Oil prices

[gopokes88]

Saudi prince: $100-a-barrel oil 'never' again

[BDP]

Duplicate content.

[Teo9969]

Asked an executive at a local company when prices will rebound, he said "When American production cuts back 1MM-bbls/day."

[venture]

Asked an executive at a local company when prices will rebound, he said "When American production cuts back 1MM-bbls/day."

What about drill baby drill and energy independence?

[adaniel]

Saudi prince: $100-a-barrel oil 'never' again

This is coming from the same country that said back in June $100 oil was good for cosumers and the economy.

Do not believe a word Saudi Arabia says. At this point, they are just putting things out there to drive the price down. And I'd dare say they are enjoying trolling the rest of the world.

[venture]

What would the price of oil be domestically if we actually went independent and got away from dealing with outside influences? Granted that would also mean restricting oil/gas exports to ensure we have enough.

[Jersey Boss]

In what world can you regulate the pricing of a global commodity and just how would you be able to regulate how a non governmental entity sets the price? This is pie in the sky speculation.

[Jersey Boss]

This is coming from the same country that said back in June $100 oil was good for cosumers and the economy.

Do not believe a word Saudi Arabia says. At this point, they are just putting things out there to drive the price down. And I'd dare say they are enjoying trolling the rest of the world.

Here is a bit of advice- Don't believe anybody when it comes to money or power.

[ylouder]

I filled up my f150 for 48 dollars yesterday. PRAISE be to allah!!?

Or is it ahhhah?

[gopokes88]

This is coming from the same country that said back in June $100 oil was good for cosumers and the economy.

Do not believe a word Saudi Arabia says. At this point, they are just putting things out there to drive the price down. And I'd dare say they are enjoying trolling the rest of the world.

Oh I don't. I always like it when people say the word "never" in regards to pricing for any commodity not just oil. Last summer we heard over and over oil would never drop below $80.

[bradh]

What would the price of oil be domestically if we actually went independent and got away from dealing with outside influences? Granted that would also mean restricting oil/gas exports to ensure we have enough.

Interesting question, and better stated than your previously snarky response.

[venture]

Interesting question, and better stated than your previously snarky response.

The snark should be expected considering how much the talking heads pushed on the nation year after year. How else do O&G people expect us to react? Either way...anyone have any insight to an answer to my question?

[bradh]

The snark should be expected considering how much the talking heads pushed on the nation year after year. How else do O&G people expect us to react? Either way...anyone have any insight to an answer to my question?

Hey David, I respect you greatly as a poster and appreciate what you bring to the board (especially weather related). I can't give you that answer, but what talking heads are you referring to?

Decades ago outsourcing killed a vibrant textile industry in the US. No one gave a damn because they could get a cheaper shirt at Wal-Mart.

Fast forward, and you see jobs gets outsourced daily, either overseas or domestically to lower cost contractors. Depending on the industry, some care, some don't. Every now and again you hear the masses cry that "we don't make anything here" or "everything gets outsourced to XYZ." Where am I going with this? Relying so heavily on foreign oil is no different than the outsourcing of other jobs. Sure, you cheer at the pump (and disgustingly for some of you cheer the downfall of of thousands of honest hard working folks really gripping right now), but scoffing at the idea of energy independence and flicking your nose at it is just short sighted in my opinion.

Do I know what the answer is to your question is? No, but I'm fairly certain that Joe Q. Public gives two craps, because they'd rather pay $1.50 at the pump and feel good about themselves.

[venture]

Hey David, I respect you greatly as a poster and appreciate what you bring to the board (especially weather related). I can't give you that answer, but what talking heads are you referring to?

I'm referring to all the "industry" speakers for the various organizations/councils and also the respective politicians going back well before the 2008 election cycle.

Decades ago outsourcing killed a vibrant textile industry in the US. No one gave a damn because they could get a cheaper shirt at Wal-Mart.

Fast forward, and you see jobs gets outsourced daily, either overseas or domestically to lower cost contractors. Depending on the industry, some care, some don't. Every now and again you hear the masses cry that "we don't make anything here" or "everything gets outsourced to XYZ." Where am I going with this? Relying so heavily on foreign oil is no different than the outsourcing of other jobs. Sure, you cheer at the pump (and disgustingly for some of you cheer the downfall of of thousands of honest hard working folks really gripping right now), but scoffing at the idea of energy independence and flicking your nose at it is just short sighted in my opinion.

I think you mistaken me. I WANT energy independence. However, I strongly believe that no one actually in the O&G industry wants it. For one, as you mention...John Q want's his cheap gas. Are US producers going to maintain a volume of domestic production to maintain $40-60/bbl oil? Going by the reactions right now and how expensive it is to produce domestically, I don't see any shot of that happening. So now we are stuck in the position of either to maintain importing cheaper foreign oil to keep costs down here for manufacturing and transportation, or we put ourselves in the position of being a place with high costs that just encourages additional outsourcing.

I'll end without getting too political but this solidifies what I'm saying. From the House Committee on Natural Resources...

Increasing American Energy Production Will Lower Gasoline Prices, Create More Jobs - House Committee on Natural Resources

They have a section on what can provide relief to American families at the gas pump. The entire section is just more and more drilling. Increase Offshore, Increase access to ANWR, increased onshore from shale resources, approve Keystone XL, and don't increase taxes.

So why is it that the solution to lower prices at the pump involve a ton more drilling and production, but now that we are having lower prices (albeit thanks to the Saudis) that we are hearing a ton about cutbacks and reduced production. Increased access an additional production has nothing to do with lowering consumer costs at the pump. it is about giving O&G businesses more access when prices are high to increase corporate profits. That doesn't seem to be in the spirit of becoming energy independent or helping American families.

I understand every business has costs they need to cover to operate profitably. I'm just not sure that anyone is ever going to agree to what the happy medium is.

[bradh]

I never bought the "relief at the pump" angle but for a large majority of the US public, that is all they can think of when they think of oil. Jobs? It absolutely creates jobs, lots of them (although highly volatile, but many senior oil patch guys will tell you that's why the pay is so high, to prepare you for the bust times).

You are right though, no one will ever agree on the happy medium, especially this industry.

[venture]

I never bought the "relief at the pump" angle but for a large majority of the US public, that is all they can think of when they think of oil. Jobs? It absolutely creates jobs, lots of them (although highly volatile, but many senior oil patch guys will tell you that's why the pay is so high, to prepare you for the bust times).

You are right though, no one will ever agree on the happy medium, especially this industry.

I don't think anyone is doubting the ability for the industry to create jobs.

Either way, it is what it is. Hopefully my position is a bit more clear now.

[ljbab728]

Price of oil -- how low can it go? | News OK

Today’s lower prices likely will not have the same long-term effects the state and industry saw in the 1980s, University of Oklahoma Economist Robert Dauffenbach said.

“There will certainly be cutbacks in new expenditures on new projects in consequence of these lower prices, but I don’t see the Devons, Continentals and Chespaeakes of this world stopping drilling,” said Dauffenbach, director of OU’s Center for Economic and Management Research. “Indeed, there is renewed interest in drilling in Oklahoma in what is known as the SCOOP region.”

Dauffenbach doesn’t expect a huge rollback in production in response to the lower prices.

“I think that the flow of oil will continue at fairly high levels in the near term, which is a factor in the likelihood of continuing weak prices,” he said. “It may take about a year and a half to get back to the $80 level, where much of tight oil is economical.”

[Just the facts]

What about drill baby drill and energy independence?

The 'drill baby drill' part was just to make more money, the 'energy independence' part was a lie to get suckers to go along with the first part.

[ylouder]

I never bought the "relief at the pump" angle but for a large majority of the US public, that is all they can think of when they think of oil.

Ask yourself this; before you worked in the oil field did you want to pay more or less for a required commodity that you needed to get to work, school, etc?

I said it earlier, but just within my household the drop of gas prices has equated to a conservative estimate of about 30-40 dollars saved a week, or 120ish dollars a month. We live very ordinary lives (mortgage, kids, student loans, etc) and both commute less than 30 minutes each way from a suburb to different parts of the city to work. Obviously 120 dollars a month won't make or break us, but it does have a positive impact on being able to keep it in your pocket vs paying it for a fuel that you have to use each month.

Now, if you look at that savings for every single household that doesn’t work within oil across the state and country, the savings is astronomical and an incredible boost to the economy.

I think a lot of you guys are having problems processing that because you over assume the amount of people who work in the industry. If you would rather dish out $1200 extra dollars a year for a product that you had to buy regardless of the price; then I can't help you understand the 'relief at the pump'.

[bradh]

Ask yourself this; before you worked in the oil field did you want to pay more or less for a required commodity that you needed to get to work, school, etc?

I said it earlier, but just within my household the drop of gas prices has equated to a conservative estimate of about 30-40 dollars saved a week, or 120ish dollars a month. We live very ordinary lives (mortgage, kids, student loans, etc) and both commute less than 30 minutes each way from a suburb to different parts of the city to work. Obviously 120 dollars a month won't make or break us, but it does have a positive impact on being able to keep it in your pocket vs paying it for a fuel that you have to use each month.

Now, if you look at that savings for every single household that doesn’t work within oil across the state and country, the savings is astronomical and an incredible boost to the economy.

I think a lot of you guys are having problems processing that because you over assume the amount of people who work in the industry. If you would rather dish out $1200 extra dollars a year for a product that you had to buy regardless of the price; then I can't help you understand the 'relief at the pump'.

I don't work in the oil patch, sorry to disappoint you.

What I was saying was I never bought any industry angle that energy independence would lead to relief at the pump. I am fully aware how much cheaper it is for you to fill up your F150 right now and how much that helps your family. The second part of my comment was that in large part, the American public is clueless about the energy industry other than "they make a lot of money" or "they're gouging me at the pump." They also risk more money than probably any other industry. The processes across the industry are incredibly complex and unless you really educate yourself it's hard to understand (I certainly don't know as much as a lot of others here).

What I'm getting at is, no one (that includes the public and the investors/executives themselves) gives one small crap about American workers or industries that can easily be sent elsewhere, because they just want cheap goods. So all of you cheering the slide of an industry should probably never complain or comment again about being mad at businesses not valuing American workers or goods when they ship jobs overseas so you can have a $30 pair of jeans as opposed to $50, etc.

[ylouder]

But you have mentioned you work in the industry.

You keep mentioning some sorta socialist utopia where I (the rest of society) have to pay additional cost to provide jobs to a local industry that refuses to refine processes and lower cost to compete.

[bradh]

But you have mentioned you work in the industry.

You keep mentioning some sorta socialist utopia where I (the rest of society) have to pay additional cost to provide jobs to a local industry that refuses to refine processes and lower cost to compete.

No, I work water & sewer, not oil.

I'm by no means advocating what you describe, but yeah that's what it sounds like. I was just speaking to venture's initial question about energy independence. You appear to be okay with free market now as it pertains to O&G, but boy you spit the hate when that same free market yields good returns for those in that industry.

I'm also curious what you are referring to when you say "an industry that refuses to refine processes and lower costs to compete." I wasn't aware we were still drilling only vertically by rigs constructed of wood like the old Spindletop days. There are highly skilled people who do just what you say. You don't think there are engineers at firms across the world trying to figure out how to make tight oil (and other higher cost plays) profitable at lower levels?

[ylouder]

I understand the reasoning for wanting a happy median. No one besides investors wants dramatic swings in either direction, they are hard for businesses and families to plan around. I get that.

I just don't subscribe to the idea that they need to be artificially high (and paid for by all of us) to support drilling in a specific state.

[bradh]

No one besides investors wants dramatic swings in either direction.

no lie...to that point, if oil hits $30 it might be time to go long on oil

[C_M_25]

Iran's Rouhani says countries behind oil price drop will suffer

This is what has me worried about the entire oil situation. I have felt all along that if oil stays low and Iran's and Russia's economies become burdened, that it wouldn't take long for the threats to start coming through. If Iran decides at some point to act out beyond words, we could be looking at a very serious situation. Honestly, I wouldn't put it past Iran to push the envelope here.