You Could Give Me Heating Oil For Free and I Couldn't Use It But...

[BrotherBart]

Something to think about.

http://www.fool.com/investing/gener...es-another-warning-of-a-future-oil-price.aspx

 

[begreen]

Interesting dilemma for OPEC and the rest of us.

 

[BrotherBart]

What they say about depleting and not replacing your reserves is so true. I could never stand Boone Pickens but he gave me my favorite petroleum business line. "If you aren't replacing your reserves then you are selling your oil company a gallon at a time through the gas pump."

 

[woodgeek]

Sounds like a lot of hand wringing of an article for a couple BS comments from al-Naimi.

The commentary I've read suggested that the Saudi's are all good with the current situation, and that al-Naimi is just trying to temporarily goose the market up a bit off the lows before the big annual OPEC meeting.

 

[Brian26]

Something to think about.

http://www.fool.com/investing/gener...es-another-warning-of-a-future-oil-price.aspx

Oil crashed again to almost a 10 year low.

Ships in the Gulf are dropping anchor loaded with oil as the tanks are full. I think we are in for cheap oil for awhile.



100 million barrels at sea.

http://www.trefis.com/stock/nat/articles/325204/oil-glut-grows-100-million-barrels-at-sea/2015-12-04

By (broken link removed to http://www.wallstreetdaily.com/author/tim-maverick/), Senior Correspondent

The news from the oil patch is, in a word, ugly.

Despite decent growth in demand, oil inventories around the globe are growing as oil producers like (broken link removed to http://www.wallstreetdaily.com/2015/11/05/saudis-market-share-oil/), Russia, and Iraq are pumping oil at record levels.

According to the International Energy Agency (IEA), inventories of crude in developed countries stand at a record three billion barrels. Global inventories are at levels not seen in at least a decade.

And those inventories continue to grow at a pace in excess of one million barrels per day. Global oil production in October alone stood at 97 million barrels per day, according to the IEA.

100 Million Barrels Floating at Sea
Many onshore oil storage facilities are nearing capacity. In response, oil traders are storing oil at sea in supertankers.

In fact, there are now more than 100 million barrels of oil floating at sea! That’s more than double the level seen earlier this year.

And these oil tankers are everywhere . . .

Five very large crude carriers (VLCCs) are sitting outside Chinese ports. Another 14 VLCCs are parked near ports in Southeast Asia. Each VLCC can carry about two million barrels of crude.

It’s no different here. There’s a record amount of crude oil sitting in ships off the Gulf Coast. Here’s a graphic showing the ships off the coast of Texas:

 

[BrotherBart]

Yep. And the OPEC meeting broke up today with no agreement to cut production. It is gonna be buy one get one free pretty soon.

 

[BrotherBart]

Some guy here said in July that oil was gonna be cheap through the end of the year if not beyond. Wonder who that guy was.

 

[Brian26]

Yep. And the OPEC meeting broke up today with no agreement to cut production. It is gonna be buy one get one free pretty soon.

Crazy. How much lower can it get...

Oil prices briefly fell back below $40 a barrel on Friday after reports that the world’s biggest oil cartel affirmed what most observers expected: There will be no production cuts even though the market is swimming in crude.

The Organization of the Petroleum Exporting Countries on Friday stood by its policy of pumping crude even with inventories sitting at record levels.

 

[BrotherBart]

Since half of what I am worth is invested in oil company stocks I am wondering the same thing.

But the bad kicker is that exploration is gonna come to a screeching halt and five to ten years from now it ain't gonna be pretty.

 

[mass_burner]

Since half of what I am worth is invested in oil company stocks I am wondering the same thing.

But the bad kicker is that exploration is gonna come to a screeching halt and five to ten years from now it ain't gonna be pretty.

So keep buying low now. I assume since its in the market, you don't need it for retirement anytime soon.

 

[begreen]

Just wondering how much of low oil prices aren't to keep pressures on the Russian economy. When you look at who is hurting from low oil prices they are the first to come to mind. Add in the sanctions imposed and then look at how the ruble is doing.

 

[BrotherBart]

At sixty-nine years old the only thing I am buying low is at the supermarket.

 

[BrotherBart]

Just wondering how much of low oil prices aren't to keep pressures on the Russian economy. When you look at who is hurting from low oil prices they are the first to come to mind. Add in the sanctions imposed and then look at how the ruble is doing.

It is just a commodity in free fall. And like I said, it is gonna cause un-believable damage. Drying up of investment in exploration and along with it a drying up of investment in alternative energy sources. A cheap today for a hellacious tomorrow.

 

[woodgeek]

I agree that the oil price is simply a glut/price war, and I don't see it ending until the US tight oil folks are wiped out or nearly so. I also agree that if demand were to grow indefinitely into the future, then the lack of oil investment will lead to a future crunch. An interesting question will be if tight oil production gets shut in due to bankruptcy or low price, will it be restartable (relatively) quickly when the price recovers, or not? Of course the other question is whether oil demand in 2025 will be higher than that in 2015, or on a long term decline that can be met with conventional production largely outside the US?

XOM and the majors will be 'ok', they've played this game before. The Exxon folks I talked to during the boom years of >$100 oil were totally fixated on there being another 1985-type event, and being prepared for it. Rex's bet on that tight oil company notwithstanding.

As for wind and solar, um, they are still booming. Replacing electricity whose cost is decoupled from oil. Even 'cheap' fracked gas is only just cheap enough to reach baseload power rates in the US, sometimes.

From: (broken link removed to http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf)

* Global investment in renewable power and fuels (excluding large hydro-electric projects) was $270.2 billion in 2014, nearly 17% higher than the previous year. This was the first increase for three years, and reflected several influences, including a boom in solar installations in China and Japan, totalling $74.9 billion between those two countries, and a record $18.6 billion of final investment decisions on offshore wind projects in Europe.

* The trend last year was, arguably, even more impressive than it would seem from the investment numbers, because a record number capacity of wind and solar photovoltaic power was installed, at about 95GW. This compared to 74GW in 2013, 79GW in 2012 and 70GW in 2011, the only year in which dollar investment was higher than 2014, at $278.8 billion. The main reason why investment last year was below that three years earlier was that technology costs, particularly in solar, have fallen sharply during the intervening period.

* A key feature of 2014 was the continuing spread of renewable energy to new markets. Investment in developing countries, at $131.3 billion, was up 36% on the previous year and came the closest ever to overhauling the total for developed economies, at $138.9 billion, up just 3% on the year. Indonesia, Chile, Mexico, Kenya, South Africa and Turkey were all in the billion-dollar-plus club in 2014 in terms of investment in renewables, and others such as Jordan, Uruguay, Panama, the Philippines and Myanmar were in the $500 million to $1 billion range.

OIl is hurting EV sales, or at least EV sales growth. Both the Volt and the Leaf are rolling over to new models, and had sales hiccups on the older inventory. Tesla sales have been booming, independent of oil price. Overall sales of EVs in 2015 are down slightly relative to 2014. Total cumulative global sales of EVs have reached ~750,000 as of 2015, and are hovering around 1% of new car sales in the US.

 

[sportbikerider78]

We are extremely fortunate that oil is cheap right now. Our economy is in the tubes and $5/gallon gas would be devastating.

 

[Seasoned Oak]

Crude prices in the high 30s today. Hard to believe. Iv got a lot of empty tanks since i got away from oil. About 2000 Gals worth.

 

[Brian26]

Crude prices in the high 30s today. Hard to believe. Iv got a lot of empty tanks since i got away from oil. About 2000 Gals worth.

7 year low the other day. These are some insane price

Some guy here said in July that oil was gonna be cheap through the end of the year if not beyond. Wonder who that guy was.

Looks like low oil prices are here for quite awhile.

Crude fell to its lowest price in seven years on Friday after the world’s leading energy forecaster said oil inventories would continue to swell next year with supply outstripping demand.

“The message is very clear for 2016. The price outlook remains very gloomy for oil producers,” said David Hufton, chief executive of London-based broker PVM. The 2008 lows — of $36.20 a barrel for Brent and $32.40 a barrel for WTI — “will have to be broken”, he warned.

http://www.ft.com/cms/s/0/d06ba5cc-9ff2-11e5-8613-08e211ea5317.html#axzz3u6avIFC9

 

[woodgeek]

7 year low the other day. These are some insane price

Pls define insane....

Inflation corrected oil prices were lower than the current $37 for nearly all of the period 1985 to 2004, 19 years.

I don't see why they can't be this low or lower for a couple years. The Saudis have 4 years of money in the bank if they don't tighten their rather posh belts.

In a more distant future where global oil demand is lower and falling (some has to be left in the ground, they say), I don't see why the price couldn't be here or lower for decades.

 

[velvetfoot]

Unless it's taxed to death.

 

[woodgeek]

This would be an excellent time to add a real gas tax, indexed to inflation!

 

[Brian26]

So keep buying low now. I assume since its in the market, you don't need it for retirement anytime soon.

I agree. Buy now when its low.

Pls define insane....

Inflation corrected oil prices were lower than the current $37 for nearly all of the period 1985 to 2004, 19 years.

I don't see why they can't be this low or lower for a couple years. The Saudis have 4 years of money in the bank if they don't tighten their rather posh belts.

In a more distant future where global oil demand is lower and falling (some has to be left in the ground, they say), I don't see why the price couldn't be here or lower for decades.

Pls define insane....

Inflation corrected oil prices were lower than the current $37 for nearly all of the period 1985 to 2004, 19 years.

I don't see why they can't be this low or lower for a couple years. The Saudis have 4 years of money in the bank if they don't tighten their rather posh belts.

In a more distant future where global oil demand is lower and falling (some has to be left in the ground, they say), I don't see why the price couldn't be here or lower for decades.

 

[woodgeek]

http://inflationdata.com/articles/charts/inflation-adjusted-oil-prices-chart/

Looks like the 1986-2004 average is around $32/bbl in current dollars.

http://www.eia.gov/forecasts/steo/realprices/

Looks like average HHO retail during 1986-2004 was about $1.60/gal in todays buckage, versus last weeks ave retail of $2.30

http://www.eia.gov/petroleum/heatingoilpropane/#itn-tabs-2

 

[Lake Girl]

Wish the lower prices per barrel would translate out at the pump ... Still over $1.00/litre locally. Manitoba was down to 84.9/litre a week ago. International Falls, MN $1.94/gallon.

This is taking it's toll on Alberta oil field workers ... suicide rates up 30%.