The Many Ramifications of the Great Oil Plunge of 2014 - GoMarcellusShale.com2024-03-29T12:59:58Zhttps://gomarcellusshale.com/forum/topics/the-many-ramifications-of-the-great-oil-plunge-of-2014?commentId=2274639%3AComment%3A648807&x=1&feed=yes&xn_auth=noI would invest in Chesapeake…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6488072014-12-20T03:31:07.171ZLERREThttps://gomarcellusshale.com/profile/LERRET
<p>I would invest in Chesapeake right after I bought stock in the Trans Cuban Airlines</p>
<p>The only way CHK would make money would be to have Anadarko take them over and pay a premium. It would be a worse purchase than Bank of America buying Countrywide.</p>
<p>Look for companies that have low leverage. The companies with debt are in real trouble, especially if funded by junk bonds...the notion that they are "hedged" on oil prices doesn't mean a thing if the hedge fund blows up. That…</p>
<p>I would invest in Chesapeake right after I bought stock in the Trans Cuban Airlines</p>
<p>The only way CHK would make money would be to have Anadarko take them over and pay a premium. It would be a worse purchase than Bank of America buying Countrywide.</p>
<p>Look for companies that have low leverage. The companies with debt are in real trouble, especially if funded by junk bonds...the notion that they are "hedged" on oil prices doesn't mean a thing if the hedge fund blows up. That happened in Tulsa in 2008 when an outfit went under betting the wrong way on oil.</p> The fall of oil prices, which…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6488062014-12-20T03:26:23.910ZLERREThttps://gomarcellusshale.com/profile/LERRET
<blockquote><p><a href="http://advisoranalyst.com/glablog/wp-content/uploads/HLIC/4723802c414c11ebeecf9859615d36a6.gif" rel="nofollow" target="_blank"><img class="align-full" src="http://advisoranalyst.com/glablog/wp-content/uploads/HLIC/4723802c414c11ebeecf9859615d36a6.gif"></img></a> The fall of oil prices, which is due to Saudi Arabia turning the valve full open and flooding the market with plentiful oil thus lowering the price of that commodity</p>
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<p>The only problem is that OPEC has not increased their production. They have been within a fairly narrow range for some time, and only…</p>
<blockquote><p><a href="http://advisoranalyst.com/glablog/wp-content/uploads/HLIC/4723802c414c11ebeecf9859615d36a6.gif" target="_blank" rel="nofollow"><img class="align-full" src="http://advisoranalyst.com/glablog/wp-content/uploads/HLIC/4723802c414c11ebeecf9859615d36a6.gif"/></a>The fall of oil prices, which is due to Saudi Arabia turning the valve full open and flooding the market with plentiful oil thus lowering the price of that commodity</p>
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<p>The only problem is that OPEC has not increased their production. They have been within a fairly narrow range for some time, and only picked up production when Libyan production collapsed after Khadafi fell.</p>
<p></p> Her reply was across the boar…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6490222014-12-20T03:22:50.143ZLERREThttps://gomarcellusshale.com/profile/LERRET
<blockquote><p>Her reply was across the board and strongly hinted that it would last for a couple of years. It is said that 20% of global junk bond issuance is energy related. Much more fallout to come.</p>
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<p>Spot on. This boom is a North American story. And the bubble (production bubble) does not exist outside this country. But the lack of demand from the U. S. is what is putting the pinch on OPEC members. No one else can pick up the slack. But shale oil is a rapidly…</p>
<blockquote><p>Her reply was across the board and strongly hinted that it would last for a couple of years. It is said that 20% of global junk bond issuance is energy related. Much more fallout to come.</p>
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<p>Spot on. This boom is a North American story. And the bubble (production bubble) does not exist outside this country. But the lack of demand from the U. S. is what is putting the pinch on OPEC members. No one else can pick up the slack. But shale oil is a rapidly depleting resource and within two years our production numbers will plunge.</p> They can make up for a drop…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6489412014-12-20T03:19:59.520ZLERREThttps://gomarcellusshale.com/profile/LERRET
<blockquote><p> They can make up for a drop in oil prices by maintaining prices upon other commodities</p>
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<p>Who is "they"? 90% of the explorers do not own refineries, nor pipelines, nor do they have any other income source beyond the wellhead.</p>
<blockquote><p> They can make up for a drop in oil prices by maintaining prices upon other commodities</p>
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<p>Who is "they"? 90% of the explorers do not own refineries, nor pipelines, nor do they have any other income source beyond the wellhead.</p> About 10% in the "WIN" days -…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6489042014-12-20T03:18:03.911ZLERREThttps://gomarcellusshale.com/profile/LERRET
<p>About 10% in the "WIN" days - that was under Pres. Ford. It got to 18% in 1980 when I purchased a mudlogging unit and financed it for 3 years.</p>
<p>About 10% in the "WIN" days - that was under Pres. Ford. It got to 18% in 1980 when I purchased a mudlogging unit and financed it for 3 years.</p> Over the decades the airlines…tag:gomarcellusshale.com,2014-12-20:2274639:Comment:6489012014-12-20T03:16:32.821ZLERREThttps://gomarcellusshale.com/profile/LERRET
<p>Over the decades the airlines have consistently been one of the worst investments unless you were a really good day trader and nimble.</p>
<p>Over the decades the airlines have consistently been one of the worst investments unless you were a really good day trader and nimble.</p> http://www.wsj.com/articles…tag:gomarcellusshale.com,2014-12-18:2274639:Comment:6484822014-12-18T13:20:14.244ZPhilip Brutzhttps://gomarcellusshale.com/profile/PhilipBrutz
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<div class="zonedModule"><div class="wsj-article-headline-wrap"><h1 class="wsj-article-headline"><strong><a href="http://www.wsj.com/articles/crude-oil-prices-inch-up-in-asian-trading-1418884276" target="_blank">http://www.wsj.com/articles/crude-oil-prices-inch-up-in-asian-trading-1418884276</a></strong></h1>
<h1 class="wsj-article-headline"><strong>Crude-Oil Prices Rally</strong></h1>
<h2 class="sub-head"><strong>Market May Be Looking to Find a Bottom After Recent…</strong></h2>
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<div class="zonedModule"><div class="wsj-article-headline-wrap"><h1 class="wsj-article-headline"><strong><a href="http://www.wsj.com/articles/crude-oil-prices-inch-up-in-asian-trading-1418884276" target="_blank">http://www.wsj.com/articles/crude-oil-prices-inch-up-in-asian-trading-1418884276</a></strong></h1>
<h1 class="wsj-article-headline"><strong>Crude-Oil Prices Rally</strong></h1>
<h2 class="sub-head"><strong>Market May Be Looking to Find a Bottom After Recent Falls</strong></h2>
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<div class="column col7 at16-col9 at16-offset1"><div class="module"><div class="zonedModule"><div id="wsj-article-wrap" class="article-wrap"><div class="is-lead-inset"><div class=" media-object header"><div class="media-object-image enlarge-image renoImageFormat-J img-header"><div class="image-container responsive-media loaded"><img src="http://si.wsj.net/public/resources/images/BN-GB799_naimi1_J_20141218065959.jpg" alt="Oil prices were boosted after comments from Saudi Arabia’s Oil Minister Ali al-Naimi, pictured at last month’s meeting of the Organization of the Petroleum Exporting Countries, that the recent price rout would be temporary." title="Oil prices were boosted after comments from Saudi Arabia’s Oil Minister Ali al-Naimi, pictured at..."/><span class="image-enlarge">ENLARGE</span></div>
<div class="wsj-article-caption">Oil prices were boosted after comments from Saudi Arabia’s Oil Minister Ali al-Naimi, pictured at last month’s meeting of the Organization of the Petroleum Exporting Countries, that the recent price rout would be temporary. <span class="wsj-article-credit">EUROPEAN PRESSPHOTO AGENCY</span></div>
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<div class="clearfix byline-wrap"><div class="byline"><span>By</span> <div class="author mobile-scrim hasMenu"><span class="name">GEORGI KANTCHEV</span></div>
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Updated Dec. 18, 2014 7:04 a.m. ET<br />
<div class="comments-count-container"><a class="comments_header" href="http://www.wsj.com/articles/crude-oil-prices-inch-up-in-asian-trading-1418884276#livefyre-comment" rel="nofollow">3 COMMENTS</a></div>
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<p>LONDON—Global oil prices rallied on Thursday as signs were emerging that the market might be looking to find a bottom.</p>
<p>Bulls received a boost after Saudi Arabia’s oil minister characterized the recent price rout as “temporary,” predicting that demand for the commodity will improve.</p>
<p>A selloff that started midsummer wiped off nearly half of crude’s value amid concerns of global oversupply coupled with lackluster demand.</p>
<p>On Thursday, Brent rose 2.5% to $62.77 on the ICE in London, following Wednesday’s gains when it snapped a five session losing streak. U.S. light sweet crude was up $1.30 to $57.76 in electronic trading on the New York Mercantile Exchange.</p>
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<p>Ali al-Naimi, Saudi Arabia’s oil minister and one of the world’s most influential oil brokers, said that as the economy improves, so will demand for crude. In an interview with the official Saudi Press Agency, Mr. al-Naimi reiterated his stance that the Organization of the Petroleum Exporting Countries won’t cut output and blamed the oil price volatility on speculators.</p>
<p>“The market has been looking for an excuse to rebound and his bullish comments were the perfect excuse,” said Tamas Varga, an analyst at PVM. “When al-Naimi speaks, the market listens.” </p>
<p>The rally helped drive stocks as well. Persian Gulf stocks, which tumbled into bear-market territory in the past few weeks, rebounded sharply Thursday, while European stocks and U.S. stock futures also climbed, helped by the <a href="http://www.wsj.com/articles/fed-sticks-to-patient-tack-on-rates-1418843005" target="_self" class="icon none">Federal Reserve’s message</a> a day earlier that it would be patient in deciding when next to raise interest rates.</p>
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<p>Analysts cautioned, however, that oil’s rebound, which started on Wednesday when both Brent and West Texas Intermediate <a href="http://www.wsj.com/articles/oil-prices-skid-on-russia-output-plan-1418784516" target="_self" class="icon none">shot up by more than 5%</a> at one point, wasn’t driven by fundamentals. Crude surplus is still building up in the physical market and is expected to persist well into the first half of 2015, which will have a bearish impact on prices.</p>
<p>Global energy companies have scrambled to adjust in the face of an uncertain outlook. Chevron became the latest big name to scale back, telling Canadian regulators Wednesday that it has “indefinitely” suspended plans to drill for oil in the Arctic.</p>
<p>Other companies including Marathon Oil, Husky Energy and Penn West Petroleum have pared their capital spending plans in recent days.</p>
<p>The U.S. Energy Information Administration said Wednesday that U.S. crude supplies fell by a less-than-expected 847,000 barrels last week. Analysts surveyed by The Wall Street Journal had forecast a loss of 1.9 million barrels.</p>
<p>“The fall since summer was overdone, too quick and too sharp, and traders might be looking to pick a bottom and gain some money out of it,” Mr. Varga said. “But this is a temporary relief, at best.”</p>
<p>News on Wednesday that <a href="http://www.wsj.com/articles/kurdish-officials-seek-to-reset-relations-with-baghdad-1418844030" target="_self" class="icon none">Iraq’s Kurdistan would increase its oil exports</a> next year also seemed to be overlooked by the market.</p>
<p>“Given that oil prices no longer reacted to this news by falling to new lows, short positions were doubtless covered,” Commerzbank said in a note to clients. “Nonetheless, we are skeptical about whether that means we have seen an end to the downslide in oil prices.”</p>
<p>Any recovery in oil prices is also capped by the strengthening dollar, which rose further on Wednesday on the Federal Reserve’s comments.</p>
<p>“A temporary relief might be around the corner, though it would be suicidal at this point to look for a long-term bottom,” Mr. Varga said.</p>
<p>Nymex reformulated gasoline blendstock for January—the benchmark gasoline contract—rose 3% to $1.61 a gallon, while ICE gas oil for January changed hands at $567 a metric ton, up $19 from Wednesday’s settlement.</p>
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<p>—Summer Said contributed to this article.</p>
<p><span>Write to </span>Georgi Kantchev at <a href="mailto:georgi.kantchev@wsj.com" target="_blank" class="icon">georgi.kantchev@wsj.com</a></p>
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</div> Demand is slowing. That is a…tag:gomarcellusshale.com,2014-12-18:2274639:Comment:6482912014-12-18T04:42:09.499ZDexter Greenhttps://gomarcellusshale.com/profile/DexterGreen
<p>Demand is slowing. That is a fact. And the Saudis are not increasing supply. They have instead chosen not to cut the supply for now. Their forecast for next year is ~300,000 bbl lower than previous estimates. There is clearly a slump in demand. OPEC nations can survive for maybe two quarters at this rate. This pattern will not hold. Supply will be cut and prices will stabilize. It's just a matter of who can make it to the other side with the least damage done. </p>
<p>Demand is slowing. That is a fact. And the Saudis are not increasing supply. They have instead chosen not to cut the supply for now. Their forecast for next year is ~300,000 bbl lower than previous estimates. There is clearly a slump in demand. OPEC nations can survive for maybe two quarters at this rate. This pattern will not hold. Supply will be cut and prices will stabilize. It's just a matter of who can make it to the other side with the least damage done. </p> lol Joe. Sleeping well...tha…tag:gomarcellusshale.com,2014-12-18:2274639:Comment:6483672014-12-18T02:18:54.209ZJim Litwinowiczhttps://gomarcellusshale.com/profile/JimLitwinowicz
<p>lol Joe. Sleeping well...thanks for your concern. Just wanted to point out that while most Americans are rejoicing the cheap gasoline, there are several issues that should attract concern. Oil fell way too far, way too fast.</p>
<p>And I ain't asking the gov to fix anything. But they need to be prepared to react when some of things I listed go wrong.</p>
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<p>lol Joe. Sleeping well...thanks for your concern. Just wanted to point out that while most Americans are rejoicing the cheap gasoline, there are several issues that should attract concern. Oil fell way too far, way too fast.</p>
<p>And I ain't asking the gov to fix anything. But they need to be prepared to react when some of things I listed go wrong.</p>
<p></p> The Saudis haven't increased…tag:gomarcellusshale.com,2014-12-18:2274639:Comment:6483642014-12-18T02:15:39.445ZJim Litwinowiczhttps://gomarcellusshale.com/profile/JimLitwinowicz
<p>The Saudis haven't increased production. Other countries, like the US, have. Demand is down slightly because of a slow down in China and a recession in Europe. They have refused to decrease production unless other countries do also, which they have refused to do. </p>
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<p>The question is why? Lots of possible answers like in the OP and perhaps more.</p>
<p>The Saudis haven't increased production. Other countries, like the US, have. Demand is down slightly because of a slow down in China and a recession in Europe. They have refused to decrease production unless other countries do also, which they have refused to do. </p>
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<p>The question is why? Lots of possible answers like in the OP and perhaps more.</p>