And there was much rejoicing in the land.... Gas Prices

[Strychnine]

One opinion...

Crude Oil Price Has Reached The Bottom



Flat is the new up in the oil markets. By that I mean that if oil can simply flatten out here, everyone will breathe a big sigh of relief.

While $40-$50 oil is not great for E&P economics, less volatility would enable the industry to lay plans that don't have to be adjusted every month or quarter.

It is hard to call the bottom with precision, and 4 days does not make a trend, but I am seeing some signs this week that are very encouraging. If we aren't exactly at the bottom, we are at least at a near-term plateau - oil is trying to hold its ground and flatten out here.

The chart above shows this week's trading sessions for WTI. You can see that we had significant rallies each day in the price of oil. This is a very good sign when you consider the nosedive of the prior sessions leading up to this week (see next slide).

[Denny]

Man, if I had a dollar for every time I heard Schlumberger today...

[Trip McNeely]

Man, if I had a dollar for every time I heard Schlumberger today...

I always like to hear non-industry people pronounce it.

[akfodysvn]

My bad... I started the SLB yalks

[Ruffdaddy]

One opinion...

I think the floor has taken so long because it took way too damn long to lay down rigs. I understand there was too much debt for a lot of drillers to stop, but with a well know oversupply and 6 months of crashing prices...it was obvious the only way to get a price recovery going was to lay them down so supplies can level. A few more weeks of falling rig counts is a necessary evil. If opec really wanted to be evil...they would grab more market share at 50 to cover their loses and choke back shale drillers even more. I'm not sure how easy it actually is for them to grab that share however...from what ive heard, those wells in saudi are not maintenence free, and ain't getting any younger. They run slickline jobs out there like crazy.

Working with MWD/LCD tools...that's the last thing I want to admit. But I just want a half decent recovery as soon as possible.

[93LXHORSE]

I just finished up with 2 weeks of Falck safety training in Brookshire and you should see all these young cats that have been working offshore and on land rigs. They all have Rolex watches and pimped out rides of all kinds. One guy had an Audi R8. Hopefully they've saved a few bucks back just in case! The offshore guys seem to feel somewhat secure though.

[Ruffdaddy]

Offshore rigs cost a lot more to just start and stop then land rigs. Is it deepwater?

Also...what do those offshore hands do? Are they in drilling or intervention/production?

[93LXHORSE]

A little of everything. From deck hands to project managers to Rov operators, cooks, etc. I was in a different class every day so didnt get familiar with folks all that much.

[Strychnine]

Heading to American Sniper with a friend who works at Baker.

BHI is in the process of cutting 3000 globally.

[Snatch Napkin]

Here's the thing though. Oil is super high and they get fat. Meanwhile, other industries that depend on more disposable income decline. People eat out less, so restaurant businesses go down. People like Brent who sell restaurant equipment see a slow down. Furniture, housing starts, etc. go down. Transportation costs go up, so goods cost more at the store. It goes on and on.

The problem is when O&G is either at the bottom of the trough or at the peak. That's when one side or the other suffers. We need it to stabilize somewhere with a happy median where O&G can make a good profit and support many jobs and yet consumers can have a little extra disposable income and the perception of having much more.

No kidding!

When the energy sector gets as stabilized as the health sector, we can all see better retirement.

Just imagine what our 401k will be like when the military sector realizes that all 3 can play the same game.

[SMKR]

Heading to American Sniper with a friend who works at Baker.

BHI is in the process of cutting 3000 globally.

And Halliburton is cutting 2, 500 while Schlumberger is cutting 9,000.

How was the movie?

[Strychnine]

And Halliburton is cutting 2, 500 while Schlumberger is cutting 9,000.

How was the movie?

Movie was incredible. Stuck to Chris' book very well. I think Cooper and Eastwood both deserve awards for it. I made sure to wear one of my Larue Tactical "God bless our troops... Especially our snipers" shirts. Even knowing the whole story there were times when I could honestly feel my heart beating out of my chest. The whole story makes me so glad there are people like that in the world.

But back on subject...
Oil is at $48.48 right now. Not climbing but also holding on and not going below $45 again.

[Strychnine]

Fun.

Saudi Arabia can last eight years on low oil prices, says former adviser

Mohammad al-Sabban says Riyadh has enough currency reserves to ride out long-term crisis and low prices may even benefit world’s biggest exporter





A former adviser to Saudi Arabia has said the country can withstand eight years or more of low oil prices as tensions over the price slump simmered between the world’s biggest oil exporter and Iran. Mohammad al-Sabban told the BBC that Saudi Arabia was concerned about the falling oil price but its cash reserves and planned budget cuts meant it could cope with a long period of depressed prices.

“Saudi Arabia can sustain these low oil prices for at least eight years. First, we have huge financial reserves of about 3tn Saudi riyals (£527bn). Second, Saudi Arabia is embarking now on rationalising its expenditure, trying to take all the fat out of the budget,” Sabban told the BBC’s World Business Report. “I think [Saudi Arabia] is worried but we [have to] wait for the full medicine that we have prescribed for ourself to take its course.”

Without cuts in spending on infrastructure, sports stadiums and new cities, Saudi Arabia can withstand low oil prices for at least four years, said Sabban, a former adviser to the Saudi minister for petroleum. He also suggested that lower oil prices could have long-term benefits for Saudi Arabia.

Saudi Arabia has refused to cut production despite a more than 50% fall in the price of oil since last summer. “To shorten the cycle, you need to allow prices to go as low as possible to see those marginal producers move out of the market on the one hand, and also if there is any increase in demand that will be welcomed.” His comments were a further signal that Saudi Arabia was prepared to use its financial strength to ride out depressed oil prices now piling pressure on other producers, including Iran, which also faces western sanctions over its nuclear programme.

A meeting between Saudi Arabia’s foreign minister and his Iranian counterpart was postponed partly because of disagreement over the falling oil price, Bloomberg reported. Saudi Arabia and other producers in the Persian Gulf “are expected to make efforts to stop the fall in oil prices and not let the decline have a lasting impact on oil-producing nations’ economies”, said Hossein Amir-Abdollahian, Iran’s deputy foreign minister for Arab and African affairs. Tensions have been building between Iran and other Arab oil states over what Iran has said is an international plot to weaken Tehran by forcing down the price of oil. Saudi Arabia and Kuwait opposed Iran’s unsuccessful effort to persuade Opec to cut output at its last meeting in November.

The price of crude oil has more than halved since June 2014 because demand has weakened, particularly from China, while the US shale boom has increased global production. Brent crude slipped back below $50 a barrel on Monday, falling 1.8% to $49.29, as traders expected gloomy economic growth figures from China on Tuesday and a bond-buying programme by the European Central Bank on Thursday aimed at stimulating the eurozone economy.

[Sean88gt]

Let them.
Because I'm enjoying the shit out of the prices.

Started looking at trucks again and the buy in seems to be falling. I don't care so much about fuel prices, but if I can save 30% on purchase price because an oil field guy is over-leveraged and in deep shit, then so be it.

[Silverback]

my family was in oil and gas most of my life, refining, distribution, gas stations, convenience stores, etc.

My grandfather told me back in the 80s when I was a kid. We budget and live for $20/barrel, and we hope for $50/barrel, then save as much as possible.

He sold everything in the 90s and went into real estate.