Recession just around the corner?

[Cdnfireman]

Yah back on topic. I think we will see a bit of a correction as the price of oil drops. But how big of a correction we will see. I am thinking this summer it will be back to where it was at the same time last year.


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I agree. The Saudis are refusing to cut production in an attempt to make domestic u.s. Production unprofitable. They don't realize that an American would rather pay another American than a foreigner for his oil. The poorer opec countries are already feeling the squeeze and are screaming their tits off. I think we'll see some ups and downs till March or so then things will climb back where they were. In the new year when the democrats lose control of the senate and Obama is rendered irrelevant the U.S. Economy will pick up as companies start to spend the huge cash reserves they have. Sales of durable goods in the states will climb once people get back to work from the companies' growth. Oil is up $3 today. The projects here in alberta may slow for a few months but they always do over the winter. Drilling will slow some because of the oil prices but that's normal. Any talk of a recession is overblown IMHO. A few sectors here and there will slow a bit but not for long.

 

[250mark1]

Saw in the news today the big oil companies ( I think it was. President of cnrl) are expecting the price of a barrel of oil to drop to the 30-35 dollar range for a while this year before stablizing at the 70 dollar mark

 

[ABMax24]

They don't realize that an American would rather pay another American than a foreigner for his oil.

The projects here in alberta may slow for a few months but they always do over the winter.

Americans would rather pay more for American made, ya right, tell that to the millions that have lost their manufacturing jobs to China and Mexico.

And FYI winter is the busy time for almost all Oil and Gas projects in Alberta, roads are froze so moving equipment is easy, rigs are going, pipelines are being built, facilities are under construction, and processing facilities are trying to keep up with demand. This slow down comes at exactly the wrong time for many.

I doubt this will be a quick blip, with all the new oil production in the states plus the new environmental regulation Obama is promising I doubt things will improve substantially soon, the best I hope for right now is consistent $70 oil.

 

[Cdnfireman]

Americans would rather pay more for American made, ya right, tell that to the millions that have lost their manufacturing jobs to China and Mexico.

And FYI winter is the busy time for almost all Oil and Gas projects in Alberta, roads are froze so moving equipment is easy, rigs are going, pipelines are being built, facilities are under construction, and processing facilities are trying to keep up with demand. This slow down comes at exactly the wrong time for many.

I doubt this will be a quick blip, with all the new oil production in the states plus the new environmental regulation Obama is promising I doubt things will improve substantially soon, the best I hope for right now is consistent $70 oil.

I said an american would rather buy his OIL from America. They've had enough of the ragheads.

Drilling and pipeline construction in wet/ muskeg areas pick up in winter. Otherwise production is far higher and less problematic in summer. This might slow the winter season a bit but not kill it.

Obama can propose all the crap he wants. The rest of the govt will kill it by not funding it. He's a lame duck now. And remember a 2/3 vote in the house can override his veto.

Projects already on the go have secured their funding. New stuff might get postponed but not by much. If any sector is gonna feel it it will be drilling. They're closest tied to oil prices because current oil prices dictate the financial feasibility of the hole they want to spud. Existing wells already have their infrastructure costs invested. Investment on them is recovered slower with lower prices but it's still recovered.

Research the the production costs of a barrel of oil or BOE For the OPEC countries required to balance their budgets. Quatar is the lowest (65) and Iran is the highest (140). Saudi Arabia is at $93. (Numbers according to the IMF and deutche bank). Anything below these numbers mean these countries have to use gold or foreign currency reserves to stay in the black. Not something they want to do.

Long story short very low oil prices are only good news to the average consumer and some manufacturers. The world economy runs on oil prices from $75 to $110. It'll return there before too long.

And anyone who's worked in the patch knows, a short slowdown helps to stabilize things and helps to get rid of the dead wood. Ask any rig manager or lead hand.

 

[ABMax24]

I said an american would rather buy his OIL from America. They've had enough of the ragheads. Agree, but the oil comes from the cheapest source, if middle eastern oil is cheaper then that's where it comes from.

Drilling and pipeline construction in wet/ muskeg areas pick up in winter. Otherwise production is far higher and less problematic in summer. This might slow the winter season a bit but not kill it. I wasn't sure Alberta had much oil in non wet/muskeg areas?

Obama can propose all the crap he wants. The rest of the govt will kill it by not funding it. He's a lame duck now. And remember a 2/3 vote in the house can override his veto. But Obama can still excite the speculators in the stock market.

Projects already on the go have secured their funding. New stuff might get postponed but not by much. If any sector is gonna feel it it will be drilling. They're closest tied to oil prices because current oil prices dictate the financial feasibility of the hole they want to spud. Existing wells already have their infrastructure costs invested. Investment on them is recovered slower with lower prices but it's still recovered. There are projects the general public hasn't heard about that will be postponed, gas prices are so low, and now condensate prices are taking a hit so liquids rich gas is out as well as oil, companies are moving back to the; don't build, don't spend policy.

Research the the production costs of a barrel of oil or BOE For the OPEC countries required to balance their budgets. Quatar is the lowest (65) and Iran is the highest (140). Saudi Arabia is at $93. (Numbers according to the IMF and deutche bank). Anything below these numbers mean these countries have to use gold or foreign currency reserves to stay in the black. Not something they want to do. I'm not sure they are too worried, those that make these decisions over there are the least affected by it because they have the most money.

Long story short very low oil prices are only good news to the average consumer and some manufacturers. The world economy runs on oil prices from $75 to $110. It'll return there before too long.

And anyone who's worked in the patch knows, a short slowdown helps to stabilize things and helps to get rid of the dead wood. Ask any rig manager or lead hand. Agreed, Everyone loves being able to clean house.

 

[cancritter]

major projects on the go in Edmonton...their short thousands of skilled trades...just finished project in grand prarie..place is booming and try to find help up there is near to impossible...lots of coin in alberta yet...no real slowdown for me in last 25 years...just getting busyer

 

[S.W.A.T.]

major projects on the go in Edmonton...their short thousands of skilled trades...just finished project in grand prarie..place is booming and try to find help up there is near to impossible...lots of coin in alberta yet...no real slowdown for me in last 25 years...just getting busyer

x2 in northern BC

 

[Snowdin]

Yes guys it's busy. However the way the oil price is going it can get very un-busy in a flash.

 

[Beels]

On the contrary, fuel and the price of it is a HUGE part of all this.

Petroleum runs the world. From plastic, to diesel.

The video with Oleary is very good IMO, very insightful. But what should have been added to it is also over production of grain. It seems that as technology improves, and more productive land coming into play in Russia and other parts, no longer is feeding the world looking like a problem. What is a problem, is getting the quality grain. There was also an article about Costco having to import Grade A, or triple A beef, as the demand is higher then supply.
As ag operations grow, it seems quality is squashed by quantity.


Or maybe not...

That's 95% weather dependent.

 

[straightshooter]

major projects on the go in Edmonton...their short thousands of skilled trades...just finished project in grand prarie..place is booming and try to find help up there is near to impossible...lots of coin in alberta yet...no real slowdown for me in last 25 years...just getting busyer

The edgemicated ppl will do just just fine. Will you get that big bonus at the end of the year? Probably not. The ppl that make 100k as a labour.... Well I can't wait to go to their garage sales. Although since society is never happy with what they can afford (read it in this thread) and cash is almost a thing of the past. I guess I'll be buying those items from the bank. A smart man that lived through hard times and was happy with what he had once told me. If you can't pay for the extras in life you can't afford them. You can blame it on the government or banks that cause recession but it's truly the ppl who sigh here and can't make the payments.


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[S.W.A.T.]

I stashed away a couple of pennies, think they are becoming collector items and one day might bet worth 5 cents. Solid investment plan

 

[pistoncontracting]

That's 95% weather dependent.

Kindof. Except for the Hutts and big guys. Sure they can bang off a pile of acres, but don't physically have enough days to take everything at optimum. I've watched 20,000 acre farmers combining in the rain. Had they not been doing it in the rain, it would be berried in snow.

Not blaming or anything, just saying what is happening.

 

[pistoncontracting]

I agree. The Saudis are refusing to cut production in an attempt to make domestic u.s. Production unprofitable.

On the flip side, why would the Saudi's slow production?? Any major exporting nation could choose to cut production to up pricing.

By all accounts, cost of production is the cheapest in the middle east. Has been forever. So even if they are feeling a little pressure from all this, it's less pressure then the rest of the world.

 

[Cdnfireman]

On the flip side, why would the Saudi's slow production?? Any major exporting nation could choose to cut production to up pricing.

By all accounts, cost of production is the cheapest in the middle east. Has been forever. So even if they are feeling a little pressure from all this, it's less pressure then the rest of the world.

The saudis are the biggest producer. When they cut production the prices rise and they still generate revenue. A smaller exporting nation would have to shut in so much of their production in order to raise the prices that what's left over for them isn't enough to run their country. There's much more to this than just the acquisition cost of a barrel of oil. Most OPEC countries have only two ways of keeping their economy running. Sell oil or sell hard currency assets or gold. If the price of oil multiplied by their production capacity won't cover their budget, then they sell assets. Most can't borrow money because of their corruption problems or other negative aspects that make foreign investment impossible.
Theres a lot of OPEC countries not in the Middle East and without the wealth of Kuwait or Saudi Arabia.

 

[gates559]

I stashed away a couple of pennies, think they are becoming collector items and one day might bet worth 5 cents. Solid investment plan

Maybe if they are copper. If they are they will probably be worth a lot more than 5 cents in the future.

 

[DRD]

If you believe mainstream news there are some signs all is not well. Sliding oil prices could be the catalyst that starts a Shiite show.

 

[rightsideup]

If you believe mainstream news there are some signs all is not well. Sliding oil prices could be the catalyst that starts a Shiite show.

nice articles I down sized my house and have no debt that way. I also have no personal debt but have had in the past when I was in the habit of leasing vehicles and buying two new sleds a year with home equity loan. It does not surprise me that these figures exsist as most families drive two vehicles that are fairly new and young people finance as well. These debts while on a asset that dwindles in value still are not as bad as high interest credit card debt that some people carry.

 

[Beels]

Kindof. Except for the Hutts and big guys. Sure they can bang off a pile of acres, but don't physically have enough days to take everything at optimum. I've watched 20,000 acre farmers combining in the rain. Had they not been doing it in the rain, it would be berried in snow.

Not blaming or anything, just saying what is happening.

It doesn't matter if it's a 2000 or 20000 acre operation. If it decides it's going to rain at the wrong time during harvest, there's nothing anyone can do about that. Now, if they're under-equiped or short on labour and end up late, different story. The other issue is disease. Our area has been wet since '10 and not far from here there was in 30+ inch range from April to September. What didn't drown out, the humidity was high enough that disease took over. We had guys that had to dump cereals in the bush. Other areas are used to spraying fungicide and the tight window it requires, so it's a big adjustment. All of that is weather dependent.

 

[catalac]

Saudi are number 2 global producer at just under 10 million barrels a day, Russia just over 10, then USA China then Canada. 2013. Difference is cost of production, half our average cost per barrel to get it out.

 

[neilsleder]

Hun


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