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Thread: Oil prices

  1. #1651

    Default Re: Oil prices

    The definition of spare capacity in OPEC is storage. US domestic does not have storage or ability to get stored oil to the global market. Even the SPR can't deliver because of a lack of export facility.

    US domestic relies on drilling or completing DUCs to increase production.

    And again, they cant control production as the Texas Railroad Commission last did in the 1960's and Texas was the world's swing producer.

    Right now, the Saudis are using storage to meet this crisis. OPEC has rules for each producer as to how much oil they must keep in storage.

    There is nothing like that in US domestic. US produces oil until price falls low enough to stack rigs. Trying to get all these companies to cut production would be like herding cats. I read Harold Hamm trying to preach financial discipline last week.

    i think Cramer is a TV talking personality.

  2. #1652

    Default Re: Oil prices

    BTW, even if domestic producers could work out an agreement to cut production in order to support a price level, it would be collusion and we have anti trust laws to protect against that.

    Its impossible for US to be global swing producer as Cramer said we were.

  3. #1653

    Default Re: Oil prices

    You've pretty much proven my point. The US production is dependent on how much can get produced at any particular price. Until recently, If it can be drilled, transported and consumed at a profit, US producers will do it. Now, the US has export facilities with new capacity coming online. Daily oil exports could nearly triple from 2017 to over 3 million barrels per day according to the American Petroleum Institute.

    CNBC reports CITIGROUP says US capacity - specifically making note of Permian basin and Gulf of Mexico export facilities coming online could boost exports to 5 million bpd late next year. Corpus Christi TX will become a major hub for both oil and gas.

    Reuters reported after the Saudi attack that if they had to greatly reduce or stop production at that facility, only the US, Iran and Venezuela have significant excess production capacity. Of course the US won't let eother of those countries export anything more right now.

    CNN reported the US briefly was the worlds leading exporter, more than SA or Russia, in June of this year. SA retook the lead in July but it shows we are now one of the biggest exporters and poised to become the biggest.

    So, put these together and despite what you seem to think about Mr. Cramer on this matter, he's clearly pretty much spot on and the US is comfortably positioned as the world's swing producer. Of course, one Cat 5 or a shock drone attack on Houston, Pt. Arthur Tx and this could all change.

    And we haven't even discussed LNG exports. Australia recently surpassed Qatar as the largest exporter with nearby superimporters India, China and Japan. However, without a major economic disruption, the US is expected to surpass Australia by 2024 with huge excess supplies.

  4. #1654

    Default Re: Oil prices

    And your definition of a swing producer , is what ?

    A swing producer is the producer who can keep the market balanced at a certain price point. Its not just being the worlds largest producer.

    The US can't do that, never will be able to do that, for many reasons.

    Texas was only able to do that in the 50's and 60's until ME production grew and OPEC was formed and global demand outgrew Texas. Texas did that by putting " allowables " on all Texas wells. Each well had a set amount of oil it could produce, based upon the wells potential. It was done to support a price level that would keep in the industry in business.

    There is no mechanism in place to control production levels in the USA.

    And while there's storage in Cushing and the Gulf Coast, all the oil there has multiple ownership and on a global level, its in relatively small quantities. Its not controlled by the government, as it is in where production is nationalized and state run.

    If Iran attacks Saudi again, US domestic is not going to make up the loss. Whoever reported that US had spare capacity, doesn't know what they're talking about. Must've come from some talking head on CNBC that only knows what they're told.

  5. #1655

    Default Re: Oil prices

    This is sort've ominous for Oklahoma's economy and for future tax revenues

    https://twitter.com/ericnuttall/stat...873111554?s=20

    Eric Nuttall
    @ericnuttall
    The beginning of the next oil bull market...Bernstein, Howard Weil, and now Goldman Sachs calling for aggregate multi-year non-OPEC supply declines beginning in 2021. Will investors be able to handle the apathy and volatility and stick with the trade until then??? #OOTT

  6. #1656

    Default Re: Oil prices

    Eia projects continued downtrend in the Anadarko

    https://www.eia.gov/petroleum/drilling/pdf/anadarko.pdf

    Also the rig count is nearly at levels we saw during $26/bbl.

    Full on bust, good news is production is still high and prices are ok enough there is room to maneuver.

    Bad news is it doesn’t seem like anyone is paying attention, or at least publicly saying they see what’s coming.

    That light at the end of the tunnel is a train.

  7. #1657

    Default Re: Oil prices

    State revenue fell 6% short in September.

    https://www.tulsaworld.com/news/down...2d31bd278.html

  8. #1658

    Default Re: Oil prices

    Might as well shut the state down, I guess. Who knew tying your future revenues to a commodity would not work out.

  9. #1659

    Default Re: Oil prices

    Definitely seems like the oil market is starting to move firmly against OKC proper. And this time around there isn’t a bunch of fun PE money from Houston or Dallas willing to bail us out.

    Will be interesting to see if the “diversification” protects the commercial real estate sector. I certainly hope so.

  10. #1660

    Default Re: Oil prices

    All of the O&G activity seems to have shifted firmly to the Permian where it’s the most profitable. I’m still a believer that we’ll see a large price increase sometime within the next year as we have before the past six recessions.

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