Hehe, This is a Quebec thing.... Alberta will win nothing other then pay less tariff equalisation... This is sad news for CAN dollars....
-
Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.
Oil Prices may be in for another major drop
- Thread starter NH Apache
- Start date
- Status
Hehe, This is a Quebec thing.... Alberta will win nothing other then pay less tariff equalisation... This is sad news for CAN dollars....
Electric Eye
Banned
OPEC declared a production cut and speculators caused the price of a barrel to rise however the Obama administration was extremely adamant about oil self reliance so US drilling and reserves were ramped up and we are self reliant and even export a ton so OPEC cuts turned out to have a minimal affect. The days of OPEC shannanigans are done for now. Let's see what Trump does.
Nah, they'll just frack harder.
Quintin DM
Member
ahaha first thing I thought, gonna see those game prices up to $89.99 by the end of the year
LOL, what am I reading?
You realize it was Harper that tied Canada to oil, right? Am I missing the sarcasm?
What i was thinking. Economy hinges too much on commodity prices. Going to hurt and might be a catalyst for a rise in populism...
Just in time for that Kevin O'leary fellow to run for PM?
I know nothing of Canadian politics
LegendofJoe
Member
Oil has to be cheap in order to be competitive, it's the new normal.
You can blame the province for putting all their eggs into the oil basket when it was crazy high and never wanting to diversify thinking it was going to stay high forever.
Ah, good. I was worried.
Yes. But also Kellie Leitch. Which i tink is just as dangerous.
Maybe canadians will learn from the mistakes of the past harper government to prevent a return to a conservative government.
Fracking plays a role as well. If the price hits 40-45 then fracking ramps up, so that keeps the price low as either OPEC can sell some oil to the US (the US still imports about 25% of its oil, while it exports about 12% of the oil it uses) at prices below that or they risk losing profits. There's not much room to win for OPEC. Cuts that are adhered to mean that it risks losing market share and seeing US production rise even higher. A lack of cuts means that the price drops further.
Just bought a big old gas guzzler. Praise the heavens.
The twitter accounts are supplementing the lower articles, both sourced by Reuters.
In fact, the Reuters sourced article in the Business Times link states 35 added last week.
I admit, I overdid the info a bit, but the twitter posts had nice images.
No one is arguing that there aren't rigs still on the hard. And, of course, the tens of OSV/PSV not doing shit either.
Goro Majima
Kitty Genovese Member
It was such a short sighted plan to undercut US shale oil production.
The technology just keeps getting cheaper because US oil companies keep investing in R&D to bring the cost down so they can make money no matter what OPEC does. If they can get it to be consistently profitable at $30 per barrel, who knows how low prices can go? It's kind of a weird catch 22 for oil and gas because they can't just sit around and do nothing...they need to make money even if they prefer higher prices.
pr0cs
Member
These talks about eggs in baskets arr always popular with those people trying to feed their families.
Very helpful
Pretty sure those prices were future contracts, so basically they were betting on the price in the future with little basis on current supplies. Take this with a lot of salt though...
gutter_trash
Banned
RIP Canadian Dollar
Reckheim
Member
Its an attempt to bury anyone that isn't Saudy Arabia and its working.
Even if trump is upset about it I don't think there is anything he can do about it.
Oppo
Member
Goro Majima
Kitty Genovese Member
So this isn't meant to be an exhaustive or even authoritative list but as I understand basically US domestic fracking and offshore production was ramped up because they could afford to push new and more expensive forms of exploration and development due to higher oil prices. Once it all went online and then OPEC turned around and opened the floodgates to drive prices down to eliminate US production, we had a glut. On top of this, Chinese demand (which had been driving insane growth in the commodities markets due to speculation) had begun to wane quite a bit.
Also imagine if every month the world is producing 3-5% more oil than it needs. It's not a huge amount in a single month but this went on I believe for a few years. So all that excess supply adds up which just further depresses prices.
Recently, OPEC agreed to a production cut starting Jan 1, 2017. But, oh wait, it turns out that US oil production doesn't need $120+ per barrel anymore to come back online due to R&D in the past few years so the OPEC cut didn't have the effect the market wanted it to and now speculation is driving prices down yet again.
Still, I believe Saudi Arabia is the only nation capable of producing at like $15-20 barrel while making something. But the problem there is that they've built up a generous national budget based on oil prices which they can no longer support and especially not at the current $30 per barrel.
Saudi Arabia govt. gives tons of stuff to it's people no? I know this has hurt them and they had to cut back substantially.
They voted in their provincial government on that backing and the fact the government decided to go head on with this approach. They were so high on oil that for once they weren't a have not not province they actually bitched that they had to help out the other provinces after decades of taking. Now they are back to being a have not.
This is no different than people voting trump and them being surprised that he's going to remove the aca, something he promised to do on the campaign trail.
Sorry if pointing out stupid choices made by people is somehow hurting their feelings. Actions have consequences. Don't mindlessly vote for a government that wants to put everything into oil and cut taxes, cut social services, doesn't want to invest in other industries because they thought oil would be mega expensive forever.
Basically this. According to an Exxon industry talk I attended a few months ago, the world production yielded a 1% surplus, daily.
Every 100 days, 100% daily surplus. Since 2014.
That's why China has built the world's largest oil storage facilities as they bought when the price was low. This is why there are still tankers just sitting off the coast, full, not doing anything because it's cheaper for them to sit and wait for the price increase.
Lord Error
Insane For Sony
*edit* sorry, I see it was a joke - I missed the whole second page.
PantherLotus
Professional Schmuck
Real talk: this puts tremendous pressure on a number of shallow economies, not the least of which include Russia and Iran. Keep these two in mind over the next few months for contextualizing what Trump is doing.
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
Canada has seen nothing yet, Trump will wreck the auto industry in Canada. All production will move to the US.
PantherLotus
Professional Schmuck
1. US flooding the market via fracking
2. OPEC (magically!) choosing not to cut production
Yes it was about putting pressure on Russia and Iran.
note:
[x] Iran Nuclear Deal
[ ] Russia coming back to the big boy table
Ok, one out of two ain't bad. That Russia did -- and is doing the opposite via worldwide destablization -- probably should've been expected.
Admiral Woofington
Member
Most of the people I know in oil, including myself, has already been laid off. I'm in a new industry, hopefully with news like these they start considering new industries.
gutter_trash
Banned
Trudeau never campaigned as a Lefy-Left socialist.
This idea that Canada is going to halt oil on a switch is unrealistic.
The Federal NDP are currently out of sink with their most successful Provincial counterpart: Notley's NDP in Alberta. Notley is more on the same page as Trudeau because of reality.
This idea that Canada is going to halt oil on a switch is unrealistic.
The Federal NDP are currently out of sink with their most successful Provincial counterpart: Notley's NDP in Alberta. Notley is more on the same page as Trudeau because of reality.
Got an interview with a pleasure boat manufacturer Monday. And another with a large yard that does CG and Navy vessels. Time to get out.
I just like playing with the big toys though. One of my more recent projects:
About 4-5 city blocks big.
Now considering playing with 13 ft. pleasure craft. Sigh.
andythinkpad
Member
Haha time to buy another lens directly from Canadian camera store again.
Also looking forward to see Saudi fiscal balance get fucked again.
Also looking forward to see Saudi fiscal balance get fucked again.
tearsintherain
Member
Thats all basically correct. Saudi oil costs are around $10 per barrel, Kuwait is around $8.50, Russia is around $17, etc
Shale oil (fracking) prices have dropped DRAMATICALLY. It started at around $100/barrel, but has gone down a lot. It varies heavily from well to well due to horizontal or vertical and water pressures and even company size/number of wells, but it is approaching $30/barrel for many places and is estimated to hit $20 within the next few years.
That sorts of really sets a ceiling on oil, above $50 and there are a lot of places around the world who can open up their spigot. At current known levels there are at least 40 years more of oil in the world.
Keep in mind just 15-20 years ago many experts were all about peak oil, about how the middle eastern oil fields were going to run dry soon, etc. Then Russia, Canada, Africa, etc discovered trillions of barrels underground.
Don't worry Christie fixed that problem.
Difficult to maneuver when you're dealt a shitty hand i guess. Like getting 9s over 10s in a hand of euchre. Going to be tough to work around.
It's been sitting at $1.40 a litre on Australia for a while now. Pretty horrible for someone who has to drive close to 100km a day.
- Status