Thread: Oil Curse: Sooner Rather Than Later

Originally Posted by panama hat

Has Russia sorted out its dirty oil issues completely?

Can somebody enlighten me when the oil business is a "dirty issue"?

Or did I miss the point that the world business is no longer faring under free market style?

I am also puzzled what is the purpose of the OPEC? In the free market business there are certain laws called "Anti-trust" law, or "Cartel Law" or "Competion Law" that should avoid creating monopoly dictating prices.

Antitrust laws are the broad group of state and federal laws that are designed to make sure businesses are competing fairly. Supporters say antitrust laws are necessary for an open marketplace. Competition among sellers gives consumers lower prices, higher-quality products and services, more choice, and greater innovation. Opponents argue allowing businesses to compete as they see fit would ultimately give consumers the best prices.

The trust in antitrust refers to a group of businesses that team up or form a monopoly in order to dictate pricing in a particular market.

Antitrust laws exist to promote competition among sellers, limit monopolies and give consumers more options.

Obviously such laws are not needed on such unimportant commodities as oil, are they? Or somebody (perhaps the God) bestowed an exception (we are exceptional) to the oil business?

Let them keep pumping; in round numbers global demand is 100mbpd, down around 20% and falling due to the virus which means without reduced production there is 20m bpd looking for a home; then what!

Global inventories are full at 1-1.8bn barrels according to different accounting methods; thousands of tankers are full and swimming offshore at >$200k/day waiting for a destination; cost of land storage has doubled to $4/cubic m/month, and that kid in Riyadh wants to start a war? So let him pump at full capacity, which btw risks damaging his wells, and then what? As storage fills, oil is still coming through which means it gets backed up along the entire supply chain.

We could end up with a negative oil price, not for the first time. During the 2016 downturn, a North Dakota crude was briefly priced at -50 cents a barrel, ie, take as much as you want and collect 50c/b as you pass go. Sure it didn't last long, but when that scare was over the price stabilised at $1.50/b, less than production costs. Two weeks ago MEGroup was offering oil at -19c/b; iow, fill up your socks and collect 19c/b on the way out; also at around the same time Canadian (?) crude was selling at below production cost.

No easy way out, they either reach agreement however painful to all, or keep pumping oil that nobody wants with nowhere to store it.

Originally Posted by Klondyke

Can somebody enlighten me when the oil business is a "dirty issue"?

Originally Posted by OhOh

I suggest everybody's oil is dirty to xxx degree

I'm surprised I have to say this . . . but google it.

Originally Posted by OhOh

I'm surprised NZ road builders don't use the stuff.

Why would I know. I drive on it, I don't build it.

Originally Posted by OhOh

Do your sheep, being driven to market or your shepherd's dogs, get stuck in it?

I don't drive sheep to market, I don't have shepherds, just like we don't have gardeners, we have landscapers . . . and they aren't my sheep.


Did you two get drunk together today and plot the overthrow of the capitalist system? Putin and Xi wouldn't be happy about that

Originally Posted by jabir

We could end up with a negative oil price, not for the first time. During the 2016 downturn, a North Dakota crude was briefly priced at -50 cents a barrel, ie, take as much as you want and collect 50c/b as you pass go. Sure it didn't last long, but when that scare was over the price stabilised at $1.50/b, less than production costs. Two weeks ago MEGroup was offering oil at -19c/b; iow, fill up your socks and collect 19c/b on the way out; also at around the same time Canadian (?) crude was selling at below production cost.

I think you are confusing the "oil price" with some niche producer(s) desperately gambling to keep a well open because they know once it's closed it's over.

And the Canadian Sands shit needs I think something like $50 a barrel to break even; like Venezuela they have to use dilutents to make it even viable.

As for the rest of them, they are still bringing in some money, although not enough to keep the Putin and raghead savings accounts topped up.

China is probably building storage like it was building "hospitals", because this is a great opportunity to stock up at bargain basement prices.

Oil Price Charts | Oilprice.com

Originally Posted by OhOh

Some countries are still considered capitalist?

Yes.

So, have you lived and/or worked in China or a communist country?

Originally Posted by panama hat

plot the overthrow of the capitalist system?

Amazing to know that some are totally brainwashed by propaganda (of the so called free-market), so they are not happy when the commodity prices go down...

What does is say about their ignorance?

Originally Posted by panama hat

I don't drive sheep to market

One never knows exactly, what pies other posters fingers are in.

Originally Posted by Klondyke

Amazing to know that some are totally brainwashed by propaganda

Originally Posted by Klondyke

What does is say about their ignorance?

I'd suggest that it says a lot about you

Originally Posted by harrybarracuda

I think you are confusing the "oil price" with some niche producer(s) desperately gambling to keep a well open because they know once it's closed it's over.

And the Canadian Sands shit needs I think something like $50 a barrel to break even; like Venezuela they have to use dilutents to make it even viable.

As for the rest of them, they are still bringing in some money, although not enough to keep the Putin and raghead savings accounts topped up.

China is probably building storage like it was building "hospitals", because this is a great opportunity to stock up at bargain basement prices.

Oil Price Charts | Oilprice.com

As a side issue, China could well come out of this mess stronger and richer than it was 4 months ago.

Originally Posted by harrybarracuda

What a day, looking at those names and trying to figure out which ones might not cheat.

Originally Posted by jabir

What a day, looking at those names and trying to figure out which ones might not cheat.

...they will all cheat...it's what they do...

So they all agree to the rules, each knowing that everyone else will be fiddling the books.

Much like everything else works nowadays; but the bit I still need to get the head around is the wisdom in upping production while knowing not only that inventories are full and nobody wants the growing surplus, but that storage facilities still available would be more expensive.

Originally Posted by jabir

So they all agree to the rules, each knowing that everyone else will be fiddling the books.

Much like everything else works nowadays; but the bit I still need to get the head around is the wisdom in upping production while knowing not only that inventories are full and nobody wants the growing surplus, but that storage facilities still available would be more expensive.

...the goal is to push US shale producers out of business so that Russia, Saudi (and OPEC generally) have the upper hand before peak oil occurs...

Originally Posted by jabir

What a day, looking at those names and trying to figure out which ones might not cheat.

Looking on those names as well, trying to find the biggest oil exporter as it was claimed here lately. Or is he (please no names here) not OPEC nor Non-Opec? Any other species?

Or did I get it wrong with my poor English?

^

Goldilocks's banker friends will loan the frackers more money to ensure no bankruptcies occur. It's capitalism these days. Ideal in an election year and an owned FED.

Originally Posted by Klondyke

Any other species?

See the conditional * against Mexico? Search for US/Mexico "oil cut" arrangement.

Goldilocks has made another "promise/retirement fund donation" to some foreign politician. If his offer is refused watch for regime change/bombs dropping. SOP - Yemen, Iraq, Syria, SA, Ukraine, Sudan, Libya, UK (Major, Blair, Cameron, May took the boardroom invitations, will Boris?) ....

All so he can be re-elected.

Originally Posted by tomcat

...the goal is to push US shale producers out of business so that Russia, Saudi (and OPEC generally) have the upper hand before peak oil occurs...

This was a fringe narrative touted by I think oilprice.com and others, but I can't believe that Putin and MsB constructed this major hoax to undermine US shale and give them bigger market shares. Like him or not, Putin is a seasoned strategist, and no way would he get into bed with a childish, stubborn, pigheaded, unreliable and blunder prone Saudi superego in such a global play against, like him or not, Trump who will protect US shale.

At the beginning of the session that kicked off the 'price war', the Russians made it clear that they were prepared to cut production, but not right now, needing to wait and see how the virus affects market conditions so that their share of cuts could be made with least damage to their economy. MbS spat the dummy, not used to hearing no without a head being lopped off, and issued an ultimatum which Putin, increasingly the only adult in the room, turned down, resulting in $20 oil and yet more enmity that the future king of Saudi should not be wanting. Still can't believe Putin conspired with MbS, and even if he did they're no nearer to pwning US shale.

Sorry mate, nothing makes sense anymore, and scary bit is I don't think it's the virus.

Originally Posted by OhOh

^

Goldilocks's banker friends will loan the frackers more money to ensure no bankruptcies occur. It's capitalism these days. Ideal in an election year and an owned FED.

An owned FED? Are you serious? By the time this is over with more trillion $ stimulus packages almost certain to come, the FED will be closer than ever to pwning the US Treasury!

Originally Posted by Klondyke

Or did I get it wrong with my poor English?

Yes, you did. Again.

FOK

Originally Posted by jabir

This was a fringe narrative touted by I think oilprice.com and others, but I can't believe that Putin and MsB constructed this major hoax to undermine US shale and give them bigger market shares. Like him or not, Putin is a seasoned strategist, and no way would he get into bed with a childish, stubborn, pigheaded, unreliable and blunder prone Saudi superego in such a global play against, like him or not, Trump who will protect US shale.

...realpolitik makes for odd bedfellows...

Originally Posted by jabir

This was a fringe narrative touted by I think oilprice.com and others

Hubbert...and then later Kuntsler.

The Duran, highly recommended, always an interesting take on world affairs.