OIL PRICES: could stay down thru 2016-19

[drbubb]

No Major Crude Recovery for 1-2 Years? Eric Hadik - March 16, 2016

 

"A Major multi-year low" with another low at a higher level later this year

 

"Some time is needed to trace out a bottom"

[Jake]

When we talk of " recover" what do you mean exactly? Back to 100+/b?

[drbubb]

My guess would be a $50-80 range after the Low has been made

[Jake]

Doesn't production these days entail an average necessary price north of 100$ to be profitable for the companies bringing it out of the ground? Even at 80$/b producers will go to the wall, especially the frackers. Peak cheap oil is over. And we can't really afford the more expensive stuff. Maybe the Rothchild/Rockerfellers knew this when they bailed out of oil.

[drbubb]

Doesn't production these days entail an average necessary price north of 100$ to be profitable for the companies bringing it out of the ground? Even at 80$/b producers will go to the wall, especially the frackers. Peak cheap oil is over. And we can't really afford the more expensive stuff. Maybe the Rothchild/Rockerfellers knew this when they bailed out of oil.

 

Probably.

And they may also be aware of working Free Energy technologies

[Jake]

Maybe. And till then renewables which will be a transitional phase until...what?

[Van]

eh?

Different oil producers have different cost to bring their oil to the market. We know the Saudis are probably the cheapest, where it can be extracted as cheaply as $10/pb (I personally doubt it is anywhere near this low), while most US producers are losing money at current sub-$40 level. Brent North Sea is quite expensive, somewhere around mid-$40s.

 

But I don't think anyone has a cost anywhere near as high as 100pb. Sorry, no.

 

But be careful because to extract oil requires oil, so if the price falls, input costs fall anyway.

 

 

 

The death of oil has been greatly exaggerated. I'm sure that we'll be revisiting this thread in 2 years' time and wonder how we failed to buy MORE oil when it was such a bargain.

[Jake]

https://ourfiniteworld.com/2016/01/19/why-oil-under-30-per-barrel-is-a-major-problem/

 

Van, what do you think of this?

[Jake]

Or this?

http://www.investopedia.com/articles/active-trading/020215/falling-oil-prices-could-bankrupt-these-countries.asp

[Jake]

I think oil producers need prices far higher than the simple cost of extraction. They have to pay taxes, salaries, investment for new sites and maintenance of existing infrastructure. The easy oil is on the decline and we have seen (Alaska, North Sea) reverse direction.if it isn't profitable oil will lack investment.

[mrogers]

Thanks for those links Jake. It's good to know where Gail had got to after the oil drum closed.

 

I was surprised by Van's chart. Van do you have a source? I was thinking that maybe it represents purely continued extraction costs of existing infrastructure, rather than life of field. Surely the reduced input costs (energy) can't by themselves account for such a large discrepancy.

[Van]

The fundamental analysts calling for $10 oil have again be proven spectacularly wrong, as oil is now 4 times that.

 

I am not particularly an expert on the oil industry so I can't vouch for the some of the numbers being thrown around, but the are generally accepted as being in the correct ballpark. Truth is probably that nobody really knows, and there are lots of ways of doing the sums that will give you different but equally "correct" figures. I work in the portfolio analytic industry and I can tell you that you can report a portfolio as having returned 6% or 10% depending on methodology you use and both are accepted as "correct".

 

The cure for low prices is always... low prices. Companies become unprofitable, projects are abandoned which affects future supply and hence creates the next bull market. Basic economics 101.

[Jake]

Van- I like you A LOT. But I would implore you to read around Gails site some. The cure for low price HAS BEEN low prices. Basic economics 101. But the future may not look like the past for reasons she well expounds.

I haven't heard any $10 oil analysts. But I am neither an expert. You may be right re the next bull market. You have been right so many other occaisions. I read your posts with great interest and hope. Dr Bubbs, too. But I do think you both need a wider reading. Not just the short term. Tverberg is a good place to start, IMHO. There are some very thought provoking posts there. Plus she doesn't have an agenda to push or pay for. I would relish a rebuttal but so far there is little of substance. Only rear view mirror stuff.

[drbubb]

As Free Energy technologies creep ever closer to a public Disclosure...

 

In a Changing Climate, Rockefeller Fund Dumps Oil, Exxon ...

www.usnews.com/.../in-a-changing-climate-rockefeller-fund-dumps-oil-...

Mar 24, 2016 - Rockefeller Dumps Oil, Exxon Mobil ... of the Keystone XL pipeline's northern stretch last year, companies have pulled out from the sector.

 

Will the Gold-to-Oil ratio go further towards the Moon?

When the Rockefellers made their announcement, you should have bought Gold and sold Oil

 

 

Want to know why the Russians have not Done Disclosure?

Because it endangers their oil revenues

[notanewmember]

Interesting chart - now where have they really put their money? There's a lithium ETF "LIT", but I generally don't like ETFs.

[drbubb]

James Corbett | Rockefeller History & The Big Conspiracy Breakdown

 

Published on Apr 17, 2016

The story of the Rockefeller family is more than a cautionary tale, it’s an example of an oligarch’s potential to dominate. On this episode of The Higherside Chats, James Corbett joins us to discuss the far reaching control of the Rockefeller dynasty. We start with the calculated steps to bring a nation to dependence on oil. Though left out of public education lessons, the results of these events reach far into today’s society. Once successful with this first conquest, what would Rockefeller seek to influence next? Listen in as we explore conspiracies in areas such as education, medicine, food, and more.

James Corbett is the creator of The Corbett Report, a site on a mission to provide open source intelligence. Since 2007 James has shared information about topics such as geopolitics, central banking fraud, Big Brother police state, and more. He uses a variety of platforms to share including podcast, newsletter, documentaries, YouTube videos, and a membership community.

James’ teachings are more than an expose of a historical figure; they are a warning for us all to gain a better understanding of control. Through extensive research and a true passion for knowledge he is able to convey the importance of a well informed public.

 

The Rockefellers have much to answer for

 

(an older show, 2013):

 

John Scura | Rockefellers, Rothschilds, & The Big Conspiracy

[drbubb]

Comments from Tony C's Blog

simpleiam says:
May 16, 2016 at 4:04 pm
manu, any pumping that’s off-line is only temporary; it will start-up again as soon as possible. It would take a sustained price of WTI $70-75 for Energy to recover, and nobody, except T. Bone believes it’s going to happen for at least a few years. It might hit the upside briefly, but it won’t stay there. That’s the opinion of the big boys I work with. I am not an Oil trader, so…

torehund says:
May 16, 2016 at 6:26 pm
Thanks Simple for getting all of us as close as we ever get to the real insiders.
Many exporting countries would normally do fine with 60-70 usd a barrel if their respective currencies adjusts accordingly. The losers will be the oil companies themselves and of course the rig sector, supplies etc.
I just can see many of them not going belly up in a major way.
Indirectly the exporting countries suffer trough increasing welfare expenditures and lack of revenues from the companies that go bust and even from the marginal survivors.
Maybe only big oil corps will survive, as they have probably hedged themselves sufficiently ?

Torehund says:
May 16, 2016 at 8:46 pm
In that respect avoid Norwegian State oil.
Dividend is upheld by artificially funneling Gov money to a bank in Central europe, then looping it back to stockowners (majority owned by Gov). They don’t get it all back, but a big chunk of it nevertheless.
This maneuver prevents the stock from plummeting, and the symbol of greatness persist for now:)

simpleiam says:
May 16, 2016 at 7:38 pm
You’re welcome tore. Yes, the Big Guys are cutting expenses, namely employees & contractors to the bone. Gathering survival & buy-out cash, and issuing bonds; at least one issuance for OPEX and to pay dividend. 3rd bond issuance in 6 years. 1st was in 2012, then, in 2014, now again this year. In my mind, when they have to issue bonds to pay div, it’s not a good sign at all. That same corp went from AAA to AA+.

[drbubb]

U.S. has more untapped oil than Saudi Arabia or Russia

Jul 05 12:04pm:

Move over, Saudi Arabia and Russia. America now has more untapped oil than any other country on the planet.

More

 

== ==

 

Oil and Oil shares down yesterday :

 

USO / Oil etf vs. XLE / Oil shares ... update

 

 

[drbubb]

U.S. oil boom isn't dead. It's plotting a 2017 comeback

Jul 06 1:09pm:

New cracks have emerged in the U.S. oil boom, thanks to the crash in prices orchestrated by OPEC.

More

[Van]

Hmmm.. crude doesn't look too clever here, does it?

I wonder how long it'll be before the oilies start yelling uncle again? I reckon we'll hear unhappy rumblings sub $40 and will be back in full-blown panic if we fall sub $35.

[drbubb]

Big opening gap down... followed by a full recovery

[drbubb]

(From an email from Doug Casey's team):

 

"If these countries stop producing oil, their economies could fall apart."

 

You may remember that oil crashed in the summer of 2014. It’s since plunged 75%. In January, it hit its lowest level since 2003.

Oil tanked because there was simply too much of it.

High prices and innovative techniques like “fracking” triggered a huge boom in global oil production. Over the last decade, U.S. output nearly doubled to the highest level since the 1970s. Production in other major oil-producing countries hit record highs.

The global economy ended up with more oil than it needed. For the past two years, the global economy has been working through a giant oil surplus.

Progress has been slow.

According to International Energy Agency (IEA), the global economy is still oversupplied by more than 300,000 barrels per day (bpd).

Yet, oil’s rallying. Today, we’ll show you what’s pushing oil higher. As you’ll see, it won’t cure the industry’s biggest problems…

• Hopes of a production “freeze” caused oil prices to surge…

Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC), a cartel of 14 oil-producing countries, said it plans to hold informal talks in Algeria next month.

The purpose of this meeting is to bring stability back to the oil market. Some analysts think OPEC could even freeze production at this meeting, meaning it would cap production at current levels.

We aren’t holding our breath…

• OPEC has already tried to cap output a couple times over the past year…

The most recent talk took place in Qatar in April. OPEC even invited non-members like Russia. It was the first time in 15 years OPEC met non-members to discuss fixing output.

. . .

Oil is the economic backbone of every OPEC nation. It makes up 80% of Saudi Arabia’s exports…66% of Kuwait’s exports…and 46% of the United Arab Emirates' exports.

If these countries stop producing oil, their economies could fall apart.

Last month, Saudi Arabia pumped a record 10.67 million bpd, which broke the monthly record set last June. The United Arab Emirates and Kuwait are also producing record amounts of oil.

If OPEC was serious about “stabilizing” the market, it wouldn’t keep flooding the world with oil.

 

 

[drbubb]

OILB ... All-data -

[drbubb]

DRUDGE Report

 

Inflation 'ticking time bomb'... (in the UK)

Oil price down cycle 'nearing end': Saudi minister...

=== ===

 

The last time sterling fell off a cliff we were in the midst of global financial crisis from 2007 to 2008. The currency shock sent inflation shooting up to 5.2pc, abruptly squeezing on real living standards.

On that occasion the poor were at least protected. Benefits and in-work tax credits were indexed to inflation. Social cohesion was preserved.

This time the most vulnerable families will take the brunt as the cost of imported food, clothes, and fuel suddenly jump. A parting gift of the last Government was to freeze benefits for 11.5 million households until 2020.

This is a political time bomb that will detonate next year when the inflation ‘pass-through’ from imports bites in earnest. It threatens to poison the already fractious national debate unless steps are taken to mitigate the damage.

. . .

How much inflation will rise – and how soon – is a hotly-debated topic. The trade-weighted devaluation in 2007-08 was 30pc from peak to trough, an earthquake for a world reserve currency.

The headline impact in that episode was aggravated by a surge in the dollar price of oil over two years following the Great Recession, from $32 to $115 a barrel. This will not be repeated.

Global crude stocks remain near record highs, and the flexibility of US shale drilling has broken the back of the OPEC cartel. The structure of the oil market has changed completely. China’s industrial revolution has in any case come off the boil, and it is China that sets the marginal price of oil in the global economy.

. . .

"The current down cycle is nearing an end," Falih told a joint press conference with his Russian counterpart Alexander Novak on Sunday after a Gulf ministerial meeting in Riyadh.

"Market fundamentals, in terms of supply and demand, have begun to improve," Falih said, adding: "We are optimistic that oil prices will continue to improve in the future."

Qatar's energy minister, Mohammed al-Sada, whose country holds the rotating presidency of the OPEC oil exporting cartel, also said the "difficult phase is over".

"Although the market is heading to being balanced, it needs our joint effort, and we all agreed that we need to take measures to bring back this balance," he said.

Novak said he and his Gulf counterparts had discussed ways to "develop the best mechanism to solve the issue of stabilisation".

"We have reached an unprecedented level in our relations and cooperation" with Saudi Arabia, he told reporters, adding that he agreed with Falih "to continue to work and remain in continuous contact to achieve... concrete mechanisms".

OPEC has invited Russia and key non-members to a meeting later this month as the cartel and Moscow seek to tighten cooperation to boost historically low crude prices

[drbubb]

fionamargaret says:

November 22, 2016 at 2:06 am

Blue, take profits when you have them in oil…every profit is a blessing.
Oil is a “deal or no deal” situation, and even experienced oil traders can get caught..
Be careful…

 

fionamargaret says:

November 21, 2016 at 5:56 pm

Thanks Chris Kimble
https://raymondjames.bluematrix.com/sellside/EmailDocViewer?encrypt=5b0584ee-ac0c-4971-bcb1-4632c68a7817&mime=pdf&co=RaymondJames&id=Jeffrey.Saut@RaymondJames.com&source=mail
Thanks Raymond James

 

locanbbs says:

November 21, 2016 at 6:20 pm

UPDATE (Gold – for Fiona): Gold is making progress, but “wave” 4 has overlapped 1-2, so it’s probably just an A-B-C in a new sideways trading channel.

fionamargaret says:

November 21, 2016 at 6:39 pm

GLD pattern is still not broken with all that down action but it has to go up from here……