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Pensacola Discussion Forum » Politics » Oil prices dive below $37 to lowest level in seven years

Oil prices dive below $37 to lowest level in seven years

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boards of FL

boards of FL

http://money.cnn.com/2015/12/08/investing/oil-prices-below-37/index.html


Oil fell another 2% on Tuesday and collapsed below $37 a barrel for the first time since the depths of the Great Recession in February 2009.

A massive supply glut has wiped out two-thirds of oil's value after it peaked at nearly $108 a barrel in June 2014.

The latest oil plunge is rocking the stock market, with shares of Big Oil companies like ExxonMobil (XOM) and Chevron (CVX) retreating further in recent days. The Dow fell more than 125 points in morning trading, with the slumping energy sector leading the way lower.

Oil fell as low as $36.64 on Tuesday after settling at $37.65 on Monday.
"My head is spinning from the past few days of declines. Sentiment is horrible. It's very bearish," said Mike Wittner, global head of oil research at Societe Generale.

These moves come after last week's decision by OPEC not to cut oil output following a contentious six-hour meeting. The oil cartel essentially left production near record highs despite the oversupply problem.

OPEC is gripped by a deep divide between two factions, one led by the top oil producing nation Saudi Arabia and its rich allies in the Gulf that can stomach cheap oil and another led by Nigeria, Venezuela and other countries that need higher prices to boost their economies.

But with Saudi Arabia firmly in control of decision making, a near-term oil recovery doesn't seem likely.

Oil's crash began last year as the American shale oil boom flooded the market with excess supply. Inventories of oil have swelled to a record of nearly 3 billion barrels, according to the International Energy Agency.

Rather than cut supply to boost prices, OPEC has been aggressively pumping oil in an effort to steal back market share.

U.S. production remains near record-highs, though it has backed off in recent months.

Oil prices haven't been helped by the so-so economic environment around the world. The U.S. economy is enjoying just a modest recovery from the Great Recession and many other parts of the world -- especially China -- are slowing down.

All of this is great news for American drivers. Gasoline prices could soon tumble below $2 a gallon for the first time since 2009. The average gallon of gas is currently fetching $2.03, down from $2.68 a year ago, according to AAA.


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Hospital Bob

Hospital Bob

I tell you what,  I haven't always been the biggest fan of President Obama,  but now that he's made the price of oil go so low,  I'd put him in for a third term if I could.

Guest


Guest

Except that obama would prefer prohibitively high fossil fuels... necessarily skyrocketing. Prepare for tax increases.

boards of FL

boards of FL

PkrBum wrote:Except that obama would prefer prohibitively high fossil fuels... necessarily skyrocketing. Prepare for tax increases.


You can't even clarify your own speech, much less forecast anything into the future.

Seriously, PkrBum.  Do everyone a favor.


Oil prices dive below $37 to lowest level in seven years ZOXKEiv


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ZVUGKTUBM

ZVUGKTUBM

Enjoy it while it lasts. It's killing people who are invested in oil (like me). But, they say that the cure for low oil prices is 'low oil prices'. Eventually, the Saudis will feel real pain from their loss of revenue, and will slow the oil glut and the price will rebound.

http://www.best-electric-barbecue-grills.com

gatorfan



ZVUGKTUBM wrote:Enjoy it while it lasts. It's killing people who are invested in oil (like me). But, they say that the cure for low oil prices is 'low oil prices'. Eventually, the Saudis will feel real pain from their loss of revenue, and will slow the oil glut and the price will rebound.

This is a considered Saudi strategy. They are a "low-cost" oil producer and are willing to sell lower to protect market share. Since they broke with OPEC over production targets it seems their real aim might be to eliminate higher cost producers (shale, etc.)

ZVUGKTUBM

ZVUGKTUBM

gatorfan wrote:...it seems their real aim might be to eliminate higher cost producers (shale, etc.)

Precisely their strategy. It has kind of backfired on them as some U.S. shale producers have gotten very lean by learning how to lower costs. Others have either declared bankruptcy or simply stopped producing until the price goes back up.

What is interesting is that Saudi Arabia is going to swing into the sunset as a major oil producer by around 2030. They have been lying for years about their actual reserves.

http://www.best-electric-barbecue-grills.com

Hospital Bob

Hospital Bob

ZVUGKTUBM wrote:
 It has kind of backfired on them as some U.S. shale producers have gotten very lean by learning how to lower costs.

Exactly which U.S. shale producers can make a profit at $38/barrel?


Markle

Markle

ZVUGKTUBM wrote:Enjoy it while it lasts. It's killing people who are invested in oil (like me). But, they say that the cure for low oil prices is 'low oil prices'. Eventually, the Saudis will feel real pain from their loss of revenue, and will slow the oil glut and the price will rebound.

Mine was down $0.66 a share today but I bought it recently and am in it for at least a year.

Hospital Bob

Hospital Bob

Oil prices dive below $37 to lowest level in seven years Oil10

ZVUGKTUBM

ZVUGKTUBM

Bob wrote:
ZVUGKTUBM wrote:
 It has kind of backfired on them as some U.S. shale producers have gotten very lean by learning how to lower costs.

Exactly which U.S. shale producers can make a profit at $38/barrel?

I am not saying they are profitable, and their share-prices show it for all of them. They are somehow holding on. The survivors have lowered costs so they can compete. They use new drilling techniques, such as multi-well pad drilling, etc. In pad-drilling, they set up one well pad, and drill multiple horizontal wells down through the most promising areas of the targeted formations, with the wells snaking off in every direction. The rig is mounted on hydraulic feet, and after completing one well, it "walks" several feet to a new drilling location, and keeps repeating the process. When they are ready to frack them, they do it all at once, with one set of equipment. Energy producers who use techniques like this save millions of $$ in drilling costs.

But, producers are hurting everywhere. It is "who will blink first" and shut down production. The Saudis want to shut down U.S. shale to preserve their market share. Flooding the market with cheaper to produce Saudi oil is causing the King to burn through his cash reserves, and when that dries-up, he will finally blink, and ease the glut to get the price back up.

http://www.best-electric-barbecue-grills.com

Hospital Bob

Hospital Bob

Oil-producing states clobbered by fall in price of crude
nearly 90 cents of every dollar of Alaska's operating revenue comes from the oil industry.

http://www.cnbc.com/2015/12/08/oil-producing-states-clobbered-by-fall-in-price-of-crude.html

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