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Thread: Oil prices

  1. #26

    Default Re: Oil prices

    Quote Originally Posted by Bellaboo View Post
    Anyone notice has gasoline has dropped 30 % but diesel hasn't really budged ?
    I believe that is due in part to winter heating demand using diesel.

  2. #27

    Default Re: Oil prices

    Does anybody think this could be a repeat of the early 1980s?

  3. #28

    Default Re: Oil prices

    Quote Originally Posted by bchris02 View Post
    Does anybody think this could be a repeat of the early 1980s?
    No.

  4. #29

    Default Re: Oil prices

    Quote Originally Posted by gopokes88 View Post
    Nobody knows. The Saudis, U.S. producers, the rest of opec and Russia are basically playing Russian roulette with prices to see who goes bankrupt first.
    So Oil is acting more like a market again, verses a price controlled cartel

  5. #30

    Default Re: Oil prices

    It will be interesting to see what happens next week. Trading was fairly light today after the holiday, will oil continue to take a beating when things get back to normal on Monday? Some are predicting we'll see it drop past the previous low of $58 set back in July 09.

    I told myself if CLR drops to $50 I'll buy some (previously bought at $65). I didn't expect to see it at just under $41 today!

  6. Default Re: Oil prices

    Quote Originally Posted by sooner88 View Post
    While it will help many sectors, the market is is killing the O&G sector (specifically the oil-heavy companies - CLR ~-20%). We obviously have one of the largest oil and gas presences in the country with companies that are heavily involved in the community. If OPEC keeps the production at the same level, oil prices sustained at this level could have a relatively large impact on OKC (whether it is decreased development, community donations, etc.).
    OKC will be fine. The market is probably diversified enough to handle a blow to oil prices. If it can't, then it means it needs to further evolve to stop being so dependent on one sector. I get it is huge here, but many sectors from manufacturing to aerospace would love nothing more than to see the price crash to the floor.

  7. #32

    Default Re: Oil prices

    It was only ten years ago there was groups concerns about if the economy would collapse when Oil went above fifty dollers per barrel

  8. #33

    Default Re: Oil prices

    I think we are a lot more diversified so I don't foresee a lot of damage to the metro...Now the energy companies might reduce the number of 25% of salary annual bonuses but that's about it

  9. #34

    Default Re: Oil prices

    Quote Originally Posted by Snowman View Post
    So Oil is acting more like a market again, verses a price controlled cartel
    Exactly. Previously when the market was oversupplied the Saudis and smaller opec producers would cut production to boost the price. However the Saudis have realized their biggest customer (US) will soon be energy independent. They are losing market share and looking for new buyers (China, India, and other developing countries). At this meeting they basically said were not cutting anymore someone else can do it.

    Yesterday the cartel died. This may hurt OKC and Ok while they adjust to the new world, in the long run it is a great thing. And like every other free market industry. Theyll find a way to make money.

  10. #35

    Default Re: Oil prices

    Quote Originally Posted by BG918 View Post
    It will be interesting to see what happens next week. Trading was fairly light today after the holiday, will oil continue to take a beating when things get back to normal on Monday? Some are predicting we'll see it drop past the previous low of $58 set back in July 09.

    I told myself if CLR drops to $50 I'll buy some (previously bought at $65). I didn't expect to see it at just under $41 today!
    Light trading?
    CLR had a 20% decline on 3 times volume! That's a huge sell. Don't but yet, no point trying to catch a falling knife. This has room to fall more, unfortunately.

    SD had a 26% decline on almost double volume, also a huge sell.

    Total market trading was light because of the short day, but MONSTER sell volume on shale stocks. Avoid for now, wait for a bottom. Don't buy the falling knife yet.

  11. #36

    Default Re: Oil prices

    Quote Originally Posted by catch22 View Post
    Light trading?
    CLR had a 20% decline on 3 times volume! That's a huge sell. Don't but yet, no point trying to catch a falling knife. This has room to fall more, unfortunately.

    SD had a 26% decline on almost double volume, also a huge sell.

    Total market trading was light because of the short day, but MONSTER sell volume on shale stocks. Avoid for now, wait for a bottom. Don't buy the falling knife yet.
    I'm thinking $30 is my new target. You're right next week could be a bloodbath.

  12. #37

    Default Re: Oil prices

    This guy on the video is a well-respected industry expert. OKC and Oklahoma will NOT be totally fine and it would be naive to entertain such thoughts!
    I have seen this before and knew it was coming… We can expect significant job cuts and declining tax revenues. The only questions are how much and how long?

    Be careful what you wish for because this is only setting the table for another devastating oil price hike.

    Shale Oil: U.S. Will See Major Drop in Activity: Verleger: Video - Bloomberg

  13. #38

    Default Re: Oil prices

    Very sobering indeed. I remember the neighborhoods in Tulsa devastated with abandoned homes lining the blocks.

    In what ways have OKC diversified its economy? Western OK will certainly suffer so that will affect retail in OKC.

  14. #39

    Default Re: Oil prices

    More medical, enhanced quality of the aviation sector, more overall business.

    Oil is still king here, but not quite the same way it was in the 80s. I think OKC will be okay if this is a 6 - 18 month thing (obviously the longer it goes on, the more damage will be done)…much past 18 months and OKC is going to start encountering serious problems. The state at large is more exposed to oil than the city.

    I think if things don't bottom out and subsequently start improving within 8 months, some OKC companies will be subject to getting bought out by big boys.

  15. Default Re: Oil prices

    I guess US producers should pump more to get us energy independent to avoid being impacted by OPEC. Oh wait...that would mean that producers actually would invite lower prices which is obviously not the case. Let it keep on falling. It may sting a little for those too invested in oil and gas, but the rest of the nation needs a break.

  16. Default Re: Oil prices

    Quote Originally Posted by venture View Post
    I guess US producers should pump more to get us energy independent to avoid being impacted by OPEC. Oh wait...that would mean that producers actually would invite lower prices which is obviously not the case. Let it keep on falling. It may sting a little for those too invested in oil and gas, but the rest of the nation needs a break.
    What a ridiculous statement. How can we invite lower prices if it's not economical to drill and produce at lower prices? It's not just those invested in it but those that work in the oil industry at every level and all of the industries that support it. If this price decrease last for a prolonged amount of time. It will affect everyone in OKC and the state in some way or another. Sorry you don't like paying $3 a gallon for gas, but saying "let it keep falling" is ridiculous if you enjoy what's happening in OKC right now. We may have diversified somewhat but make no mistake, if there is a true "bust" it will profoundly affect all the development we discuss here.

  17. #42

    Default Re: Oil prices

    CLR and SD will most likely be the first to have significant issues. Continental had most of their oil production hedged at higher prices, and completely cut all of their hedges thinking oil would skyrocket. Obviously that does not seem to be the case. Some of the other companies have some of their production hedged next year, so they may be able to hold it all together for a while.

    SD is just cheap and doesn't have a lot of cash. With the price action, they can be bought for a little over a billion dollars. Or they can sell their assets for el cheap if need be.

    Great time to own an airline right now, but OKC and Oklahoma as a whole are at tremendous risk right now. Time will tell if we are diversified enough, and I don't believe we are. Everyone that lives in OKC either directly works for an O&G company or have a close relative that does. Every family in Oklahoma will have some issue if prices stay low for long.

    The extra $10 a week it costs to fill up the car is a small price to pay for the exponential quality of life increases we are seeing in Central Oklahoma.

  18. #43

    Default Re: Oil prices

    For 2 car households that could mean another $100-$150 in more monthly disposable income used on non energy businesses...We should be fine unless this is the new norm

    My guess? Media talking up $5 gas in less than 2 years

  19. #44

    Default Re: Oil prices

    Quote Originally Posted by PhiAlpha View Post
    What a ridiculous statement. How can we invite lower prices if it's not economical to drill and produce at lower prices? It's not just those invested in it but those that work in the oil industry at every level and all of the industries that support it. If this price decrease last for a prolonged amount of time. It will affect everyone in OKC and the state in some way or another. Sorry you don't like paying $3 a gallon for gas, but saying "let it keep falling" is ridiculous if you enjoy what's happening in OKC right now. We may have diversified somewhat but make no mistake, if there is a true "bust" it will profoundly affect all the development we discuss here.
    If this is a 1983 style crash as was suggested on the video it’s pretty obvious there is a lack of comprehension by some about the negative possibilities for our metro and state.

    About 28% of our states tax base is derived from the energy sector. The state will be forced to make major budgets cuts, layoffs, raise taxes and fees… This means things won’t get done that we would like to see.

    Private money will dry up overnight for developments new old and new, with more layoffs.

    Home values will drop for everyone including the entire OKC metro. From 1983 to about 1989 it wasn’t uncommon to see home values that dropped by about half in much of Oklahoma. There will be many underwater mortgages.

    Corporations will make personnel cuts and drive up unemployment. Many of these people are highly skilled and will be in direct competition with those who are not in the energy business… Higher unemployment will hold wages down.
    In the 80’s many people left our state and escaped to Texas. But that's less likely this time.

    Other impacts would mean there would be a good chance that donations to causes and attendance for Thunder drops significantly. Without the major corporate support how long will the Thunder franchise last in OKC? Even the ownership will be under pressure.

  20. Default Re: Oil prices

    Quote Originally Posted by PhiAlpha View Post
    What a ridiculous statement. How can we invite lower prices if it's not economical to drill and produce at lower prices? It's not just those invested in it but those that work in the oil industry at every level and all of the industries that support it. If this price decrease last for a prolonged amount of time. It will affect everyone in OKC and the state in some way or another. Sorry you don't like paying $3 a gallon for gas, but saying "let it keep falling" is ridiculous if you enjoy what's happening in OKC right now. We may have diversified somewhat but make no mistake, if there is a true "bust" it will profoundly affect all the development we discuss here.
    Honestly, the ridiculous thing is the propaganda this country has had to endure for 10 years. All we here about from O&G special interests is how energy independence through increase production will help lower costs for all Americans. Yet when the prices start dropping due to an outside influence, mainly because there is no too much supply to support the higher prices, we see the O&G people crying that it is going to hurt their business. My point - O&G had absolutely no desire for lower oil prices. They love the billions in profits they are getting, and if I owned one of them I would do. Capitalism at its finest. I don't despise it at all. I have the issue with hearing how increased production is going to lower costs and save money for Americans...but it is obvious the industry doesn't want that. They just want greater access to drilling lands that they can utilize when prices are extremely high and then sit on it when it is low...not increase production to bring fuel prices down.

    Lower oil prices are a good thing if you aren't tied to the hip to the industry. I'm not. I have zero family members directly connecting to the industry. I do however have family members in the airline industry, manufacturing, and others that will greatly benefit from lower fuel costs. In the grand scheme the cheaper it is to transport people and items, the cheaper thing start to become at the grocery store again. If that means OKC can't have a new convention center, then that highlights the city needs to do a better job of diversifying. Aerospace, medical researching, etc...all can bring high dollar jobs to the Metro.

  21. #46

    Default Re: Oil prices

    Quote Originally Posted by ou48A View Post
    If this is a 1983 style crash as was suggested on the video it’s pretty obvious there is a lack of comprehension by some about the negative possibilities for our metro and state.

    About 28% of our states tax base is derived from the energy sector. The state will be forced to make major budgets cuts, layoffs, raise taxes and fees… This means things won’t get done that we would like to see.

    Private money will dry up overnight for developments new old and new, with more layoffs.

    Home values will drop for everyone including the entire OKC metro. From 1983 to about 1989 it wasn’t uncommon to see home values that dropped by about half in much of Oklahoma. There will be many underwater mortgages.

    Corporations will make personnel cuts and drive up unemployment. Many of these people are highly skilled and will be in direct competition with those who are not in the energy business… Higher unemployment will hold wages down.
    In the 80’s many people left our state and escaped to Texas. But that's less likely this time.

    Other impacts would mean there would be a good chance that donations to causes and attendance for Thunder drops significantly. Without the major corporate support how long will the Thunder franchise last in OKC? Even the ownership will be under pressure.
    This is definitely a sobering scenario but definitely a worst-case possibility. I really hope it doesn't come to this.

    What I would like to know is at what price for how long would nightmare scenarios start to play out. It will probably start with hiring freeze and bonus cuts at the major companies, followed by layoffs, and ultimately buyouts and bankruptcies. Obviously for each stage of collapse, a different price point and length of time at that price is required.

  22. #47

    Default Re: Oil prices

    One more thing I wanted to mention. OKC did seem to weather the drop from $150 to $35 in late 2008 and early 2009. By mid 2010 prices were headed back up. Not sure how different the market is now than it was back then.

  23. #48

    Default Re: Oil prices

    Quote Originally Posted by bchris02 View Post
    This is definitely a sobering scenario but definitely a worst-case possibility. I really hope it doesn't come to this.

    What I would like to know is at what price for how long would nightmare scenarios start to play out. It will probably start with hiring freeze and bonus cuts at the major companies, followed by layoffs, and ultimately buyouts and bankruptcies. Obviously for each stage of collapse, a different price point and length of time at that price is required.
    I hope it’s not this bad either, but the 80’s bust was worse than this and actually the post is not the worst case possible… we have a world economy that should be helped by lower oil prices… But a return to recession conditions would make it much worse for us. It would be like a depression in our area.
    I hope an improved national economy picks up enough to help us.
    Obviously the lower crude goes the more it hurts. I have read informed speculation that says the Saudis can stand crude prices at about $50 for a considerable period of time. They have the spare capacity to keep crude at those prices for as long as they need. After several months or years of lower drilling rates and shale depletion the Saudis could then let crude rise without near as much shale oil high cost crude on the market. Then we start the cycle all over again. The damage to such things as the airlines begins.

    A few corporations had already started cutting their CAPEX... so the impact has already started.

  24. Default Re: Oil prices

    If Oklahoma and oil companies were smart it would start heavily investing in the research, manufacturing, and transportation of alternative fuel and petroleum products and bi-products now. Even if prices were to balance out now, it should be a reminder to TPTB and to companies that traditionally are in the petroleum companies that it is a business that is drying up and becoming harder to produce. IBM re-imagined it's self when PCs started to become more and more popular and cheaper to produce, I am sure the smart oil and gas companies can do the same. Oklahoma can be a leader in both production and r&d.

  25. #50

    Default Re: Oil prices

    Venture, this would be comparable to someone starting a new airline with almost unlimited funds and hundreds of airplanes -- and trying to crush at least one of every network carriers fortress hubs with $10 fares and trying to see who will blink first.

    The public rejoices at the lower fares but doesn't see the devastation it will cause when the companies go bankrupt.

    We need profitable prices in all American industries -- transportation, energy, retail, etc. American energy is fighting the same fight the American air carriers against Emirates -- effectively unlimited funds and a long duration of time to wait it out. Luckily, foreign carriers are restricted from operating US domestic flights or Emirates would be trying to crush our airline industry at the same time ME is trying to crush our energy industry.

    We need balance. $150 oil is just as bad as $40 oil. $80-90 seems to be a good equilibrium for now. Just as $1000 one way to DFW is just as bad as $19 one way to DFW. $130 is good!

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