posted once.

 

[niner]

The way I understand this is before at $100 a barrel demand was to low because of the cost. Now that it's lower demand is way up and selling way more. So sure the price is lower but your selling more. Seems like it's working. Please correct me if I'm missing something. I'm no expert.

 

[Stompin Tom]

The way I understand this is before at $100 a barrel demand was to low because of the cost. Now that it's lower demand is way up and selling way more. So sure the price is lower but your selling more. Seems like it's working. Please correct me if I'm missing something. I'm no expert.

The simplistic thought is that the oil companies need to maximize their cost to selling price ratio. If it costs you 50 dollars a barrel to produce and your selling it for 55 dollars yes you are showing a profit, but your return on the dollar is low. There has to be capital returned to pay for initial investments as well as new developments. If your not making enough money to fund both then you will soon be out of business.

Part of this is a simple cleansing. Costs have gotten to high in the patch, the companies need to reel those costs. A simple downturn gives them an excuse to make cuts, put some pressure on the small guy, bankrupt a few, pretty soon guys are willing to work for less and the costs go down.

 

[freeflorider]

The simplistic thought is that the oil companies need to maximize their cost to selling price ratio. If it costs you 50 dollars a barrel to produce and your selling it for 55 dollars yes you are showing a profit, but your return on the dollar is low. There has to be capital returned to pay for initial investments as well as new developments. If your not making enough money to fund both then you will soon be out of business.

Part of this is a simple cleansing. Costs have gotten to high in the patch, the companies need to reel those costs. A simple downturn gives them an excuse to make cuts, put some pressure on the small guy, bankrupt a few, pretty soon guys are willing to work for less and the costs go down.

Geeessss stompin sounds like the oil patch is fallowing the forest sectors way of doing business. How wounderfull would it be if we could get paid enough to cover capital investment and have some left over for new developments...

 

[Clark Grizwald]

It's all politics, I would say Obama is to blame for flooding the market with oil if you look at the top producer it's red white and blue. Now that the states can keep the flow up at a cheaper price for production it's a new ball game and OPEC doesn't like it or as they say keep there market share.

 

[Snowdin]

It's all politics, I would say Obama is to blame for flooding the market with oil if you look at the top producer it's red white and blue. Now that the states can keep the flow up at a cheaper price for production it's a new ball game and OPEC doesn't like it or as they say keep there market share.

You nailed it. The USA increased oil production by 1.5 million BBL/day. That 1.5 million BBL/day that Saudi loses out on and they don't like that.

 

[Clark Grizwald]

It's unfortunate so many of us half to pay, I'm currently unemployed for the first time since graduating high school some 20 odd years ago. It seems it's always the states stirring the pot in this world and it would be bad for everyone but I hope the rest of the world is successful in getting rid of the U.S debt and they crumble like the turds they are, American pigs.

 

[JMCX]

I think the Saudis are doing exactly what Obama asked them to do. Mainly to hurt the Russians. Does it make more sense to sell 30 barrels at $100 each or 33 at $50? Add to this the fact they are always talking about how Saudi has passed it's peak. Why drain your finite resource even faster for less money? Also, lower gasoline prices will help the economy gain some steam into the 2016 US elections.

 

[LBZ]

The simplistic thought is that the oil companies need to maximize their cost to selling price ratio. If it costs you 50 dollars a barrel to produce and your selling it for 55 dollars yes you are showing a profit, but your return on the dollar is low. There has to be capital returned to pay for initial investments as well as new developments. If your not making enough money to fund both then you will soon be out of business.

Part of this is a simple cleansing. Costs have gotten to high in the patch, the companies need to reel those costs. A simple downturn gives them an excuse to make cuts, put some pressure on the small guy, bankrupt a few, pretty soon guys are willing to work for less and the costs go down.

I agree with the first part but not the second. Top dollar in my field hasn't gone up in over 15 years. Operating costs with the introduction for example of higher safety standards and more required training has caused operators and contractors across the board to raise prices. If we still operated across the board like they did in late '80's and '90's then I would agree but nobody does anymore-except for maybe parts of the US and definitely other countries.

 

[sumx54]

I agree with the first part but not the second. Top dollar in my field hasn't gone up in over 15 years. Operating costs with the introduction for example of higher safety standards and more required training has caused operators and contractors across the board to raise prices. If we still operated across the board like they did in late '80's and '90's then I would agree but nobody does anymore-except for maybe parts of the US and definitely other countries.

i agree. This has nothing to do with cleansing. That happened in 2008.

 

[wyodirtbagdad]

It's unfortunate so many of us half to pay, I'm currently unemployed for the first time since graduating high school some 20 odd years ago. It seems it's always the states stirring the pot in this world and it would be bad for everyone but I hope the rest of the world is successful in getting rid of the U.S debt and they crumble like the turds they are, American pigs.

How do you know that Canadian companies didn't increase their production and contribute also? Or Venezuela? Or one of the other major producers?

End of the day its well documented that the Saudi's intend to keep the price low through production because their cost per barrel is so low that their profit margins per barrel are still high. But other places that cannot produce barrels as cheap are forced to shut down. Do some research ffs before pointing a finger.

 

[800HMX]

World oil consumption has been flat at about 91Mm bbls/day for a while. World oil production at 93 Mm bbls/day (2Mm/day over supply). North American consumption is down while China and India are up. Mid East production flat at about 30Mm bbls/day. What has changed is that NA production has really increased and is now about 30Mm Bbbls/day.

The big difference is the cost of production. NA around $55/bbl and the Mid East at $10/bbl. But the Mid East, Russia, Libya, etc build their budgets around $100 oil. Everyone is affected. Saudi's sitting on $750 billion in reserve cash and NA not too much cash floating around.

To maintain the 30% market share, the Saudi's are keeping the Mid East production whole at 30Mm bbls/day by increasing their production to about 10Mm bbls/day. As the oversupply continues (NA production still rising) the price will continue to stay around $50-60/bbl.

With prices at current levels, capital investment (drilling) has stopped. Production will eventually slow down then drop off. Prices will recover and companies will eventually be able to put together capital programs. All of this will take at least 12 more months. The best thing for low oil prices are low oil prices.

Because nothing is simple. Costs in AB and BC are significantly higher than in the Southern States. Access to land (to drill), complex regulatory requirements, very limited take away capacity (pipelines and processing) all make operations in AB and BC challenging in comparison. Capital has left and will continue to leave Canada with most of the majors investing more and more of their capital down south.

 

[j335]

World oil consumption has been flat at about 91Mm bbls/day for a while. World oil production at 93 Mm bbls/day (2Mm/day over supply). North American consumption is down while China and India are up. Mid East production flat at about 30Mm bbls/day. What has changed is that NA production has really increased and is now about 30Mm Bbbls/day.

The big difference is the cost of production. NA around $55/bbl and the Mid East at $10/bbl. But the Mid East, Russia, Libya, etc build their budgets around $100 oil. Everyone is affected. Saudi's sitting on $750 billion in reserve cash and NA not too much cash floating around.

To maintain the 30% market share, the Saudi's are keeping the Mid East production whole at 30Mm bbls/day by increasing their production to about 10Mm bbls/day. As the oversupply continues (NA production still rising) the price will continue to stay around $50-60/bbl.

With prices at current levels, capital investment (drilling) has stopped. Production will eventually slow down then drop off. Prices will recover and companies will eventually be able to put together capital programs. All of this will take at least 12 more months. The best thing for low oil prices are low oil prices.

Because nothing is simple. Costs in AB and BC are significantly higher than in the Southern States. Access to land (to drill), complex regulatory requirements, very limited take away capacity (pipelines and processing) all make operations in AB and BC challenging in comparison. Capital has left and will continue to leave Canada with most of the majors investing more and more of their capital down south.

X2! Way too hard to make return up here in Alberta for an oil company!

 

[sirkdev]

I agree with the first part but not the second. Top dollar in my field hasn't gone up in over 15 years. Operating costs with the introduction for example of higher safety standards and more required training has caused operators and contractors across the board to raise prices. If we still operated across the board like they did in late '80's and '90's then I would agree but nobody does anymore-except for maybe parts of the US and definitely other countries.

Contract well operator? Minor rate increases have not even kept up with inflation of vehicle prices, not to mention fuel prices...

 

[LBZ]

No. I work in drilling.
And considering a diesel truck 15 years ago was over 20g cheaper you are 100% right.

 

[pfi572]

No. I work in drilling.
And considering a diesel truck 15 years ago was over 20g cheaper you are 100% right.

Option out a truck the same as what they offered 15 years ago and you will be surprised .
The new ones have just added way more expensive options then what was offered back then.