Posted on 01/05/2015 4:51:29 PM PST by rdl6989
Time to start stocking up.
How right you are.
Enjoy the short term prices. Once the Muslums drive out the highly-leveraged operators in America, the prices will go higher than they were before. You can count on it. That is their end game.
It’s called supply and demand. Iraq producing higher than its good old days. USA producing heavily, Venezuela is producing all it can for current revenue since its going broke. Norway is a big producer, can’t cut or it can’t keep supporting its welfare system. And the Saudis capped it by not cutting production (which caused the rest of OPEC to follow suit).
We have an oversupply. It will probably last a while, but the bottom in price will should be reached in the next 3-4 months. Private producers will cut production as feasible, which will cut supply. That will lower the downward pressure and eventually the price may find a more stable period. Govts (most of the market) will keep right on pumping, slowing the cycle somewhat.
These cycles have happened quite a few times, it’s a good idea to study the history.
Large price changes in huge markets are always opportunities, no matter the current direction of the change.
No, sorry... I suffer from dyslexia.
Saudi oil production is down in 2014. US production is up. The Russians continue to produce more oil than any other country.
Not sure what you think the Saudis are doing.
That's a most interesting observation of a market distortion few consider. Some of these suppliers can't respond in a "rational" (market driven) manner. If anything, with a sustained price drop, they need to pump more, not less, to maintain revenue. Others want to maintain market share.
The Saudis probably could cut production further, especially with their huge cash reserves, but are more interested in sticking it to Iran (and may not mind dinging some marginally profitable producers elsewhere.) That said, they do seem to be putting on the brakes just a bit:
http://www.bloomberg.com/news/2015-01-06/saudis-raise-price-of-main-oil-grade-for-asian-buyers.html
Agreed, although I believe that if you add in natural gas liquids, the U.S. is actually now #1? Or is that in dispute?
I think few understand just how far reaching the oil and gas business is in the US. A 50% drop in crude prices hit’s millions of people all across the country. Remember we have 39 oil producing states.
We and many like us will just continue what we’re doing, we drill and produce. This is a perfect time for those of us who are not over extended, we pick up leases others are dumping to conserve what little they have left. Every time this happens we get stronger.
They are not really doing anything but rhetoric. The Eagle Ford and Bakken did not change the supply and demand of the entire world market but $100 oil did.
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