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  1. #1
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    Oil prices remain weak as OPEC and non OPEC countries continue to oversupply markets

    My it's a good job Slimey Salmond didn't get his way, isn't it!


    Oil prices remain weak as OPEC and non OPEC countries continue to oversupply markets
    NewsMar 20, 2015

    Eithne Treanor
    By Eithne Treanor

    The low oil price environment seems to be settling in for longer than the market anticipated as OPEC and non-OPEC producers continue to deliver oil to an over supplied market. Strength in the dollar also impacted the price slide this week and in early trading on Friday, Brent crude was priced below US$54 with WTI struggling around US$43 a barrel.

    Kuwait’s oil minister, Ali al-Omair said that OPEC had no choice but to keep its production steady despite the excess supply. He made it clear that the organisation was not willing to lose market share at a time when non-OPEC players were also flooding the market.

    He said that non-OPEC players needed to “cooperate” and reduce production, re-iterating many of the ministers sentiments that OPEC did not create the over supply on the market and they were not going to act to reduce it. He acknowledged that the lower price environment was creating a strain on the budgets of oil producing countries.

    The possibility of additional oil on the market may become a reality in the next year if talks between Iran and the international community continue with positive results. Restrictions on Iran’s oil exports could be eased or lifted if the Islamic Republic agrees to strict limits on its nuclear program.

    American and European officials continue their talks with the Iranians on a shift in policy. Foreign ministers from the UK, France and Germany are due to meet Iranian nuclear negotiators in Lausanne on Saturday. While any resolution would be welcomed on a geopolitical level, the impact on the oil price could be detrimental.

    According to Bank of America Merrill Lynch, the hope of a faster “V-shaped recovery in oil prices is unlikely.” Looking back in history, the bank says, that rising commodity prices have dominated the global economy for the past 15 years in combination with a zero interest rate policy, and a weak dollar. “This cycle has now gone into reverse with a decelerating industrial economy in China and the rise of US shale.”

    The bank fears that “this combination of a stronger dollar, a slowing China, and falling commodity prices is not going away anytime soon” and it cautions sustained slower demand. The bank put its average price for Brent in 2015 at US$52 and in 2016 at US$58 a barrel.

    American stockpiles continue to rise and surprised the markets by adding 9.6 million barrels last week to total 458 million barrels. That’s the highest in 80 years according to the US Energy Information Administration. Shale output is showing few signs of slowing down despite financial cutbacks and the fall in the number of rigs currently operational.

    A report from Capital Economics is more optimistic that BoA Merrill Lynch and says that this situation cannot last. Julian Jessop, Head of Commodities Research says, “new lows for US oil price unlikely to be sustained” and he sees Brent becoming the better international benchmark.

    He fears the WTI price could fall sharper in the short term, but adds, “the slump in the number of active drilling rigs is already being reflected in slower growth in US production and outright declines should follow soon.” A period of even lower prices in the short term should also help energy demand recover more quickly. He puts an average price for Brent at around US$60 a barrel for 2015.

    With no fast global economic recovery expected, the market will welcome any news of positive activity. The US economy is still showing slow strength in the labour market and the jobless rate fell to 5.5 per cent in January. Consumer sentiment hit a new record high above 103 in January and 96.4 in February but US retail sales unexpectedly fell in February and industrial production and manufacturing orders dropped.

    The big fear in the US now will be that any interest rate hike from the Federal Reserve will impact this delicate growth pattern. The Fed downgraded its economic growth and inflation projections, a signal the market took positively as no rush to bring borrowing costs back to more normal levels.

    An OECD forecast says that China’s economy is likely to grow around 7 per cent this year and slightly less at 6.9 per cent in 2016, as the government pushes reforms on interest rates and currency, and maintains its policy of slower but higher-quality growth.

    The Bank of England could consider cutting interest rates if inflation threatens to fall further. Euro-zone economies continue to improve slowly with GDP in the fourth quarter of 2014 at 0.3 per cent after a 0.2 percent quarterly growth in the third quarter and 0.1 percent in the second quarter of the year.

    White the major international oil companies are taking a hit on share price and dragging valuation on the stock markets with them, one of the world’s biggest trading companies has a different perspective. Vitol saw a sharp recovery in profits in 2014, reaching US$1.35 billion in after-tax net profits. Extreme volatility in the fourth quarter certainly helped when the oil price began its decline.

    Even if a deal is reached with Iran, there’s little chance of additional barrels in the near future. This will hopefully give the market time to recover when demand is expected to pick up in the second quarter.

  2. #2
    Hansum Man! panama hat's Avatar
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    Budges here have been slashed due to the drop in oil prices . . . bad times

  3. #3
    Thailand Expat Black Heart's Avatar
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    As one poster aptly noted: "adapt or die."

    This guy not only is not trying to adapt, but he didn't save his money.



    The boom, the bust, the darkness: suicide rate soars in wake of Canada's oil crisis


    In what used to be the ‘Texas of the north’, unemployment is creeping to 2008 levels, employment insurance beneficiaries have doubled, and the once economic powerhouse is in the throes of a potential mental health crisis

    In Alberta, 40,000 oil jobs have been lost since the price of petroleum plummeted

    Omar Mouallem in Edmonton, Alberta
    Monday 14 December 2015

    Jesse Seibel of Whitecourt, Alberta, used to wake up every day at 3am, fully rested and ready to work. Having laboured in the northern oil patch since his teens, just like his father, the tattooed and pierced wireliner had grown oddly appreciative of the work’s long hours and hard labour.

    At 26, Seibel, who never finished high school, was earning as much as $5,000 a month threading electrical cables into reservoirs, enough to live comfortably and never miss paying rent and child support.

    Then, last February, he was sent on a three-day stint, not knowing that his employer was preparing his termination papers. He learned that he’d been laid off along with others days later. Within months, he and his girlfriend were homeless and moving into his parents’ house.

    Now he’s $7,000 behind on child support payments. “I tried so hard to do it on my own, be a good father – the guy who goes to work everyday and earns his money,” he says. “It’s very depressing.”

    Seibel’s represents one of 40,000 Alberta oil jobs lost since the price of petroleum plummeted late last year. According to Petroleum Labour Market Information, 185,000 will have been lost by spring, as a result of the market crash.

    Only Saskatchewan, another energy-dependent region, has a higher rate, and it’s seen 19% more suicides this year

    But just two years ago, life in Canada’s energy hub was different: Alberta accounted for an incredible 87% of the country’s new net jobs, according to Statistics Canada, and more and more people were moving west for work. Today, unemployment is creeping to 2008 levels, employment insurance beneficiaries have doubled, and the once economic powerhouse is in the throes of a potential mental health crisis.

    Between January and June, suicide......

    The boom, the bust, the darkness: suicide rate soars in wake of Canada's oil crisis | World news | The Guardian
    As of March 15, 2016, I have 97Century Threads.

  4. #4
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by Black Heart
    unemployment is creeping to 2008 levels, employment insurance beneficiaries have doubled, and the once economic powerhouse is in the throes of a potential mental health crisis
    Time to legalize weed in Canada.

  5. #5
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    Quote Originally Posted by panama hat View Post
    Budges here have been slashed due to the drop in oil prices . . . bad times
    Shocking!!



    The result of a free market which "everyone" in business seems to delight in until...

  6. #6
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    About time oil profits are slashed closer to reality. Saudi Arabia and others may actually have to balance their check books and see how much money they have.

  7. #7
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    ^ I read somewhere they will run out of cash in 5 years as apparently their production costs are quite high.

  8. #8
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by VocalNeal
    Shocking!!
    yes - bugie slashing is terrible at any time

    as pointed out in another thread, commodities prices are well under production costs for probably over 50% of the mines in the world - in the next 6 months there will be many closing down

    until demand picks up - which is china - the prices will remain very depressed

  9. #9
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    Quote Originally Posted by VocalNeal View Post
    ^ I read somewhere they will run out of cash in 5 years as apparently their production costs are quite high.
    So I guess they will all return to the desert and live in tents.

  10. #10
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    Quote Originally Posted by baldrick
    until demand picks up - which is china - the prices will remain very depressed
    The huge demand by China is over, you can only build so many new cities etc they have been built now.
    India is the next hope for massive expansion, miners will be doing the numbers as to how much and when, many mines are finished for good.

    As for oil, simple answer, stop buying Mid east oil, buy locally produced, plenty of oil supplies in the west and Russia, price goes up a bit, but you keep the jobs.

    That may effect big oil's profits, but secures our supply long term, not going to happen, too much money involved, who cares if there's no jobs.
    Cut benefits to those lazy unemployed oil workers, dollars first, country last.

  11. #11
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    At 26, Seibel, who never finished high school, was earning as much as $5,000 a month threading electrical cables into reservoirs, enough to live comfortably and never miss paying rent and child support.
    he should have put some away for the inevitable rainy day then.

  12. #12
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by jamescollister
    The huge demand by China is over
    their megaprojects throughout asia will fuel the next demand - but when is the question

  13. #13
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    Quote Originally Posted by VocalNeal View Post
    ^ I read somewhere they will run out of cash in 5 years as apparently their production costs are quite high.
    Not so much that as the amount of money they are spending trying to avoid being overthrown.

  14. #14
    better looking than Ned
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    Yep many desperate company's and people out there at the moment had major budget and salary cuts, lost business class flights, travel allowance. Probably expecting to see about 80,000 USD less in my pay packet this year and that's if l even if l still have a job the way oil is going.
    It will bounce back just a matter of time, need to bomb some oil fields and refineries to get back on track.
    The oil company's try and save money by cheap rigs and labour but in reality it cost more to produce due to the down time and fcuk ups caused by idiots.

  15. #15
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    Quote Originally Posted by Rigger View Post
    Yep many desperate company's and people out there at the moment had major budget and salary cuts, lost business class flights, travel allowance. Probably expecting to see about 80,000 USD less in my pay packet this year and that's if l even if l still have a job the way oil is going.
    It will bounce back just a matter of time, need to bomb some oil fields and refineries to get back on track.
    The oil company's try and save money by cheap rigs and labour but in reality it cost more to produce due to the down time and fcuk ups caused by idiots.
    Not going to bounce back any time soon, especially when Iran starts pumping too.

  16. #16
    better looking than Ned
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    Quote Originally Posted by harrybarracuda View Post
    Quote Originally Posted by Rigger View Post
    Yep many desperate company's and people out there at the moment had major budget and salary cuts, lost business class flights, travel allowance. Probably expecting to see about 80,000 USD less in my pay packet this year and that's if l even if l still have a job the way oil is going.
    It will bounce back just a matter of time, need to bomb some oil fields and refineries to get back on track.
    The oil company's try and save money by cheap rigs and labour but in reality it cost more to produce due to the down time and fcuk ups caused by idiots.
    Not going to bounce back any time soon, especially when Iran starts pumping too.
    I am on a gas production and exploration project that still has two or more years to run but all could shut down tomorrow.
    Better not to worry over things that we can't control.

  17. #17
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    Quote Originally Posted by Rigger View Post
    Quote Originally Posted by harrybarracuda View Post
    Quote Originally Posted by Rigger View Post
    Yep many desperate company's and people out there at the moment had major budget and salary cuts, lost business class flights, travel allowance. Probably expecting to see about 80,000 USD less in my pay packet this year and that's if l even if l still have a job the way oil is going.
    It will bounce back just a matter of time, need to bomb some oil fields and refineries to get back on track.
    The oil company's try and save money by cheap rigs and labour but in reality it cost more to produce due to the down time and fcuk ups caused by idiots.
    Not going to bounce back any time soon, especially when Iran starts pumping too.
    I am on a gas production and exploration project that still has two or more years to run but all could shut down tomorrow.
    Better not to worry over things that we can't control.
    I'm not worried.


  18. #18
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    Quote Originally Posted by taxexile View Post
    At 26, Seibel, who never finished high school, was earning as much as $5,000 a month threading electrical cables into reservoirs, enough to live comfortably and never miss paying rent and child support.
    he should have put some away for the inevitable rainy day then.
    Well it is Canadian dollars

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