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Source: [None] URL Source: [None] Published: Dec 14, 2015 Author: Me Post Date: 2015-12-14 09:04:14 by Justified Keywords: None Views: 1992 Comments: 20 I remember people claiming we were running out of oil. That we have reached "peak production". Oil just broke the $35 a barrel with no end in sight of slowing production! Saudi's have declared war on America. They will destroy shale oil business because its kicking their butt. America was independent of its grip for the first time in my life time. Obama is happy big little oil is getting raped by the Saudi's. I believe oil can be drilled for $30 a barrel and break even. I believe oil can be pumped out of the ground for $14 a barrel and break even. Get ready to see defaults in the small oil companies because $25 a barrel is coming. Post Comment   Private Reply   Ignore Thread   Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 18. #1. To: Justified (#0) I believe oil can be drilled for $30 a barrel and break even. You can believe the world is flat but that doesn't make it so. The shale oil guys keep saying that their breakeven is $65/bl. They continue to pump the oil they have at a loss, hoping to outlast the bad prices. But more and more of them are zombie companies in the red. And no one has money to launch more exploration or develop new wells. This is the Saudi goal. They only have to do it for a few years to squash American production in the short term. The Saudis continue to pump way below cost, subsidizing oil exports to around $100 billion a year. They supposedly have a cash surplus of $700-$800 billion in loose cash they can use to subsidize their oil losses and cripple American oil production. They want all that exploration to stop and, for wells already pumping, they want to see the inevitable decline in production from such wells. Then it will be time for the Saudis to jack the price back up. But they have to worry that they can't ever go back to $100/bl again without seeing the American oil industry make another big comeback with new wells. Tooconservative  posted on  2015-12-14   9:19:49 ET  Reply   Untrace   Trace   Private Reply   #7. To: TooConservative, Justified, All (#1) The Saudis continue to pump way below cost, subsidizing oil exports to around $100 billion a year. They supposedly have a cash surplus of $700-$800 billion in loose cash they can use to subsidize their oil losses and cripple American oil production. Ah, the Suadi's lose a little bit on every barrel they sell but make it up on volume. Got it. Thanks for clearing that up for us. SOSO  posted on  2015-12-14   11:22:20 ET  Reply   Untrace   Trace   Private Reply   #8. To: SOSO (#7) Ah, the Suadi's lose a little bit on every barrel they sell but make it up on volume. Actually, yes. They make it up after they run our producers and our active wells out of oil. It only takes a few years. Then they can jack the price up again. And if we do start exploring again, it takes 2-3 years before we can get our own oil flowing again. That 2-3 years at $90 or $100 a barrel helps the Saudis recoup their current losses to build up their nest egg for the next time they decide to crash oil prices to stop American oil again. Tooconservative  posted on  2015-12-14   13:52:14 ET  Reply   Untrace   Trace   Private Reply   #11. To: TooConservative (#8) Actually, yes. They make it up after they run our producers and our active wells out of oil. It only takes a few years. Then they can jack the price up again. And if we do start exploring again, it takes 2-3 years before we can get our own oil flowing again. That I guess you never heard of shut-in production. Check it out. SOSO  posted on  2015-12-14   19:43:51 ET  Reply   Untrace   Trace   Private Reply   #12. To: SOSO (#11) I guess you never heard of shut-in production. Check it out. I don't think it applies. Look at zombie oil companies, as they call them. They're riding down their losses and depleting their biggest production runs out of existing wells and have no money to explore for new high-volume wells. So I don't think shut-in designation applies to the current market's problems in any significant way. Tooconservative  posted on  2015-12-14   20:29:05 ET  Reply   Untrace   Trace   Private Reply   #14. To: TooConservative (#12) So I don't think shut-in designation applies to the current market's problems in any significant way. Can you put some data to support your contnetion? It is a relatively easy thing to do to shut-in a well. True that there may be some lost production capability when you go to restart production but none-the-less the proven reserves are still there ready to be produced. Also Saudi is but one of the top three producing nations. It knows how and more importantly when to play the game. Russia is also in the mix. I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else. SOSO  posted on  2015-12-14   21:43:11 ET  Reply   Untrace   Trace   Private Reply   #16. To: SOSO, TooConservative (#14) I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else. Price isn't determined by supply alone, but by supply AND demand. The GLOBAL price of Oil was driven to $100/bbl by the phenomenal growth of the Chinese economy... Now you have a situation where the Chinese economy is faltering, OPEC has turned on the spigots full blast, and the GLOBAL price of oil is tanking. Willie Green  posted on  2015-12-15   7:09:53 ET  Reply   Untrace   Trace   Private Reply   #18. To: Willie Green, TooConservative (#16) I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else. Price isn't determined by supply alone, but by supply AND demand. The GLOBAL price of Oil was driven to $100/bbl by the phenomenal growth of the Chinese economy... Now you have a situation where the Chinese economy is faltering, OPEC has turned on the spigots full blast, and the GLOBAL price of oil is tanking. Trust me on this, I am well familiar with the economic concept of supply and demand. Also trust me on this, the global price of oil has not solely been determined by supply-demand conditions for decades now. If that were true we would already have built the Keystone pipeline (as just one small example). SOSO  posted on  2015-12-15   11:35:30 ET  Reply   Untrace   Trace   Private Reply   Replies to Comment # 18. #19. To: SOSO (#18) If that were true we would already have built the Keystone pipeline (as just one small example). At today's price, it looks like that would've been a money-losing investment anyway. Willie Green  posted on  2015-12-15 11:56:06 ET  Reply   Untrace   Trace   Private Reply   End Trace Mode for Comment # 18. Top • Page Up • Full Thread • Page Down • Bottom/Latest

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