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Old 01-14-2015, 02:38 AM   #41
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I would say the price has bottomed out. http://www.marinelink.com/news/trade...els383803.aspx
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Old 01-14-2015, 03:29 AM   #42
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I just saw the movie Syriana again a few minutes ago. Nice reminder to how it all works. Spanking Putin this time.
I'm not sure Putin is being spanked just yet, but if oil prices stay where they are for a while then he certainly will get spanked. Just where the rest of the world ends up is not all that certain as a collapse of Russia will have far reaching ramifications.

Putin's Kleptocracy might well be a good read if you are into that stuff.
Putin's Kleptocracy: Who Owns Russia?: Karen Dawisha: 9781476795195: Amazon.com: Books

But I found reviews of the book, such as the one in Wall Street Journal to cover enough for me.
Book Review: 'Putin's Kleptocracy' by Karen Dawisha - WSJ

Great to see the USA fuel priced drop so much, but our price falls are much more modest. Wholesale diesel down from $1.50/l a year ago to $1.10/l now. Retail prices, national average, for us mere mortals is now $1.38/l. Partly due to our currency tanking, but I suspect more than a little greed from the oil sector as well.
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Old 01-14-2015, 06:12 AM   #43
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It's actually Saudi Arabia that opening up the spigots and flooding the market with oil. Their lifting cost is the lowest in the world at $18-23/barrel, compared to around $50 for fracted US/Canadian oil. They get a 3fer out of this - kills the economy of two of their foes - Iran and Russia, and throttles a new competitor, the US.

In addition there was an article in yesterday's Wall Street Journal about the Candadian Tar Sands and that the producers have both a long term view and high start up costs that once sunk, they may as well pump as much as possbile however low the price.

All in all, it's great for us and looks to remain so for a while.

Diesel for my boat in Ireland is down to $2.97 a gallon

FYI the Italians are still paying double that even for home heating fuel.
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Old 01-14-2015, 06:13 AM   #44
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Not just Oil, all commodities are suffering from the world wide lack of growth.

Almost all are suffering because the economic model the govs of the world use is simply wrong.

Growth Growth Growth by creating modest Inflation , to reduce the value of massive gov debt is no longer working.

It worked when one or 2 countries a time destroyed their currency , but now all are fans of QE , destruction of debt with newly created debt, so currency wars will follow.

Cementing in place debt does not add to the money supply , so there is no demand created .

A buck a Euro? perhaps if Greece fails again. Bigger hassle if France joins the PIGS.
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Old 01-14-2015, 06:53 AM   #45
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Originally Posted by FoxtrotCharlie View Post
It's actually Saudi Arabia that opening up the spigots and flooding the market with oil. Their lifting cost is the lowest in the world at $18-23/barrel, compared to around $50 for fracted US/Canadian oil. They get a 3fer out of this - kills the economy of two of their foes - Iran and Russia, and throttles a new competitor, the US.
Exactly right. When fracted oil can no longer compete with Saudi oil the price will rise.

What's so disturbing about mid east oil countries is that with a few exceptions for nearly 200 years the oil rich nations with no other natural resource have not improved or diversified their economies. When renewable energy sources overtake dino oil as the worlds primary energy source, as it ultimately will, these countries will be left with nothing. If the mid east is in turbulence now, just wait.
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Old 01-14-2015, 09:47 AM   #46
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"When fracted oil can no longer compete with Saudi oil the price will rise."

True enough but the numbers I have seen is 1% of US lift will stop under $50a bbl, another 1 % under $40 a bbl.

The Saudis lift far cheaper than the US.

Until world wide demand resumes the price will stay low.

Excluding a shock like someone Nuking the Saudis or ,,,,
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Old 01-14-2015, 10:01 AM   #47
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How about, Putin is in a bind, he hooks up with the Iranians and they finance/promote one of the anti Saud family Saudi rebel groups to overthrow the royal family and shut down the supply from Sauid Arabia? surely he thinks of that.
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Old 01-14-2015, 10:28 AM   #48
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When renewable energy sources overtake dino oil as the worlds primary energy source, as it ultimately will, these countries will be left with nothing. If the mid east is in turbulence now, just wait.
At least one person is thinking ahead;

"The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil." Ahmed Zaki Yamani, 2000
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Old 01-15-2015, 06:49 AM   #49
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When renewable energy sources overtake dino oil as the worlds primary energy source, as it ultimately will, these countries will be left with nothing. If the mid east is in turbulence now, just wait.

Its not the insanely expensive "renewables" that is the problem its energy storage.

Batteries suck and pumping water bup to a resivoir so it can be drained is inefficient!

************

Today the Swiss removed their support for the failing Euro and the price went from 1.20 SW FR for a Euro to .85 SW FR on the open.

That is a 30% collapse , although nitb is slowly coming back.

Investors are paying a negative interest rate for rationality/responsability ,,

you put 100SFR in your bank and get 99.25 SFR after a year.

But you get it back, instead if a HAIRCUT.
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Old 01-15-2015, 07:41 AM   #50
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It would be interesting to know what the real growth or shrinkage of USA dino fuel is. Clearly the economy isn't booming. The fleet of vehicles both commercial and private vehicles continue to improve in overall fuel consumption as the older less efficient age out. Also very quietly, home heating oil and propane for home heating are being slowly replaced by geothermal (which has been doing a huge business while building was flat the last 6 years), natural gas, and wood pellets (demand now exceeds supply in many areas). I'm curious as to whether the demand for dino oil products has shrunk since the bottom of the recession, or there is just reduced growth.

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Old 01-15-2015, 06:25 PM   #51
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Remember EVERYTHING is touch be diesel. Lower fuel and gas prices will give a family more disposable income, thus helping the economy to improve like buying a boat, fuel and other stuff....
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Old 01-15-2015, 09:07 PM   #52
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Not sure that the "drive the frackers out of business" is a valid scenario for what's going on. I think the political aspects of overproduction/price reduction/economic impact are valid scenarios, however.

The technology and infrastructure to produce petroleum products using fracking have been developed. So if the price should drop low enough to make it not worth the effort, the technology and infrastructure do not go away. Production simply slows or stops until such time as the price goes back up, and then fracking will pick up where it left off.

I think the scenarios that have the Saudis and others maintaining production to reduce prices and influence the economies and thus the policies and politics of nations that are far more vulnerable to immediate economic downturns are much more plausible.
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Old 01-15-2015, 09:52 PM   #53
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It`s not just the oil price tanking. Other commodities, iron ore, coal,and now copper, are down, likely largely related to a slowdown in China to 7% growth, which would be the envy of many other countries, assuming it is credible. It seems if growth stops, countries fall over, we are so addicted to it.
All we mere mortals can do is enjoy the lower oil price for our cars, boats and pockets, and hope all pans out. Coupled with an unemployment reduction, it may prevent an interest rate cut here. Russia was recently described as "a militarized gas station", quite unpredictable under current management. Interesting times.
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Old 01-15-2015, 10:54 PM   #54
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At least one person is thinking ahead;

"The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil." Ahmed Zaki Yamani, 2000
Uh, are you going to convert your diesel to deep fry fat?
Actually I wouldn't mind, but it is too much of a challenge. Honest, I don't think the local McDonalds goes thru as much deep fry fat as my fuel tanks can hold!
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Old 01-15-2015, 11:13 PM   #55
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Not sure that the "drive the frackers out of business" is a valid scenario for what's going on. I think the political aspects of overproduction/price reduction/economic impact are valid scenarios, however.

The technology and infrastructure to produce petroleum products using fracking have been developed. So if the price should drop low enough to make it not worth the effort, the technology and infrastructure do not go away. Production simply slows or stops until such time as the price goes back up, and then fracking will pick up where it left off.

I think the scenarios that have the Saudis and others maintaining production to reduce prices and influence the economies and thus the policies and politics of nations that are far more vulnerable to immediate economic downturns are much more plausible.

Ditto here, I have been thinking the same thing. OPEC, SA mostly has worked theirselves into a corner I believe. By manipulating oil prices and keeping them too high for too long- as Marin stated the technology and infrastructure (and equipment) is now in place for cracking. A bad call on OPEC's side if you ask me. From here out giving us the "squeeze" won't work😎👍


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Old 01-15-2015, 11:25 PM   #56
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It's more like 2009 than 1973 ... there is an over supply and not enough demand, and the crude oil prices are (were?) falling unlike anything in 1973. Whoever invested in tanker companies made good profit in the last couple of weeks ... although not as good (yet?) as in 2009. The good news out of this is ... Putin (and few other unpleasant characters) is running out of steam.
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Old 01-15-2015, 11:44 PM   #57
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Uh, are you going to convert your diesel to deep fry fat?
Actually I wouldn't mind, but it is too much of a challenge. Honest, I don't think the local McDonalds goes thru as much deep fry fat as my fuel tanks can hold!
Hey, Mr Cod

Some technology will come along to replace our dependance on oil, just like metal replaced stone tools. There's a slam dunk, 100% probability in that. Will we be alive to see it? Probably not, but someone somewhere sometime will unlock an unknown door, and everything will change. Our species has a habit of doing that.
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Old 01-16-2015, 03:19 AM   #58
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Hey, Mr Cod

Some technology will come along to replace our dependance on oil, just like metal replaced stone tools. There's a slam dunk, 100% probability in that. Will we be alive to see it? Probably not, ...
Meanwhile, we can enjoy the sound and exhaust of our diesel engines.

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Old 01-16-2015, 05:13 AM   #59
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Not sure that the "drive the frackers out of business" is a valid scenario for what's going on. I think the political aspects of overproduction/price reduction/economic impact are valid scenarios, however.

But why suddenly now? And who are the Saudis trying to influence and why?

The technology and infrastructure to produce petroleum products using fracking have been developed. So if the price should drop low enough to make it not worth the effort, the technology and infrastructure do not go away. Production simply slows or stops until such time as the price goes back up, and then fracking will pick up where it left off.

Exactly! It's a loosing proposition over the long term, but not the short.

I think the scenarios that have the Saudis and others maintaining production to reduce prices and influence the economies and thus the policies and politics of nations that are far more vulnerable to immediate economic downturns are much more plausible.
Again, why now? I guess a case may be made that the Saudis in cooperation with the US are trying to undermine the Russian economy and thus devalue Putin's influence both at home and abroad, but I don't think so.

I think a more likely scenario is the Saudis want to nip this fracking thing in the bud before it get's to well established. Once the infrastructure is established to bring fracked oil to market in quantity the Saudis will see a real competitor.
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Old 01-16-2015, 06:52 AM   #60
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I think a more likely scenario is the Saudis want to nip this fracking thing in the bud before it get's to well established. Once the infrastructure is established to bring fracked oil to market in quantity the Saudis will see a real competitor.


Fracking is a quick and short term method of extraction oil.

It takes years to drill conventional wells and connect them to the refinery supply.

They last for decades producing oil.

The frackers are fast drilling and short lived as oil sources.

IF the frackers can see a profit in the next year or so, they will continue to drill.

With a change in administrations , If the next bunch are not anti oil, the price will drop again as sealed gov lands are opened.

When GB promised to simply open oil exploration the price dropped about $100 .

At $ 40. a bbl only the efficient folks with great supplies will survive.
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