Widgets Magazine
Page 3 of 104 FirstFirst 1234567853103 ... LastLast
Results 51 to 75 of 2598

Thread: Oil prices

  1. #51

    Default Re: Oil prices

    Quote Originally Posted by catch22 View Post
    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!
    Agree with this 100%. Oil needs to be in a range where producers can be profitable but it cannot be so expensive that it chokes off consumer spending like it did when it peaked in 2008.

    It seems like now we are seeing a complete reverse of the situation we saw in the summer of 2008.

  2. Default Re: Oil prices

    Quote Originally Posted by catch22 View Post
    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!
    I don't disagree with you, but at the same time...even when oil was in the $80-90 range we still heard about how opening more lands will increase production and lower energy prices. When in truth the energy companies don't want lower prices for the products they are making, they just want more access. While $30-40 may be way to low, I still think the prices need to come down from where they have been. Some articles that counter all the negative news out there from when this started back in October...

    Oil Prices Fall and the Global Economy Wins - Businessweek

    “A $10 fall in the price of oil transfers the equivalent of 0.5 percent of world GDP from oil producers to oil consumers,” he writes. That in turn will have a knock-on effect on global consumption, because consumers tend to spend more of their income than businesses. Assuming consumers spend half their savings from cheaper oil, Kenningham continues, “a $10 fall in the oil price would boost global demand [for goods and services] by 0.2 to 0.3 percent.”
    Oil prices are falling ? and that?s good for the U.S. and bad for Russia - The Washington Post

    CNBC's Kudlow has an interesting take on this. Essentially the freak out is unwarranted and is being fueled by the select few that will be most impacted by the price drop, but in the end it is better for the vast majority.

    Low oil prices are a free-market victory?commentary

    And the latest oil-price drop of nearly $8 a barrel makes the economic outlook even rosier. Apart from the declining share prices of some oil producers, virtually every other aspect of the world economy benefits, including most world stock markets. (By the way, the IEA reports that most production in the Bakken formation, one of the main drivers of shale-oil output, remains profitable at or below $42 a barrel.) And here in the U.S., the oil-price drop is a huge tax cut that will primarily help the middle class.
    So if the shale-oil producers can still make money even below $40...why so much freak out of just falling under $70? To me that shows they are more worried about losing their massive cash cushion, not that they are suddenly going to be bankrupt. At the end of it they need to do what most industries have already - evolve or die. What frivolous expenses have they been banking on for years that they need to rethink at this point?

    As energy prices are falling, GDP is being revised higher. Real economic growth in the third quarter shifted up from 3.5 percent to 3.9 percent, led by an increase in business fixed investment. The last two quarters averaged 4.2 percent at an annual rate.
    Again...people in the Midwest, Northeast, and West Coast are cheering for this to continue. It means lower costs for their industries and finally able to rebound. Believe it or not, the economy is not that great once you get out of fly over country. Energy costs have a lot to do with that. If that means the center of the country needs to feel a little pressure now so the rest of the country can become robust with growth again, then so be it. There are a lot more people in those areas that can be impacted by a positive upswing compared to those that live all through the Plains states. We need to have a good balance for the nation's economy to hum along...unfortunately it is still too slanted and uneven that while we thrive the majority of the country is still lagging.

  3. #53

    Default Re: Oil prices

    Quote Originally Posted by venture View Post
    I don't disagree with you, but at the same time...even when oil was in the $80-90 range we still heard about how opening more lands will increase production and lower energy prices. When in truth the energy companies don't want lower prices for the products they are making, they just want more access. While $30-40 may be way to low, I still think the prices need to come down from where they have been. Some articles that counter all the negative news out there from when this started back in October...

    Oil Prices Fall and the Global Economy Wins - Businessweek



    Oil prices are falling ? and that?s good for the U.S. and bad for Russia - The Washington Post

    CNBC's Kudlow has an interesting take on this. Essentially the freak out is unwarranted and is being fueled by the select few that will be most impacted by the price drop, but in the end it is better for the vast majority.

    Low oil prices are a free-market victory?commentary



    So if the shale-oil producers can still make money even below $40...why so much freak out of just falling under $70? To me that shows they are more worried about losing their massive cash cushion, not that they are suddenly going to be bankrupt. At the end of it they need to do what most industries have already - evolve or die. What frivolous expenses have they been banking on for years that they need to rethink at this point?



    Again...people in the Midwest, Northeast, and West Coast are cheering for this to continue. It means lower costs for their industries and finally able to rebound. Believe it or not, the economy is not that great once you get out of fly over country. Energy costs have a lot to do with that. If that means the center of the country needs to feel a little pressure now so the rest of the country can become robust with growth again, then so be it. There are a lot more people in those areas that can be impacted by a positive upswing compared to those that live all through the Plains states. We need to have a good balance for the nation's economy to hum along...unfortunately it is still too slanted and uneven that while we thrive the majority of the country is still lagging.
    Shades of the '80s bust. People left the flyover energy states that were formerly doing well, in droves, in search of employment in those recovering coastal areas. It seemed to me at the time to be last to move here, first out. Do hope it doesn't get that bad again.

  4. #54

    Default Re: Oil prices

    I hope venture is right.

    In every crisis you have the eternal optimist and the doom and gloomer predicting a worst-case scenario. The reality always falls somewhere between the two extremes.

  5. #55

    Default Re: Oil prices

    I talk to a lot of people in the oil and gas industry. Nobody seems to be freaking out yet. There are some strategic advantages to lower prices. The lower prices gives these companies leverage to drive down royalty % and drives down the cost to lease the acreage. Secondly there are global forces at work. How much reserves do the Saudis have? There is a wide debate about that. Also the Saudis are still for the most part using very conventional drilling techniques. If they begin to deplete their current reserves by continuing to pump oil into the market at the current pace, at some point they've hit their peak oil by conventional means. When they want to try alternative methods they will have to come to the US for help. Short term it could backfire for the Saudis considering they have a wide swath of their society beholden to income from oil. It could potentially destabilize them politically.

  6. #56

    Default Re: Oil prices

    Duplicate.

  7. #57

    Default Re: Oil prices

    Oil was up over $2.50 earlier today.

  8. #58

    Default Re: Oil prices

    Fall baby fall!

  9. #59

    Default Re: Oil prices

    U.S. shale producers' 'knives are already out': Yergin

    While oil prices are down after OPEC refused to curtail production, it won't have a big impact on output from U.S. shale producers, at least for the near term, IHS' Dan Yergin told CNBC on Monday.

    "There's a lot of momentum in the system so I think you don't really see the big impact of it in terms of output until the second half of the year," Yergin, the global information and analytics firm's vice chairman, said in an interview with "Street Signs."

    That said, every company is now looking at what it can slow down, cut or postpone, he said. "The knives are already out."

    U.S. crude settled up $2.85, or 4.3 percent, at $69 a barrel on Monday, rebounding from a five-year low.

    Benchmark Brent crude was last up over $72 per barrel. It had fallen by almost $3 earlier to shy of $64, a low since July 2009.

    Oil is still down about 10 percent since OPEC decided Thursday not to cut output. Both Brent and U.S. crude have fallen for five months in a row, marking the longest losing streak in oil since the 2008-2009 financial crisis.

    Yergin doesn't think the cartel's move was directly aimed at U.S. producers, even though the surge in U.S. oil production seemed to take the world by surprise.

    "The Gulf countries in OPEC have a lot else at stake in their relationship with the United States," he explained. "I think what has happened by their saying let the market take care of this, what they've really done is said the high-cost oil, the oil with a lot of debt, is at risk."

    The big producing nations, like Saudi Arabia, also have their eyes on neighbors like Iran and Iraq.

    "The Saudis and the others said we are just not going to cut back and let others take our market share," Yergin said.

    As for those who thought U.S. oil production was a bubble, they were clearly mistaken, he said.

    "It's not a bubble. It's really a whole new thing redefining the global oil market," Yergin said. "It's happened so fast that really the market was in a sense taken by surprise by it."

    We're all good. Market forces will balance production back out to a level that proves profitable. Is the "boom" over for a while? Probably. Are we going to go bust? Probably not.

  10. Default Re: Oil prices

    I believe you will start to see a steady decline in the number of operated rigs early in 2015. Budgets are in; hedging contracts are coming to an end; and drilling will be curtailed. High-cost areas are already producing at a loss and will lay down their rigs soon.

  11. #61

    Default Re: Oil prices

    Quote Originally Posted by Chicken In The Rough View Post
    I believe you will start to see a steady decline in the number of operated rigs early in 2015. Budgets are in; hedging contracts are coming to an end; and drilling will be curtailed. High-cost areas are already producing at a loss and will lay down their rigs soon.
    I agree

    If oil prices stay flat or continue to fall CAPEX will fall.
    Over the next 6 to 9 months as this unwinds the picture will start looking a lot different to even many who work in the industry.
    Drilling and exploration operations depend a great deal on borrowed money. The ability to borrow money has already taken a serious hit and will only be further harmed as revenues drop.
    This eventually means lower employment rates in this sector of the economy.

  12. Default Re: Oil prices

    Quote Originally Posted by ylouder View Post
    Fall baby fall!
    Not what you want to see if you like development in OKC.

  13. #63

    Default Re: Oil prices

    Oil needs to be roughly in the $75-$100 range. If it stays there it's expensive enough producers can make a profit but cheap enough that it doesn't break the back of the consumer. Hopefully it heads back up there going into the next year. Today saw quite a jump, but it could just be a bounce due to how far it fell on Friday. We definitely don't want to see it go north of $110 just like we really don't want it below $60.

  14. Default Re: Oil prices

    Quote Originally Posted by bchris02 View Post
    Oil needs to be roughly in the $75-$100 range. If it stays there it's expensive enough producers can make a profit but cheap enough that it doesn't break the back of the consumer. Hopefully it heads back up there going into the next year. Today saw quite a jump, but it could just be a bounce due to how far it fell on Friday. We definitely don't want to see it go north of $110 just like we really don't want it below $60.
    If you think $75-100 is cheap enough to not break the back of the consumer you are delusional to what is going on across the rest of the country. The only parts of the country that don't want to see it drop anymore are those that haven't diversified their economies enough to handle a drop in energy prices. Just like the areas that rely on manufacturing didn't plan for high energy prices and the impact it will make. Oil needs to get down to around $50 to let the rest of the country catch up.

    We will be fine. The whole point of increase production was suppose to be energy independence and lower fuel costs...wasn't it? Funny how once it drops, all the oil guys are crying. I want to avoid politicizing this too much, but google Speaker Boehner's comments about when gas hit $3.96 in 2008. The push was to increase produce to get gas prices back to $1.63. Production has increase but prices remained high until just recently. So what story is the oil industry going to go with now? A lot of interesting double talk now when prices start falling. They people that pledged it apparently never wanted it.

  15. #65

    Default Re: Oil prices

    Quote Originally Posted by venture View Post
    If you think $75-100 is cheap enough to not break the back of the consumer you are delusional to what is going on across the rest of the country. The only parts of the country that don't want to see it drop anymore are those that haven't diversified their economies enough to handle a drop in energy prices. Just like the areas that rely on manufacturing didn't plan for high energy prices and the impact it will make. Oil needs to get down to around $50 to let the rest of the country catch up.

    We will be fine. The whole point of increase production was suppose to be energy independence and lower fuel costs...wasn't it? Funny how once it drops, all the oil guys are crying. I want to avoid politicizing this too much, but google Speaker Boehner's comments about when gas hit $3.96 in 2008. The push was to increase produce to get gas prices back to $1.63. Production has increase but prices remained high until just recently. So what story is the oil industry going to go with now? A lot of interesting double talk now when prices start falling. They people that pledged it apparently never wanted it.
    You know what? I don't want the rest of the country to catch up. We dealt with decades when gas was $1.00 a gallon and the rest of the country had booming growth. We need time to catch up. We aren't diversified enough. High energy prices result directly in job growth and prosperity in Oklahoma.

  16. #66

    Default Re: Oil prices

    If oil prices continue to drop (and some are now estimating it could bottom out at $40) is there going to be a magazine with a new 'Top 10: Boom-proof Cities' with OKC near the top? Here is an interesting question. What happens if fraking becomes unprofitable and takes a short break, and the earthquakes stop?

  17. #67

    Default Re: Oil prices

    Quote Originally Posted by bchris02 View Post
    Oil is currently at $74/bbl. Some reporters are now predicting $50 oil next year which
    could be a cause of concern for OKC.

    Why oil is more likely to test $50 than $100 again next year

    For those who know the industry more than I do, is this something to really be
    concerned about?
    I don't want to make this a political thing but I can't help but notice that the price of
    gasoline has dropped significantly since the last election.

    Is this because voters have elected a group that is pro business?

  18. Default Re: Oil prices

    Quote Originally Posted by venture View Post
    If you think $75-100 is cheap enough to not break the back of the consumer you are delusional to what is going on across the rest of the country. The only parts of the country that don't want to see it drop anymore are those that haven't diversified their economies enough to handle a drop in energy prices. Just like the areas that rely on manufacturing didn't plan for high energy prices and the impact it will make. Oil needs to get down to around $50 to let the rest of the country catch up.

    We will be fine. The whole point of increase production was suppose to be energy independence and lower fuel costs...wasn't it? Funny how once it drops, all the oil guys are crying. I want to avoid politicizing this too much, but google Speaker Boehner's comments about when gas hit $3.96 in 2008. The push was to increase produce to get gas prices back to $1.63. Production has increase but prices remained high until just recently. So what story is the oil industry going to go with now? A lot of interesting double talk now when prices start falling. They people that pledged it apparently never wanted it.
    Some food for thought re: falling oil/gas prices corresponding to increased consumption and economic returns:

    "Personal Consumption Expenditure (PCE) number that comprises roughly 2/3rds of the economic GDP calculation. Therefore, we can also analyze falling gasoline prices as it relates to total PCE. Again, falling gas prices should lead to increases in PCE."


    "While the argument that declines in energy and gasoline prices should lead to stronger consumption sounds logical, the data suggests that this is not actually the case. With consumers heavily leveraged already, any increases in disposable incomes from lower gasoline prices are likely negligible in terms of their monthly spending.

    Historically, when the 24-month rate of change in oil prices has exceeded 100%, it has been a precursor to economic weakness.
    "

  19. Default Re: Oil prices

    Quote Originally Posted by Prunepicker View Post
    I don't want to make this a political thing but I can't help but notice that the price of
    gasoline has dropped significantly since the last election.

    Is this because voters have elected a group that is pro business?
    No. There are a multitude of reasons for the decrease in unleaded gasoline prices, not the least of which is a rapidly strengthening dollar against foreign currencies, coupled with an oversupply of crude being injected into the global market. These factors, combined with forecasts for slowing global growth, have led to a drastic reduction in the price of crude, which is the primary cost driver for gasoline (also refining capacity which is another story).

  20. Default Re: Oil prices

    Quote Originally Posted by hoyasooner View Post
    You know what? I don't want the rest of the country to catch up. We dealt with decades when gas was $1.00 a gallon and the rest of the country had booming growth. We need time to catch up. We aren't diversified enough. High energy prices result directly in job growth and prosperity in Oklahoma.
    I completely get where you are coming from and don't really disagree with the general principle behind it. How much time does it take for us to catch up? How can we possibly diversify when you have a tax structure that is so slanted towards O&G with incentives that other industries aren't likely to get the same treatment? We all want diversification, but then we throw billions at O&G in tax breaks that we remain dependent on them.

    There will be a time when oil crashes...is this it? I'm not sure. If anything this should be a warning shot to wake us up to make sure we are doing more. I am excited for the opportunities that OKC has had from this boom, but I hate seeing a large portion of the country brought down because of it. There has to be a happy balance and perhaps with this adjustment in prices we are finally going to get there.

  21. Default Re: Oil prices

    Quote Originally Posted by venture View Post
    I completely get where you are coming from and don't really disagree with the general principle behind it. How much time does it take for us to catch up? How can we possibly diversify when you have a tax structure that is so slanted towards O&G with incentives that other industries aren't likely to get the same treatment? We all want diversification, but then we throw billions at O&G in tax breaks that we remain dependent on them.
    I must respectfully object to this argument. You have to take into consideration the tax incentives are in place as a result of a commodity that is plentiful in this state, just as subsidies are in place for farming, as well as the generous aerospace engineer tax credits that have subsequently led to an influx of aerospace employment in OKC. The "tax structure" has little to do with market diversification (as can be seen in Texas where O&G receives a similar subsidy as OK, yet economic expansion is quite diverse). The main route to economic diversification is strengthening the education base and quality of life, both of which have been positively impacted by the state's oil and gas production over the past decade. The business climate as a whole in Oklahoma is more friendly than the majority of states in the U.S.

    There will be a time when oil crashes...is this it? I'm not sure. If anything this should be a warning shot to wake us up to make sure we are doing more. I am excited for the opportunities that OKC has had from this boom, but I hate seeing a large portion of the country brought down because of it. There has to be a happy balance and perhaps with this adjustment in prices we are finally going to get there.
    If, by "large portion of the country," you are referring to the airline industry, then yes. However, as can be seen in the data in my earlier post, economic consumption/output has overall taken the increase in input costs in stride (mainly via improvements in productivity/efficiency). What goes for the airline industry does not go for all.

  22. Default Re: Oil prices

    I wasn't referring to the airline industry, sorry. We aren't going to see eye to eye here, so I'll just respectfully disagree with what you are saying and move on.

  23. #73

    Default Re: Oil prices

    I've got a bit of skin in this game, but I'll say this. The US economic system is designed to be self correcting.

    I think its funny that as soon as crude goes down, people imagine a dark shadowy OKC with nothing but tumbleweeds on Sheridan and an empty I-40. This is a scenario that will simply never happen. Everybody is VERY quick to panic when crude falls, but good god, wait a few months to see what happens before we declare OKC a thing of the past.

    If all of the big 3 OG's close doors tomorrow (DVN, CLR, CHK), OKC will continue to function much like it did before. That only accounts for what.... about 7,000 workers who earn about 10-20% above the average salary? It isn't going to stop the city from functioning. Yes, it would be a hit, but you know what? OKC has recovered from worse. Way worse. We'll do it again if we need to.

    The largest employers in OKC aren't even in Oil. Tinker, OU, the Mike Monroney/FAA, Boeing, and the 1000's of hospital workers, education workers, state employees, etc aren't affected by falling crude. Plus, think of all the benefits that low oil will have to other OKC area employers like the automobile industry.

    OKC will always be here, and OKC will always have jobs.

    Somewhere, there is an investor presentation from one of our big 3 that shows how every single supermajor (Exxon, Chevron, etc) has had slowly falling production for last 8-12 years. This is not good. World demand for oil isn't going to dry up all of a sudden and our big 3 have some very promising projects in the future. The nature of the "supply chain" in O/G takes a while to adjust to market prices. You can't just call the rigs and all the trucks en route and tell them to go home. It takes a few months to adjust production, at least. both DVN and CHK are in extremely good financial shape right now.

    The people have OKC have already raised money to build the MAPS III projects. They will be built. The nation will see our investments in quality of life projects and want to emulate our success. If O/G dries up tomorrow, you've got tons of super cheap office space that could attract other large employers. Once again, the economic system is self correcting. Everybody needs to quit freaking out. Enjoy the extra bucks you've got right now, because gasoline won't be this cheap forever.

  24. Default Re: Oil prices

    I don't recall anyone predicting the death of OKC. But OKC will definitely see a decline in capital spending. A number of popular projects may be pulled back if the crude price trajectory continues. The billions of dollars invested in OKC over the past 10 years have largely been the result of oil company prosperity. Yes, it was kicked off by a well-timed MAPS. But most of these projects would have never happened without energy dollars.

    OKC suffered for many decades, perhaps most of my lifetime, with a depressed economy. We've now had a few great years. I have really loved seeing the local economy growing, and it has been especially important that this growth includes aerospace, retail, tech, medical, and other industries outside of energy. OKC needs a good 35 more years of sustained and diversified growth. Certainly, however, a slow down will follow when a substantial engine is carved out of the economic model.

    Lastly, OKC's energy-related growth is not correlated to an economic slow down in other geographic areas. There may be anecdotal evidence of such, but it is merely anecdotal and not substantive. Other industries and other geographic areas have performed well even while energy prices spiked and OKC prospered. Conversely, there have been severe economic strains in other areas even while energy prices were at historic lows and OKC suffered. Our local economy as well as that of the entire nation and world works more like a current and less like a tide.

  25. #75

    Default Re: Oil prices

    The problem with the idea that oil can stay way low and OKC will continue on its current trajectory (not be okay, but continue the rapid growth it is seeing) is that it's not about just the big guys, it's about everyone involved in the E&P eco-system. OKC is not going to become a ghost town even from a major oil-depression, but there are hundreds of millions of dollars of development sprouting up in downtown alone, and if OKC can maintain its trajectory, that will turn into billions over the coming 10 years, and is already in the billions if we're talking about all of OKC. Much of that is occurring because of the immense amount of money that the city is gaining from these large E&P businesses.

    There are three ways for an economy to grow: refining of raw resources/increased efficiency in their use (Innovation), selling of resources for profit (Exportation), and influx of external resources (Importation). OKC is currently growing from all three of those elements. But E&P is the major private player in the exportation category, and arguably the only private player. We have a few regional financial institutions, but the growth of those companies is very related to the growth of the E&P companies those financial institutions have invested in.

    If OKC takes a big hit to our exports, then we have less capital to work with to grow. The slower we grow, the less attractive we become making importation more difficult. As a bonafide city, we will always have innovation available as a means to growth. In fact, we are very strong in that regard. Our exports are pretty good, but we could stand to have more in different fields aside from just E&P. Our imports have never been strong and are just now starting with projects like LIFT/21 c./Clayco, and with companies like Enable being headquartered here. That's the kind of growth we need more of, but importing as a means of growth is the most difficult to achieve because those who are willingly bringing their resources to the economy need to see both innovation and the opportunity to export in order to take the risk here.

    It is in that regard that E&P is so important, particularly for the private sector of OKC's economy, and why a decrease in prices is worrisome for us. There's no reason to be doom and gloom about all this, but neither should we be unalarmed and ignorant of what's at stake should this be a prolonged issue.

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Oil prices low but why are gas prices still so high?
    By Jesseda in forum Current Events & Open Topic
    Replies: 28
    Last Post: 09-26-2011, 07:46 PM
  2. oil prices rising due to less resession fears
    By Jesseda in forum Current Events & Open Topic
    Replies: 4
    Last Post: 08-23-2009, 10:36 PM
  3. I'm glad our oil prices are up for this
    By kmf563 in forum General Civic Issues
    Replies: 11
    Last Post: 07-12-2008, 09:08 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Single Sign On provided by vBSSO