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OIL Forum Topics
- All Comments on OIL
- General Discussion on OIL
- Whither Oil Prices? [view article]
- Stronger Dollar Pushes Down Oil and Gold? [view article]
- Options Trader: Friday Outlook [view article]
- Charlie Maxwell to Barron's: $300 Oil is Inevitable [view article]
- A New Dynamic for Middle Eastern Oil [view article]
- Should We Listen to Boone Pickens on Oil? [view article]
- Toyota's View of the Future [view article]
- Winter Heating Oil, Nat. Gas and Crude Oil Preview [view article]
- Theoretical Declines of a Bursting Oil Bubble [view article]
- T. Boone Pickens on Yahoo and the Price of Oil [view article]
- Financial Roundtable: Four Stocks To Buy Now [view article]
- We Can Lower Gas Prices Now If We Drill, Drill, Drill [view article]
loading ...Recent OIL Articles
- Charlie Maxwell to Barron's: $300 Oil is Inevitable
- Stronger Dollar Pushes Down Oil and Gold?
- Whither Oil Prices?
- Toyota's View of the Future
- Options Trader: Friday Outlook
- Energy Inventories (9/4/08)
- Theoretical Declines of a Bursting Oil Bubble
- Should We Listen to Boone Pickens on Oil?
- Options Trader: Wednesday Outlook
- Winter Heating Oil, Nat. Gas and Crude Oil Preview
- Full List of Articles »
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Whither Oil Prices? [view article]
gigem77 --the TOT and PBR figures you cite sound like pretty good floor numbers on oil prices (excluding any temporary spike down that could, but probably will not occur). the major oil companies will not provide the market with oil below their replacement cost, and those with low costs in OPEC have no current incentive to take it lower. the long-term forces are up.
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Whither Oil Prices? [view article]
TOTAL Ceo de Margerie said last week (June 2008) that to replace reserves now will cost a minimum of $80 per barrel.The PBR costs that Karl uses are a minimum base price of 30/barrel, not a maximum and not the total cost. Also, the figures are estimates from a year ago. Time is money. For example steel costs are up 80% this year.
Peter Robertson, vice chairman of Chevron, recently told lawmakers that the cost of new production in the deep water Gulf of Mexico could exceed $95 a barrel.
Reply
Stronger Dollar Pushes Down Oil and Gold? [view article]
2005 is an excellent example that gold can rise whether rates are being increased or decreased. And, with the bailout of fanny and freddie this weekend, I think gold is going to resume its bull market regardless of the direction of the dollar. ReplyWhither Oil Prices? [view article]
The costs of deep water production are overstated.Finding costs are on a downward learning curve.
Petrobras, the leader in deep water drilling and production, calculates with lifting costs of $8/barrel and total costs of a maximum of $30/barrel, once a deep water field is developed. Deep water oil reserves are enormous and will determine the marginal costs of light crude oil production in the next 15 to 20 years Reply
Stronger Dollar Pushes Down Oil and Gold? [view article]
Isn't the demand for oil considered inelastic? People can cut consumption to a point, but no matter what it is still a necessity. Thus even if the dollar rises there is a limit to how far oil consumption can be cut back. The other issue is supply and demand. Is that not the ultimate regulator of price (provided it is not artifically controlled)? ReplyOptions Trader: Friday Outlook [view article]
Doomsayers always seem to know best: everything will go to pot, I'm prepared, and you are not. I know and you don't.Since I can't prove the universal negative, that the world will be OK, therefore I must be wrong. Tough crowd. Reply
Charlie Maxwell to Barron's: $300 Oil is Inevitable [view article]
If doomsayer comments are meant for people and government to act up on our energy policy, great. On the other hand, it could be only for people to draw attention to themselves, specially those with a big ego. Who is going to hold this prediction accountable in the next few years? I can say it too: oil will be at $1,200 in 2022. Whatever. My point: senseless, if it's just to draw media attention.Reply
Whither Oil Prices? [view article]
opec can prevent the price of oil from falling, by cutting production. They cant prevent a rise in oil price by raising production. That has already been demonstrated... ReplyWhither Oil Prices? [view article]
$70 dollar oil without corresponeding decrease in drilling costs could be a problem. However, Rex Tillerson, of XOM clearly believes that 1 billion plus barrel finds and an enevitable rise in oil, due to a lower cost, which makes consumption grow again is feasible even if costs outstrip economic benefit for a few years.Gives every investor pause to calculate flowing barrel costs, recycle ratios and reserve life for their current holdings. Very Interesting article. Need more like it. Reply
Whither Oil Prices? [view article]
The $70 ppb support from fundamentals is very interesting in the light of strong technical support around $70. ReplyWhither Oil Prices? [view article]
very interesting comments ,price of production a barrel of oil is a small factor it seems to me. Politics,unstable parts of the world,wheather,collusion,fear of running out etc...seem to dictate the price of oil. I just
started to buy 100 shares of CVX with the intention to buy 100 more every time the price of CVX goes down 5 $. Nice dividend while waiting
because you know that something is going to happen in our world
today,tomorrow,next week....? FEAR is more important for the price of oil than all those numbers written here,
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Whither Oil Prices? [view article]
Yes, OPEC has high control over prices until and unless there are sufficient alternatives to break their grip. At some price level the "demand destruction" effect begins to cap their capacity to raise prices, and to stimulate strong moves to alternatives.The $80 to $100 floor level has been a discussion point by Iran recently. For example, the French new service AFP printed this article today:
"Iran wants OPEC output cut to target quotas
3 hours ago
TEHRAN (AFP) — Iran said on Sunday that OPEC members should cut output to the agreed target quotas in the face of falling oil prices, two days before the cartel meets in Vienna, state-run IRNA news agency reported.
"The market does not need more oil and there is no need for excess production given the fall of oil prices," Iran's envoy to the Organisation of Petroleum Exporting Countries, Mohammad Ali Khatibi told IRNA.
"Members should return to the agreed quota and respect it. If a member does not want to go back to the OPEC quota they should have a reason," he added.
"The situation of demand and supply for oil in the world and the global economy indicates a weakening of demand," Khatibi said.
Iran is the second largest exporter in the OPEC, which supplies 40 percent of the world's oil. Crude oil, which hit a record high of 147 dollars on July 11, has lost over 40 dollars in less than two months.
Khatibi said that "reasonable" crude prices could not go lower than 80 dollars a barrel.
"International oil companies say that producing a barrel of crude in some new fields costs 80 dollars so the oil prices cannot be lower than this considering a reasonable profit for production," Khatibi said.
Iran's oil minister Gholam Hossein Nozari on Tuesday called on OPEC to discuss quota-busting in its September 9 meeting and said that 100 dollars a barrel was "a minimum" for oil prices."
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Whither Oil Prices? [view article]
I agree that (1) the marginal cost of production (which is probably $70-$80/barrell) will set the floor, unless (2) OPEC chooses a different setpoint.My guess is that OPEC will NOT want oil lower than $100, which means that oil might overshoot to maybe $90, but not much lower.
OPEC can achieve whatever price it wants by cutting the proper amount of production from global supply.
Jack Yetiv Reply
A New Dynamic for Middle Eastern Oil [view article]
The only security is getting OUT of the middle-east and its byzantine politics. With plug-in electric cars and rooftop solar power, we can be independent of mideast oil and still maintain our mobile lifestyle.The money NOT spent on gasoline pays for your solar panels; all that's needed is to ALLOW people to buy plug-in cars. Reply
Whither Oil Prices? [view article]
The data you use from DOE and the finding costs chart stop at 2006. That data is very much out of date. For example, the cost of deepwater drilling rigs has risen by more than 100k per day since the end of '06. Similar price increases have hit steel tubing and other supplies needed to drill.Speculators who put on the large long positions in crude into June are either gone or short. The short position in natural gas is the largest in many years now. That is bullish for price and gives some clues that you are missing completely. Speculation pushed price to $147 at the maximum long position. Now that position is completely unwound and a huge short position is in place. But the price of crude is still above $100 and natgas is still above 7. That suggests an equilibrium point for crude well above the $105 price we hit Friday and this is one of the quarters of weakest demand.
There is little or no spare capacity in the world oil market so the price is set at the margin, not at some average. The most expensive barrels set the world price. The cost of production is well north of 85 dollars now.
Saudi production dropped 100k bpd last month. Watch what they do, as well as what they say. OPEC meets Tuesday and IKE will be in the Gulf tracking northwest.
So far, Gustav has removed more than 5 million barrels of oil and over 40 billion cubic feet of natgas from production. Ike will keep the rig crews ashore for another week at least. The lost production figures will at least double and will make a significant impact on inventories. It takes 5-10 days to get the wells back on line at full production and they don't all come back to pre-Gustav levels. It's not a zero sum game, some wells don't come all the way back. The production that was lost isn't "made up" until the end of the well life.
Gasoline and distillate inventories are low and the highest demand quarter for petroleum products is approaching.
The price of crude will be over $140 in December. Reply