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OIL, Discussion
eshmun
post Posted: Apr 23 2015, 02:35 PM
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In Reply To: flower's post @ Apr 22 2015, 11:35 PM

Eads said in an interview. "If you look around the world, where's the deliverability going to come from?

Jeez, this guy has spent too long with his head buried in the sand making deals in the US shale oil patch, if he can't answer this question.

Answer: The Arabs.

Eshmun




 
flower
post Posted: Apr 22 2015, 11:35 PM
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From Bloomberg tonight:
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As the oil patch grows accustomed to a new world of $50 to $60 crude, it's now looking ahead to a different but equally daunting sort of cliff.Oil companies are warning there will be a price to pay -- a much higher price -- for all the cost cutting being done today to cope with the collapse in the crude market. Big projects intended to start pumping oil and natural gas 5 to 10 years from now are being canceled or put on hold as the price crash forced $114 billion in spending cuts on the industry.

Energy giants from Exxon Mobil Corp. to Royal Dutch Shell say they're taking a much more cautious approach to approving projects that cost billions and take years to complete. That's setting the table for a future oil-price shock when a growing world population drives higher demand, said oil executives and financiers at the IHS CeraWeek Energy Conference in Houston.

"What we decide today will have an effect on the future," Patrick Pouyanne, chief executive officer of Total SA said Tuesday during the event. Postponing spending on mega-projects that usually deliver significant quantities of oil or gas "will have an impact. This could affect supply in three or four years."

Demand has already begun to show signs of strength. The Paris-based International Energy Agency last week raised its forecast for 2015 demand, projecting that the world will consume 94.7 million barrels a day of crude in the fourth quarter, a potential increase of almost 1 million barrels over the same period in 2014.


Shale Output
U.S. output in shale formations is expected to fall as soon as next month, according to the U.S. Energy Information Administration. Oil production decreases due to spending cuts and decline from aging fields, combined with demand growth, are likely to push prices higher in the next six months to two years, said Ralph Eads, vice chairman and global head of energy investment banking at Jefferies Group Inc.

"I don't see how the market isn't going to be in an undersupplied position," Eads said in an interview. "If you look around the world, where's the deliverability going to come from? That's the head scratcher. You just don't know. It's hard to make the math add up."

Eads, who as a deal-maker helped give rise to the shale age, is among many in the industry who have begun to point to a growing risk of diminishing spare capacity, the amount by which existing wells can increase global output if pumped at full speed.


Meeting Disruptions
It's a closely watched figure in oil markets because it represents how much supply can be turned up to meet disruptions or demand increases. Continued Saudi production increases may "significantly" reduce spare capacity "at a time when oil markets will be tighter and geopolitical risks to supply are growing," Pira Energy Group wrote April 14.

Not everyone is anticipating higher prices soon. BP Plc CEO Bob Dudley and Exxon Chairman and CEO Rex Tillerson said Tuesday that they see oil staying lower for years into the future. Dudley said "lower for longer" has become the company's mantra.

Elsewhere, crude traders and hedge funds are beginning to see oil turn a corner. Prices can't drop below $50 for sustained periods because that's below the cost of supply, Ian Taylor, the CEO of Vitol Group, the world's largest independent crude trader, said in an interview at the FT Commodities Global Summit in Lausanne, Switzerland on Tuesday. Andy Hall, CEO of commodities hedge fund Astenbeck Capital Management LLC, has also told investors that prices can't stay low for long.

http://www.bloomberg.com/news/articles/201...r-spending-cuts



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Combining Fundamental comments with Fundamental charts.
 
triage
post Posted: Apr 17 2015, 08:03 AM
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Here's a graphic from Bloomberg via Barry Ritholtz's blogsite that gives one take on the argument that Saudi Arabia wilfully crashed the oil price to hurt the US oil shale sector in particular, as it being seen as a long-term threat to higher prices, and to the US in general, as a payback for the US becoming less hostile towards Iran.

http://www.ritholtz.com/blog/2015/04/cheap...ers-and-losers/

It would seem from these figures that the US, western Europe and the likes of China and Japan have effectively received a huge financial bail-out courtesy of the wahhabists, whilst the Russians, fellow arabs, africans and south americans are all collateral damage (if you accept that it was the Americans that were the primary target for the Saudi action). I suspect that things in the first world would be a whole lot worse off but for the collapse of the oil price.

The perfection of the fracking techniques and the consequent development of the shale gas and oil provinces in the US actually provide the Americans with a natural hedging arrangement: when oil prices are depressed the US economy as a whole benefits even as their oil sector gets compressed but when oil prices climb higher then all the junior oil and gas operators which are a feature of the US shale sector can come out of hibernation to cushion the effects of those higher oil prices.



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle

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Mags
post Posted: Apr 16 2015, 11:37 AM
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In Reply To: flower's post @ Apr 16 2015, 10:32 AM

I also wonder what the outlook for oil is: Funny times all around us.

 
flower
post Posted: Apr 16 2015, 10:32 AM
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In Reply To: Carsha's post @ Apr 15 2015, 07:36 AM

QUOTE
Crude Oils large decline over the past 8 months took it down to its Fibonacce 23% retracement level and a support line at the same time. The large decline has driven monthly momentum down to levels not seen since the late 1990's.


The bounce in WTI over the last ten weeks has been pronounced, being up around 32%, this fact seems to have been ignored as gloom and doom spreads over the oil patch, and as US shale oil production is being cut back.

Could WTI in fact now be bottoming?

Is it once again time to have a look at some ASX oilers?

Daily Chart of WTI enclosed.
Attached thumbnail(s)
Attached Image


 




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Combining Fundamental comments with Fundamental charts.
 
Carsha
post Posted: Apr 15 2015, 07:36 AM
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In Reply To: Carsha's post @ Apr 2 2015, 09:43 AM

This chart looks at Crude Oil over the past couple of decades, on a monthly basis.

Crude Oils large decline over the past 8 months took it down to its Fibonacce 23% retracement level and a support line at the same time. The large decline has driven monthly momentum down to levels not seen since the late 1990ís.

 


Carsha
post Posted: Apr 2 2015, 09:43 AM
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In Reply To: early birds's post @ Apr 2 2015, 09:27 AM

I do know that Carl Icahn has increased his stake in Chesapeake Energy (NYSE:CHK)recently.
Carl Icahn is one smooth operator so see this as a positive for longer term gas/oil prices.
Also the CEO of Chesapeake has been buying.
Considering a buy CHK as chart bottoming.

On our exchange really not up to date on which is the best..


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early birds
post Posted: Apr 2 2015, 09:27 AM
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In Reply To: Carsha's post @ Apr 2 2015, 08:50 AM

Oil advanced the most in two months in New York after a government report showed that US crude output dropped from the highest level in more than three decades.

Production dropped 36,000 barrels a day to 9.39 million last week, the first decline since January, according to the Energy Information Administration. That's down from 9.42 million on March 20, the most in weekly estimates that started in January 1983.

Drillers cut the number of active rigs seeking oil in the US last week to the fewest since March 2011. Iran and world powers pressed ahead with talks for an outline agreement to end the 12-year standoff over the nation's nuclear program, with diplomats saying major obstacles must be overcome before any announcement. Oil capped the longest run of quarterly declines since 2003 on Tuesday, amid speculation Iranian supplies will add to a global glut.

"There's been a significant drop in the rig count and it's starting to be reflected in the data," Rob Thummel, portfolio manager at Tortoise Capital Advisors in Kansas, said. "There's no doubt that thepace of US oil production is going to slow."

West Texas Intermediate for May delivery rose $US2.49, or 5.2 per cent, to close at $US50.09 a barrel on the New York Mercantile Exchange. It was the biggest gain since February 3.

Brent for May settlement climbed $US1.99, or 3.6 per cent, to end the session at $US57.10 a barrel on the London-based ICE Futures Europe exchange.

US crude production has surged as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies from shale formations in the central US.

"The drop in production will continue because of the decrease in drilling activity," Chip Hodge, senior managing director at John Hancock in Boston, said. "These shale wells have steep decline rates and the drilling rate isn't high enough to maintain output going ahead."

"The market really wants to believe this is the start of a sustained drop in production," Rob Haworth, a senior investment strategist in Seattle at US Bank Wealth Management, said. "I don't see it, though, and think we'll continue to see supplies build."
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CS, i kinda think oil might see the short term bottom, apart from NG is there anything likes of stocks to trade for the long side???



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Carsha
post Posted: Apr 2 2015, 08:50 AM
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Oil price to increase by 50%?

Chart


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apache123
post Posted: Apr 1 2015, 02:59 PM
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Oil price is on a knifes edge pending any outcome from the Iranian negotiations. blink.gif

The deadline has passed and they have gone into extended time.

Seems like there are still some sticking points so it could go either way.



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