oil

[Pipers]

The big 3 Saudi Iran Russia are not going to stop pumping now well into the summer, Iran wants its market share back, Russia has big reserves of cash and bullion for at least 12 months and there economy is as bad as it will go.  I think oil may go back down into the mid $30 again Saudi may even pump more to push the price down lower to concentrate the minds .   Thats just my opinion I may be well out on this.

[KDave]

I agree Pipers, you know my position on oil but I do think short term we will see further price drops because 'politics' basically. This last man standing action is a dangerous game to play, particularly for the Saudis given their reliance on revenues for social stability. Despite this I am not confident we have seen a bottom in oil but could be wrong. There has been some disruption to the middle eastern supply recently (Kuwait) which once cleared should add to the over supply and I think the additional supply from Iran will suppress prices further, but the extent of that may not be seen for some time yet.

Fracking in the US (anywhere really) appears to be finished at these prices. New conventional supply will be very limited except in the countries that can get oil out of the ground cheaply. I am no expert but I can think of a few places where these prices are going to make any new supply difficult or impossible - Canada's oil sands, North Sea for example. The days of sinking a well in the ground and collecting oil from a gusher are mostly a thing of the past, certainly on any meaningful scale. For much of the world, getting a large supply of oil requires considerable investment and higher prices to support that investment as recent history has demonstrated. All IMO. 

Also today I was very surprised by the lack of action in the markets, disappointed really. I guess it was mostly priced in after all. There will be a balance at some point though I am still optimistic better value will be seen. Long term oil is looking attractive - again IMO. 

[Pipers]

I agree in the long term oil will go to 65-70usd a nice earner, 

[HawkHybrid]

will the long term $70 have as much purchasing power as

the current $40?

 

HH

[HawkHybrid]

if profits for 2015 was not up from 2014, yet oil dropped

from ~$100 to ~$50/barrel. would companies that are

energy dependant have recorded a loss if oil hadn't

dropped? would a rise in the oil price put pressure on

those companies to reduce demand?

 

HH

[KDave]

The crutch that is low oil prices.

[Pipers]

Just watched a report on RT Cap-ex across the industry is down again, this is looking good for higher oil prices in the long term.  

[KDave]

The new narrative I am seeing is that keeping oil above the $50 a barrel mark is the latest game in town - the Saudis in particular are hurting as predicted and have changed tactics, no longer wishing to contribute to lower prices to suppress shale growth.

Not sure about Iran's part in this as they are still ploughing capital into renewing and upgrading their oil infrastructure which will no doubt lead to greater supply. Everywhere I look there are contradictions regarding potential short term price direction. Long term is still good imo. 

[HelpingHands]

OPEC agrees on supply cut.

http://www.cnbc.com/2016/11/29/oil-markets-jittery-ahead-of-opec-meeting-later-in-day.html