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Elite Veteran
Posts: 865
  
| When we are not at war with a lot of ground troops seems like oil drops |
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Elite Veteran
Posts: 865
| Of course dueche bag Obama (sorry!) will take credit for it all |
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Nut Case Expert
Posts: 9305
 
Location: Tulsa, Ok | The US currently has a good supply of domestically produced oil. The only issue is that it comes thru enhanced recovery which means that it is not cheap to produce. What that means that OPEC can no longer employ the tactic of cutting back production to decrease supply and drive the price back up. BUT what they can do is keep production high in an attempt to force US companies to stop drilling for and producing higher cost crude. Meanwhile they continue to pump oil does not require high cost methods of recovery. They figure they can withstand cheap oil prices longer than the US can.
Edited by SC Wrangler 2015-01-04 10:19 AM
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 Expert
Posts: 1857
| SC Wrangler - 2015-01-04 10:18 AM
The US currently has a good supply of domestically produced oil. The only issue is that it comes thru enhanced recovery which means that it is not cheap to produce. What that means that OPEC can no longer employ the tactic of cutting back production to decrease supply and drive the price back up. BUT what they can do is keep production high in an attempt to force US companies to stop drilling for and producing higher cost crude. Meanwhile they continue to pump oil does not require high cost methods of recovery. They figure they can withstand cheap oil prices longer than the US can.
That's correct, the US shale producers look into the longevity of a hole, most holes will produce for upwards of 10-15 years. The issue is that the US methods of extracting(hydraulic fracking) is more exspensive and when oil falls below $60 a barrel most companies can't afford to drill.(reality: CEO's aren't going to take a chance of not having that fat bonus at the end of the year and wil cut production to avoid losing it, they wouldn't lose any money to keep drilling they just wouldn't be making the profit margin they have become so accustomed to). Smaller companies are going to be bought out by these larger companies; bp, continental, etc., this is a good opportunity for those companies to monopolize US drilling, which I think is going to happen to some extent. |
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 Expert
Posts: 4121
Location: SE Louisiana | I live in a (small) oil town and I remember about 3 years ago word was going around the people searching out in the GoM had sounded some huge oil reserves in deep water and drilling rigs were being built. I'd say the harvest is coming in or will be soon. |
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 Wishing I were a Wildcat
Location: 'Hawk Country | FlyingJT - 2015-01-04 11:09 AM SC Wrangler - 2015-01-04 10:18 AM The US currently has a good supply of domestically produced oil. The only issue is that it comes thru enhanced recovery which means that it is not cheap to produce. What that means that OPEC can no longer employ the tactic of cutting back production to decrease supply and drive the price back up. BUT what they can do is keep production high in an attempt to force US companies to stop drilling for and producing higher cost crude. Meanwhile they continue to pump oil does not require high cost methods of recovery. They figure they can withstand cheap oil prices longer than the US can. That's correct, the US shale producers look into the longevity of a hole, most holes will produce for upwards of 10-15 years. The issue is that the US methods of extracting (hydraulic fracking ) is more exspensive and when oil falls below $60 a barrel most companies can't afford to drill. (reality: CEO's aren't going to take a chance of not having that fat bonus at the end of the year and wil cut production to avoid losing it, they wouldn't lose any money to keep drilling they just wouldn't be making the profit margin they have become so accustomed to ). Smaller companies are going to be bought out by these larger companies; bp, continental, etc., this is a good opportunity for those companies to monopolize US drilling, which I think is going to happen to some extent.
People around here are saying the oil industry drove prices down in the US to try and drive alternative energy out of business, then, without them as competition, drive the oil prices back up. Doing so, has now ticked off OPEC, which goes with what is being said above. |
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 Dancing in my Mind
Posts: 3062
Location: Eastern OH but my heart is in WV | missroselee - 2015-01-03 7:22 PM
Because we started using our own resources for oil....it forced the middle east to drop prices.
That's all there is to it. They are hoping to put everybody else out of business so they can go back to being the main producers of oil supply.
What she said. The middle East is NOT happy that we are producing. A lot of the gas & oil industries in America are young or up and coming. The middle east are billionaires, so they can afford to drop the prices with the hopes of shutting down American companies. I am living right in the middle of gas boom here in Ohio. The second largest gas processing plant in this country is 10 minutes from our home in one direction with another large one 10 minutes in the opposite direction. Both built within the last three years. Heck the one just started operating this past summer. So while the established middle east companies can drop the prices and take the hit, the American companies can not afford to do so yet. In the long run we will be paying for the low gas prices today.
Edited by Rolling J 2015-01-04 8:09 PM
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 Elite Veteran
Posts: 683
Location: Ohio | Anyone remember this? https://www.youtube.com/watch?v=_zfKrW0acWs |
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Elite Veteran
Posts: 683
Location: Ohio | http://www.usatoday.com/story/money/markets/2015/01/06/stocks-tuesd...
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 Accident Prone
Posts: 22277
Location: 100 miles from Nowhere, AR | Just read an article talking about how the oil companies were hedged on the market and making a lot of money off their short positions. (Sell high on futures, buy back low...all on paper, of course) |
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 Midget Lover
Location: Kentucky | $1.96 Sunday, $2.39 yesterday, $1.93 this morning. Bipolar gas prices. |
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 Do You Feel Lucky Punk?
Posts: 3156
Location: NM...the Land of Manana | Just saw on one of the politigab shows this weekend that one of the conditions Dems want to put on the Keystone pipeline is that all oil sent down it will stay in the US. |
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 Draw the Line
Posts: 1371
Location: Too Far North | Concerned? I Don't Know. I am concerned that American oil industry jobs will be seriously affected if the per barrel price continues to drop.
What I do know of the oil industry is only about the oil patch in the ND Bakken formation. The four core counties in the bakken are continuing to pump oil. Different wells have different break even points, some are as low as 27 and 42, some up to 54 and in the fringe counties some are as high as in the 70's for a break even. The fringe counties have already cut back production and are not exploring new wells at this time. So in some areas this is already affecting jobs and will continue to do so if the price continues to drop. Word on the street in the Bakken is the Saudi's can afford to play this game for around 1 year. Their economy is set right now on 80 dollars per barrel oil. That is not their break even point, that is very low, very very low. This is the price the Saudi economy needs to keep their social progams and economy running at the current rate. They can afford to undercut that price for around a year and subsidise it with money already in the bank. What happens after that ? idk. They want to break the Russian and American oil fields and keep a monopoly as they have had in the past. This isn't official news, just what I hear from those I talk to in the oil patch. Who knows if that is correct, maybe someone just starting rumors, but whatever.
We buy far more oil from Argentina than we do from Saudi BTW.
The Keystone oil pipeline is currently in it's 4th phase (that's the one that Obama is blocking) 3 phases have already gone through, carrying Canadian oil to refineries in the US and some is shipped out. It is VERY dirty oil tar sands oil, that is the reason it is being blocked by Obama and conservationist groups. It needs a lot more refining and burns dirtier, creating more pollution. |
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Miracle in the Making
Posts: 4013
| i still say 1 bushel wheat or corn or soybean=1 barrel crude no problem |
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 Ace Ventura Pet Detective
Posts: 2409
Location: Wisconsin | I wont be concerned unless it jumps back up to almost 5 dollars a gallon before i leave to drop horses in Texas end of the month!!
Edited by nettieb3 2015-01-08 9:37 PM
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Folks on-line