Recession just around the corner?

[pistoncontracting]

The saudis are the biggest producer. When they cut production the prices rise and they still generate revenue.

Again I ask, why should they cut production?? Sure they may still have revenue from a small rise in cost. But I doubt that would make up from the loss in production.
They don't cut production, so they don't lose market share or customers.

And with the cost of there production at less then half the rest of the world, I doubt they'll blink first.

 

[800HMX]

Anybody notice the markets lately. Looks like $3.50 Gas and $70 Oil until late into 2015. This will cause a correction! Projects will be cancelled as companies try to live within reduced cash flow and some won't make it. Fewer projects equal fewer jobs, just that simple.

Starting to see the deals and inventory. I bet there will be some bargains this Spring and even better opportunities later in 2015. Going to be an interesting ride in 2015. Going to really suck for those with big payments and a great windfall for those with cash in hand

 

[Cdnfireman]

Again I ask, why should they cut production?? Sure they may still have revenue from a small rise in cost. But I doubt that would make up from the loss in production.
They don't cut production, so they don't lose market share or customers.

And with the cost of there production at less then half the rest of the world, I doubt they'll blink first.

You're not taking the whole economic picture into consideration. There's more to their economy than just what it costs to produce a barrel of oil. They fund their whole economy on oil exports so when they trade for goods it costs money. Those costs don't change because oil is cheaper, they either have to sell more oil at a lower price or use cash reserves to buy what they need. The Saudis can eat this for a while but others can't. And if the other opec countries get desperate they will have to sell off cheaper which will destroy OPEC. This the Saudis won't allow because they then will lose control of the world oil prices. Notice they didn't say they wouldn't cut production, just not right now.
Its a political move to try and shut in production in North america. The question is whether the rest of OPEC will force a production cut first or whether the companies in North America will slow construction and development. Like I said the Americans will buy American before they buy Arab. OPEC will have to cut production sooner rather than later to survive once they realize that the U.S. won't blink. The biggest threat right now is the speculators that are starting to manipulate fears to get rich.

 

[800HMX]

You're not taking the whole economic picture into consideration. There's more to their economy than just what it costs to produce a barrel of oil. They fund their whole economy on oil exports so when they trade for goods it costs money. Those costs don't change because oil is cheaper, they either have to sell more oil at a lower price or use cash reserves to buy what they need. The Saudis can eat this for a while but others can't. And if the other opec countries get desperate they will have to sell off cheaper which will destroy OPEC. This the Saudis won't allow because they then will lose control of the world oil prices. Notice they didn't say they wouldn't cut production, just not right now.
Its a political move to try and shut in production in North america. The question is whether the rest of OPEC will force a production cut first or whether the companies in North America will slow construction and development. Like I said the Americans will buy American before they buy Arab. OPEC will have to cut production sooner rather than later to survive once they realize that the U.S. won't blink. The biggest threat right now is the speculators that are starting to manipulate fears to get rich.

Clearly a global economy with many many factors in play. Middle East oil is way cheaper to produce and ship to market. The most expensive oil is mined (Oil Sands) followed by SAGD Oil, then Shale and finally conventional. Thus logically, the only oil worth producing at $60/bbl is from the Middle East and NA Conventional. But, way more politics in play. Saudi, Iran, Libya, Venezuela and others have built and continue to support their economies/regimes around the $100 oil basis.

As mentioned above, somewhat a waiting game. NA oil and gas can barely survive at $60, yet other parts of the economy will thrive (manufacturing - out East). Pretty hard to manage all the politics (bribes) in the Middle East when cash flow is cut by 40%. World oil production has a surplus of about 1,000,000 bbls/day on 93,000,000bbls/day of consumption. Just so much more going on. Let's see how long it takes to sort it all out - 2015 at least! Who knows what the fallout will be in the meantime.

 

[rzrgade]

Hang on , it's coming real quick.62$ oil now....60 is the panic # .

Looks like it's going to be a long one too.....be a lot of cheap toys by this time next year.....

 

[Cdnfireman]

Hang on , it's coming real quick.62$ oil now....60 is the panic # .

Looks like it's going to be a long one too.....be a lot of cheap toys by this time next year.....

Maybe. I don't think its gonna be as bad as all the talking heads say. Remember when oil was $120 a barrel and all the "experts" said oil was headed for $180/bbl and the world was gonna be in trouble because high oil prices would kill the economy? Too many " experts" have an agenda and sometimes it's to spread panic.
T Boone Pickens, George soros etc are waiting for the ass to fall out of oil stocks then will swoop in and buy like crazy along with the big brokerage houses. They know things will swing back and will get richer because of it. Let's hope in the meantime us working class slobs don't get ****ed too bad.

 

[Snowdin]

Just a thought. When Saudi increase production they must bring in more tanker ships to haul out the product. Are there really a bunch of boats sitting around doing nothing and then they get real busy at the Saudi's bidding?

 

[Cdnfireman]

Just a thought. When Saudi increase production they must bring in more tanker ships to haul out the product. Are there really a bunch of boats sitting around doing nothing and then they get real busy at the Saudi's bidding?

Theyre not increasing production. They're just not cutting production. Hence no need for more "boats".

 

[Snowdin]

It sure is funny how Saudi has no military, tanks, fighter jets, Navy and yet the US don't attack or bother them.

 

[mb1]

Anyone have any info on northwest upgrader? They must be twitching now with oil this cheap.




154 XM

 

[S.W.A.T.]

It sure is funny how Saudi has no military, tanks, fighter jets, Navy and yet the US don't attack or bother them.

I think you should do some research.

Saudi Arabian Army - Wikipedia, the free encyclopedia

 

[ZRrrr]

Bank of Canada governor Poloz spoke today.

"The Bank of Canada warned Wednesday that the country's housing market could be overvalued by as much as 30%" He is predicting a soft landing, but did not shy away fro the possibility of a hard landing.

"Bank of Canada acknowledged that plummeting oil prices could be a threat to growth in this country likely shaving off 0.3% of GDP in 2015"

Debt to income ratios up again.

http://www.cbc.ca/news/business/ste...rvalued-housing-big-risk-to-economy-1.2867184

Interesting times for sure.

 

[Cdnfireman]

Everyone needs to relax and see what happens. The media is whipping this up into a frenzy as usual without regard to the facts or the consequences of their hysterical rants. They say oil " plummeted" $1 today yet when it goes up they say it " crept " up $1. All this yapping hurts no one but the working man and helps only the speculators. Everyone needs to take a breath. Keep your debt as low as you can and stay the course. Things will settle out.

 

[SUMMIT TREE]

Apparently, you and I are. (winkie face)

JEEESH....put that thing away ()......don't you remember what happened the last time you pulled it out??? LOL.

 

[Snowdin]

I think you should do some research.

Saudi Arabian Army - Wikipedia, the free encyclopedia

I made the comment based on what someone else commented about. It does look like they have some military weapons however it also looks like the US could squash them like a bug in a very short time with the tired old equipment the Saudi's have.

 

[X-Treme]

JEEESH....put that thing away ()......don't you remember what happened the last time you pulled it out??? LOL.

Hahaha. When I use it, I kinda hope that people understand why. Obviously in that case I was WAY wrong. You, sir, seem to get it.

 

[S.W.A.T.]

I think if it were the case they may have tried already. You can't just do battle with Saudi, so many other countries have invested interest there it would be suicide. Kind of like Canada, we don't have a big physical presence but we have many friends that would say oh nay nay.

I made the comment based on what someone else commented about. It does look like they have some military weapons however it also looks like the US could squash them like a bug in a very short time with the tired old equipment the Saudi's have.

 

[Snowdin]

Well my company are pulling drilling rigs out of the bush and the abandonment budget has been cut. My plans for a busy winter are down.

 

[steveo10]

My company is running 100% and have a few contractors currently. No slowdown on this end!! Til April. Lol

 

[catalac]

Buddy said he got lay off notice for Jan, his rig getting parked.