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"It's A Huge Crisis" - The UK Oil Industry Is "Close To Collapse"
It seems like only yesterday when back on October 11, we first explained - and previewed - the collapse of oil courtesy of the secret deal between the US and Saudi Arabia. However, it seems like only this morning when we subsequently wrote that "If The Oil Plunge Continues, "Now May Be A Time To Panic" For US Shale Companies." In retrospect, it was, and with the price of crude far below mid-October levels, the pain for both Russia and shale is now quite unbearable (even as Saudi Arabia explained earlier today that the reason for collapsing oil has nothing to do with supply and everything to do with plunging demand, and after seeing this chart we believe it).
All of this was perfectly obvious months ago to anyone who cared. To wit:
... while we understand if Saudi Arabia is employing a dumping strategy to punish the Kremlin as per the "deal" with Obama's White House, very soon there will be a very vocal, very insolvent and very domestic shale community demanding answers from the Obama administration, as once again the "costs" meant to punish Russia end up crippling the only truly viable industry under the current presidency.
So with great delight we present the latest blowback from Obama's "brilliant" strategy to cripple Putin: in addition to the default wave about to crush America's own shale industry, America's biggest foreign ally and military partner when it comes to "ideologically pure missions of liberation" - the UK, and specifically its North Sea oil industry which according to the BBC is in a "crisis" and according to Robin Allan, chairman of the independent explorers' association Brindex, the industry was "close to collapse".

The story is the same as in the shale patch, only in the far colder and stormier North Sea: "Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims. 'Everyone is retreating'"
"It's almost impossible to make money at these oil prices", Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. "It's a huge crisis. This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that's painful for our staff, painful for companies and painful for the country."
"It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone."
And to think it was just yesterday that the WSJ telling anyone who believes propaganda that "Christmas has come early for British consumers.
Tumbling oil prices, rising wages and declining borrowing costs are lifting households’ spending power, sending a powerful signal that consumers are set to keep Britain’s economy growing in the New Year.
BOE officials in December concluded the decline in the oil price in particular should act as a mini-stimulus for the U.K. and its major trading partners, even as Russia and other energy producers reel from crude’s recent slide. The BOE estimates the oil price has fallen 35% in sterling terms since June.
Which once again shows that when it comes to being utterly clueless about the real world, central bankers truly have no peers. Well, side from their media cheerleaders of course.
But hold on: wasn't only Putin supposed to be getting crushed as a result of the oil collapse? Suddenly the "secret" Saudi agreement isn't looking all that hot.
As for the truly "best" news: the collapse in the oil field will remain hidden from official government data. Mr Allan said many of the job cuts across the industry would not have been publicly announced. Oil workers are often employed as contractors, which are easier for employers to cut.
His remarks echo comments made by the veteran oil man and government adviser Sir Ian Wood, who last week predicted a wave of job losses in the North Sea over the next 18 months.
BOE bullshit aside, this is what is really going to happen:
The US-based oil giant ConocoPhillips is cutting 230 out of 1,650 jobs in the UK. This month it announced a 20% reduction in its worldwide capital expenditure budget, in response to falling oil prices.
Other big oil firms are expected to make similar cuts to their drilling and exploration budgets. Research from the investment bank Goldman Sachs predicted that they would need to cut capital expenditure by 30% to restore their profitability at current prices.
Service providers to the industry have also been hit. Texas-based oilfield services company Schlumberger cut back its UK-based fleet of geological survey ships in December, taking an $800m loss and cutting an unspecified number of jobs.
On Wednesday Aberdeen-based Wood Group announced a pay freeze for staff, and cut rates for its contractors.
Apache, one of the North Sea's biggest producers, has followed suit and will impose a 10 percent reduction on its contractors' wages from January 1st.
So what happens to the UK oil and energy industry? "The industry was hoping to see continued high levels of investment, stemming the inevitable decline of production as North Sea's resources are used up. But falling oil prices have put that in doubt."
However, the Department of Energy and Climate Change said: "The recent sharp reductions in oil prices are very challenging for companies active in the North Sea. We have seen very little evidence of new projects being cancelled or deferred in reaction to lower oil prices."
Which means the real pain is only just starting, first in the UK and soon everywhere else.
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If they just invest everything into US index funds they'll be fine.
Without even the common courtesy of a reach around.
"we laid off some blokes..."
lawyers guns money printing machines
http://y2u.be/VI6tBwVjyOY
I was expecting Warren Z, not vegan recipes! What the hell, man?!? Here's Warren:
https://www.youtube.com/watch?v=lP5Xv7QqXiM
Once all these companies go bankrupt, I'm sure the. 'Werewolves of London' will be happy to scoop them up at pennies on the dollar....
RIP Warren. Thanks for the link. I always appreciate a little 'Black Friday' from Steely Dan after a crazy Thursday.
Enjoy.
https://www.youtube.com/watch?v=q1ZV4Mx7tw8
Music Thread!
https://www.youtube.com/watch?v=3mbBbFH9fAg
This is just part of the price the brits pay for sucking american dick. At least oil is now cheap enough to substitute for mouthwash.
Party pooper ;-)
https://www.youtube.com/watch?v=LjPlhb4f9P8
We crippled some folks.
Still Alive & Well...
https://www.youtube.com/watch?v=QdB3msFJWyM
You can keep your oil
from the front line- 9 rigs stacked haliburton, 4 from companyman(concoco).
no new drillg permit whatsoever at ND reg. shutdown underway...
fucking fucked by fuckers fucking over fuckers...
lumps of coal for all dos oily rufneks.
fuckin fucked up mon...
"UK" oil industry? well...they mean the Scottish Oil Industry. What Scotland shoulda done was...and I gotta laugh/cry at this..."voted" for their "independence"...and they could control their own oil industry without having to subsidize the scumbag Brit leeches.
WHO THE FUCK DOESN'T VOTE FOR FREEDOM???????????? WHAT THE FUCK???????????? DIDN'T SCOTLAND SEE BRAVEHEART????? LOL
Eh Well, We Have A Slight Problem Folks...
.
We Blewback some Folks.
North Sea crude is some of the most expensive on the planet due to produciton costs, mainly because of UK regulations... Not to mention that the North Sea is just about played out... The UK oil industry was fucked before, now it's dead...
welcome to the reel world, a world where you do not work to " make money " you work to eat.
"elites" gonna have serious aclimating issue within years :)
funny.
Hard to know where to start with so much material on offer, but, basically, Braveheart was bollocks and please shut up as you plainly haven't a clue.
Better together, eh?
Scots are sheep. Just like everyone else.
"The recent sharp reductions in oil prices are very challenging for companies active in the North Sea."
Lol let me get out of the world’s smallest violin…
Yeah, it's a sad story.
Seems that if they wanted the price to be $100, then if a couple of big players sold only for $100, then that is pretty much what it would be. Russia, Saudi, and the USA produce 38% of the world's oil. They know what their costs are. They could just set a minimum price, and buyers pay it or not, like GM or Toyota sets the price of their cars. Maybe other producers would charge $95, but the rest of the producers don't produce enough, so the world would have to pay the price.
At 14%, 13%, and 12% any one of the big three could set the price. Maybe others would undercut them, but demand is such that all three are needed to meet world demand.
So, of course, it's manipulated. It's all BS.
Hmmm, Russia and USA/UK are getting really hurt. Saudi doesn't seem to care.
Same with gold and silver. Big producers could set the price, "pay the price or don't buy". And don't say it's price fixing. the Comex is price fixing. Any business can set a price for their product. At some point demand would pay the price.
Gold demand is inherently flexible ... silver has alternatives which can be brought online a lot faster than alternatives to fossil oil, trying to force the price higher can have unintended consequences.
Saudi doesn't have all the social welfare and big government that UK and US do.
You really are an ass... I mean, really...
Not any more...
From Obama's viewpoint, this must be win-win. Not only does he put the screws to Putin and Russia, but he also gets to screw the US shale industry and American energy independence in general. He never did seem to like the idea that shale oil could greatly help the US economy. This looks like just another successful effort on his part to do exactly the wrong thing for the country he's leading (into a ditch).
Sooner or later, someone's going to push back.
Not to worry, the Republicans will turn this ship around.
Are there really so many people in the US who still think there is even a remote difference between these two parties?
That Obama is any worse than that dick head before him and will have been worse than the dick head after him.
Moar songy goodness :) This one seems to fit. The The - Armegeddon Days Are here Again.
https://www.youtube.com/watch?v=oi1aH8WqZmY
The Battle of Evermore ;-)
https://www.youtube.com/watch?v=-21AtiWV3TE
If it keeps on rainin' ($$$), Levee is gonna to break
If it keeps on rainin' ($$$), Levee is gonna to break
When the Levee breaks, I'll have no place to stay :)
Harry Stamper kept it short and sweet.....
FORE !!!!!!
No golf balls though. More like a huge septic tank blowing up in the sky.
I don't predict very often but this Obama oil/ gas checkers game is gonna backfire. I'll be holding my umbrella smiling.
Last of the music but again it applies.
Morphine - Scratch.
I was once sitting on top of the world
I really had things in my hand
But something went wrong I'm not sure what
And now I'm sitting here at home alone
People they want to give you free advice
Well that's something that I always try
But you get what you pay for that's what I say
And now I'm paying and paying and paying
I lost everything I had
I'm starting over from scratch
https://www.youtube.com/watch?v=3GnHI60T6cA
Fuck the machine.
Indeed, fuck the machine, it is worldwide now, despite what everyone wants to believe:
"Finally, this bailout fails to answer the question it was supposed to address. Investors do not know whether the Rosneft bailout is a one-off deal and, if it is not, which companies can hope to receive similar treatment from the Central Bank. Thus they do not understand how (and whether) Russian corporate debt will be repaid or refinanced — or how much trust they can place in the ruble."
http://www.themoscowtimes.com/opinion/article/even-russians-are-running-from-the-ruble/513599.html
Welcome, to the machine ;-)
https://www.youtube.com/watch?v=L5jRewnxSBY
Music! How about world history set to music?
Roger Waters, Amused to Death (full CD)
https://www.youtube.com/playlist?list=PL46843EE9B1C3250E
Try "Black Christmas" by Venom.
Eve of Destruction....60's be coming back in style!! (More like the 30's but the music wasn't as good)
https://www.youtube.com/watch?v=ntLsElbW9Xo
Evolution, revolution, gun control, sound of soul.
Shooting rockets to the moon, kids growing up too soon.
Politicians say more taxes will solve everything.
Ball of Confusion
https://www.youtube.com/watch?v=-9poCAuYT-s
What is being sold is just a perpetual motion machine after all...
Here is some Klattu...
https://www.youtube.com/watch?v=LoheCz4t2xc
I think "Fallen on hard times" by Jethro Tull says it well.
Kansas "Dust in the wind"
https://www.youtube.com/watch?v=tH2w6Oxx0kQ
"You didn't destroy that."
Anyone thinking that the UK did not see this result in advance?
That the UK could not do even a cursory calc to determine how long the Putin would last????
Seriously.
The game must be lots larger than just oil revenues for individual countries.
It is the viability of the petrodollar at stake. The west has to kill the Putin's gold game and will be willing to risk and pay anything to do so.
Ding ding ding...
Putin's gold accumulation is the target imo
Not only the amount, but its role. It is Saddam and Gaddafi all over again. I am the guy who needles all the Putin mancrush people here, but there is something to this story.
https://www.bullionstar.com/blog/koos-jansen/guest-post-russia-selling-o...
Wonder what Uncle Scam offered as spoils ?
Or is it the other way round with the Rothchilds controlling both central banks.
A distinction without a difference.
These fsckers are Burning Down the House
https://www.youtube.com/watch?v=qktKTkKM7cU
Warren and Steely Dan can keep me occupied for hours
the album cover to 'the royal scam' is classic.
If i made sage kelly money it would stripper, coke and hookers
+ 1 for Steely Dan ref alone!
Layoffs? Unemployment? Investments belly up??? Don't mean nothing!!! The CB's got a print button and equities are soaring. Stop harshing my buzz, man.
Obama takes it up the ice...over the blue line...passes off to Saudi Arabia....UK is setting a pick in front of the goalie Putin...Saudi shoots!!!!!
WHOA! What a stop that was! Game over
I honestly loved that, but I think - pick is a roundball term. Screening the goalie. I think that's what we call it on the ice, but its been a while.
We strangled some folks.
How Unsustainable is this Delusion?
World oil production as of July 2014: 77 million barrels a day
But let’s say 80 million barrels a day. And let’s price each barrel at $100 dollars a barrel.
So: 80 million X $100 dollars a barrel = $8 billion dollars a day. $8 billion X 365 days = $2.9 trillion dollars.
US healthcare cost in 2013 = $2.9 trillion dollars
See the Problem?
Bankrupted US Healthcare
Leaves 1 out 5 Americans without it
And it bankrupts about 1 million American families a year. Families with healthcare insurance.
However,
Oil goes to billions and billions of people worldwide. US alone consumes about 1/5
Oil employees millions and millions more people than the US healthcare
World’s food production for 7 billion people depends, pretty much entirely, on oil
The question to ask: “When will the world say enough is enough?”
Then, the whole house of cards comes crashing down.
http://peakoilbarrel.com/eias-world-production-numbers/
http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf
so true
were also accelerating the drain out. Saudi has been lying about what's left for a long time. Just look where they drill now
Between the Healthcare industry and Insurance, I got screwed so badly I still do the coke bottle walk. If there were someone who I could have identified as responsible then I would have gone into the mail business. It is still my hope that one day there will be a trigger and the millions of folks like me will grab up their lead delivery systems and remove the whole top of you can guess what industries. It really is too bad that we can't be civilized and allow all those deserving folks in Gov. MIC, Health, Insur. and Banking to pay back their debts to society with the sale of their good organs.
Merry Christmas from Saudi!!
Wake me when governments are close to collapse, and kleptocrats and the free shit army
are being "laid off."
Damn Scots lucked out again, going to stick Westminster with the bill.
semi s\.
I'm going with the German wirehired pointer to take the ribbon this year... wait, what? Westminster? There was one?
Does it not occur to you that had the Scots voted for independence, this would have sunk them?
That was my point.
funny, eh? now imagine this oil price drop happened during the Scottish indipendence referendum campaign
what would the dominant "conspiracy theory" be? that Westminster was in cahoots with the Saudis so that more "timid" Scots would vote no, seeing "that North Sea oil wasn't the great thing they hoped"?
and imagine the campaign was during a very high oil price time, and the SNP would have floated the idea of a Scottish Pound. Another "oil-currency" to be trashed by the markets?
that's why the future is so damn unfathomable. it's all scenarios, and possible outcomes. we all have 20/20 vision... for the past. the past can't change, it can only be re-written in narratives
Spot on, Ghordius.
IN DEFENSE OF THE SO CALLED FREE SHIT ARMY..........
....ok yeah i got nuthin....... but....... nope.....nuthin'
Rumor goes, OPEC decided not to cut production because Russia refused to cut in tandem. Not the US, not the Saudis.
Convert all the oil fields into pot farms...problem solved.
Who needs a coherent populace anyway?
Who says we have one now.
Those who bought 2009-01-01 are up about 150%
Those who bought GLD have made gain of 30%.
The homo Putin idolizers ar up about 15%.
While you were passed out from your concentration on a reach around, everyone else was making nice gains. Choose your pleasure.
Keep following the nonsense for passed up profits.
If you bought the S&P September 2007, like most of the bag holders did, you are up ~25% over 7 years.
Congadulations. You've won some S&H Green Stamps by doing what your told. Enjoy your toaster and electric spoons while you can.
indeed.
http://hedgeaccordingly.com/2014/12/moscow-no-putin-doesnt-know-how-to-f...
Might as well post it again:
"Everything in the world is interdependent and once you try to punish someone, in the end you will cut off your nose to spite your face."
The best cure for low prices are low prices.
It would be too funny, if the low prices "cure" the Western agressor's oil industry first and that the result would be less oil production from UKrael and USrael, not Russia.
I'd wish this would apply to healthcare and let the free market dictate prices instead if insurance companies and government. Imagine if there were a real healthcare exchange like eBay for doctors. How much costs would go down. If gas stations advertise their prices, doctors csn do the same thing.
Let the markets run free
in this interdependent world, it applies doubly for... war
There's something smelly about your advice, can't exactly put my finger on it, but for some reason I don't buy it. Anyway, I prefer the safety of JGB's. No risky investments for me, thank you very much, only rock solid financial products from here on in.
+1
kito can say whatever he wants about ZH, but this kind of world class sarcasm keeps me coming back for moar.
Like millions of other financially savvy Americans I have a disciplined program of daily investment in the MegaPowerLuckyball lottery..
I consider it to be a derivative of the American Dream and worth as much as any Wall Street synthetic investment.
A big guy I knew, only played his own money on ponies. He said it was a more square deal.
:-)
Your ideas are intriguing to me and I wish to subscribe to your newsletter.
Amateurs! Hire bunch of illegal aliens to dig for oil at 3.50 an hour!
and if they hit China first, we've got a damn fine chunnel.
What's not to like?
We don't need illegal we have Eastern Europe.
If you have America for a friend, you don't need an enemy.
Putting it into military terminology, would this be considered collateral damage or fratricide?
I said months ago that the US was attacking Europe just as much as Russia.
If you think the europeans were not threatened with total devastation(nuke) to make
them play along,you don't realize just how evil Uncle Scam has become.
All of this was foreseeable, so what else could make them commit economic
sepuku ?
This is so true but for some reason the Europeans do not see it.
Winston - what else could make them commit economic sepeku?
Dirty pictures Winston. Remember, I think it was the 2nd Godfather movie? Up by Lake Tahoe? The senator wakes up naked, like he's coming off a serious bender. He notices blood all over the place and then the seriously chopped up hooker he was working with before he blacked out. Then the door opens, in come the mobsters to lead away the guy going into shock and they own him for life. Although often, like in the Terisa May inquiry in your neck of the woods, it involves children.
I'm having some deja vu feel that we've had this ex hange before. Don't kid yourself. They OWN these people, or they would not be in positions of power.
In military parlance, I'm pretty sure it would be friendly fire during a drive-by. Uncle Sam's ghetto gangsta decided to use his mac-10 to shoot the bear but instead sprayed the inside of his car with all his friends sitting around him.
In propaganda-speak, they'll come up with a suitable euphemism to describe pauperising your allies. How about "Improved wealth impoverishment doctrine" ?
And no, we don't bloody well deserve it. The only bastards who have their heads stuck up the back passage of uncle sam live in Downing St.
I'm sure some bastard, somewhere, thought about the consequences very briefly, and either decided or was told by another bastard that it was worth it. Furthermore, the only consequence considered would be the financial one and not the effect on peopole - workers and their families. Where the bastards had this brief exchange I'm can't decide, or whether there may have beren similar events in DC and Whitehall, but I'm fairly certain that neither government nor their advisors (who are, let's face side, the same both sides of the pond) give even the slightest shit for the people or for that mattter for the majority of businesses outside of a special limited few in the banking and defence (so-called) sectors. Pretty 'kin' stupid considering oil is of strategic national importance. Somebody will now point out that TPTB don't have any national allegiance just to themselves - oh, just did it.
We sure are bringing about world unity, because nothing unites the rest of the world better than the hatred of us.
- Robert Newman
Investing, inschmesting!
In this age of Hope and Change, there's funemployment to be had!
looks like they have been. janet's got their back.
"If they just invest everything into US index funds they'll be fine."
Huxley; I laughed out loud without abbreviations. Rolling all over the floor laughing.
Koos Jansen & Tuur Demeester About The Gold Repatriation Movement
https://www.bullionstar.com/blog/koos-jansen/koos-jansen-tuur-demeester-...
Bo fucking hoooo I say they did the same thing to my industry and killed my income so FUCK the oil people it's time to get real
Bo fucking hoooo I say they did the same thing to my industry and killed my income so FUCK the oil people it's time to get real
I may just be a simpleton, but the recent rhetoric on ZH and from it's contributors baffles me. Perhaps I'm missing the sarcasm...
Recent articles seem to imply that "it's different this time" with the oil price plunge. I don't buy it. Why is it different this time? If it's not different, why all the concern? Oil prices have collapsed before. The industry has been turned on it's head before. It's just happening again. That is all.
I've been jonesing for an economic and political reset since at least 2008. It's kinda starting to happen in the oil sector for this generation - why's that bad? Isn't "big oil" evil?
Anyone who's been aware for a few years knows that the markets are rigged. It's a big game, the house rules and the little guy can't afford the ante but the house will gladly take it. Now here we are with (apparently) actual fundamentals taking precedence and it's a problem? I'm just not getting it.
Damn near everyone relies on oil/fuel and has to calculate that cost into a monthly budget. If that outlay goes down on a monthly basis the residual is now available to be spent elsewhere. If JSP is living paycheck to paycheck and hand to mouth then maybe he buys a few more groceries. He's not saving it at 0.05%. He's not allocating any more of it to paying off debt (it's already been charged off). Perhaps he's pissing it away on iGoods. Regardless, I imagine it's being spent somewhere.
This article suggests the "same dollars" are being spent but have no impact on retail data. Maybe, but FFS it's awfully early to tell, isn't it? If JSP has an additional $5 - $20+ per month to spend on shit it may take a month or two to get an idea as to what he's spending it on. Booze and smokes most likely.
So, what if the oil sector collapses completely - down to bare minimum levels. What next? We know there will be less investment, more unemployed, etc. That's all part of a collapse. We've been seeing it happen in retail and other areas since 2008. It'll most likely be overdone like everything always is. There will be an inflection point where the realization hits that too much was shut down and there's not enough supply to meet demand. If it's truly fundamentals that's driving things (I doubt it) then the big shitty, oily bus will be turning around again and overshooting to the other side.
Perhaps I need to rely on my simpleton roots and come to terms with the fact that dramatic headlines get clicks and clicks pay the bills. I yearn for the Blogspot days of old.
Cheers
hanging around here one would almost get the impression that falling oil prices are a bad thing. NOT! an industry that has, using cartel pricing, been fucking over consumers for decades.
fuck big oil and fuck ALL "rugged capitalists" who whine like bitches when the chips don't land in their favor.
But remember, our beloved GOVT makes more off of oil, without lifting a fucking finger, than the oil companies you're cussing.
just sayin...
Joe, I agree. I lived in Houston during the last oil recession and it turned into a Ghost City. After about 6 or 7pm deathly quiet. Even the main mall downtown during the day was pretty empty ... spooky. The funny thing is how people think this type of collapse was not going to happen again despite history telling us differently, esp after the massive Fed intervention delaying this 'correction.'
Same with the housing market. People fail to realize markets cycle up and down, the magnitude and duration of each up or down cycle varies, but the cycle is inevitable. The Fed prolonged the Housing Bubble which is just beginning to correct now and reversion to the mean in the residential housing market is going to be a Doozy! My Dad's old house is still up over 420% from 2000. Unpossible ?! Maybe yes, maybe no.
He says it's not worth 1/3 of that no matter how you look at it compared to rents, demand or whatever. He says his gut tells him we're going to get a 50-60% correction in RE at the minimum. Very possible given how manipulated that market is.
Lucky USG just got it's funding sorted out then...
Sirius, I wish that was the case, but petro products are taxed per Gal/Bbl, so they're still breaking it off in us.
Also, next to taxes, the largest revenue stream for Gov is MMS Lease $$, these are paid in 5 yr bids. (drilled or not, Gov still is paid)
Clicks pay the bills. But you have the spot on comment.
"With great delight we present the latest blowback..."?? I'm starting to suspect that ZH has been purchased by RT.
Let me take a shot. Oil wells & infrastructure take large sums of capital (debt) to be built. The capital (debt) destroyed in the default on the extraction process vastly exceeds the savings to JSP in the short term (wells costs are some multiple of yearly cashflows). The high price of oil has been "baked into" the extaction system. Operate below the breakeven price for more than a fleeting period & huge amount of capital (debt) will be destroyed.
Further, the debt has possibly been used as collateral to enable further pyramiding in the system. On the flip side, JSP doesn't leverage the savings made at the pump. It looks like an asymmetric scenario, small ongoing saving for JSP vs much larger debt destruction today. If JSP happens to work in the Oil business its no use to him at all.
Keep in mind "economies of scale." Lots that we're accustomed to wouldn't work without sufficient scale. That's operations. Figure that maintenance will also take a negative hit: costs for replacement equipment will go up because producers of that equipment are also scaled down, insufficient volume to spread costs across. We can already see that R&D (exploration in the case of oil) is taking a hit.
"There will be an inflection point where the realization hits that too much was shut down and there's not enough supply to meet demand. If it's truly fundamentals that's driving things (I doubt it) then the big shitty, oily bus will be turning around again and overshooting to the other side. "
Perhaps. BUT, one day it is certain that there will be no such thing as a "rebound." Perpetual growth on a finite planet isn't possible. Eventually the earth won't be able to provide what our minds think it should. And as more and more people scale back due to their accumulated debt loads, as population numbers continue to increase (though slowing, which would eventually occur) and the demographics have us continuing to age (more income going toward medical) suggests that this thing is all tilting away from familiar waters...
If they had invested in US index funds since 2009-01-01 they would have gained about 150%.
Gold up about 30%.
Russia with support of the homo Putin lovers 13%.
Yeah always great when you're able to get in right at the start of a ramp job.
What's with your ho o-erotic day-dreams?
Look, here's one back at you AugustAss.
Your so stupid. You can't see what's going on because you, AugustAss, have your noze buried so deep in netenyahoo's stinky bum.
Does that make you feel better. Wanna keep playing? AugustAss, great subliminal handle?
Al, I love ya. That was beUtiful. Everyone should have done that already. We'd levitate like the Star Ship Enterprise.
If they just invest everything into US index funds they'll be fine.
Note to self: buy a humvee
The Zil is getting cheaper to fuel up.
We laid off some folks...
We strangled some folks, or better yet, they strangled themselves.
so what will the UK cash in to make up for the difference? What I heard is that the saudis really only have a slush fund able to cover three months, then they are fucked.
Of course anyone familiar with O&G knows that exploration is always the first thing cut when cash flow is constrained. It's the biggest expense.
"What I heard is that the saudis really only have a slush fund able to cover three months"
From what I read, at $60 barrel it's two years.
Last I checked it's $55 and all they got done was some shitty little loser company making 6100 barrels per day to suspend new development in the Eagle Ford and move the rigs to the Haynesville just east of there.
It's only been $55 for a few weeks. Average it over the last few months.
Not sure what you mean, they are having to sell assets every day to make up for their income short fall below $90 from what I understand and oil has been under $90 for three months now.
What I am saying is that they are at $55 and ramping up their own pain substantially and the only thing they have to show for it is lot's of lost revenue and some shitty little 6100 bbl/day producer moving it's rigs from the Eagleford to Haynesville. Doesn't seem like much of a strategy to me and the real fund they can spend will only last thre months, not two years.
If the whole thing is about Russia, then yeah, as soon as the Russians crack, maybe it'll loosen.
If it's about market share, they have to hold out for a while or it'll have no impact on capital investment or the industry (as you say). But they would have known that and have prepared for a longer hold out. Otherwise they would just be stupid (doubtful).
Or, it's about something else. There is no shortage of speculation here on this topic.
now wrs1, don't be comin' in here with yer fancy facts and all, that dog don't hunt 'round here... lol
duped again, what a lousy poster I am.
It sounds terrible! Perhaps banks will be laying off people too.
They have in the 10,000s but these are just people at the bottom who can't get a better job.
Keep calm and slave on folks
This is less to do about Obama's machinations (does he really have any?) and more about Saudi Arabia wanting to damage the fracking business in the USA and green technology in general.
Both are secondary to REALITY, reality being that the world is in contraction because it loaded up in too much debt, debt that requires ever-growing amounts of physical resources to pay back, and the planet isn't able to cough it up.
Debt that has been hedged, I would assume. So no risk there then.
I agree, it punishes Iran and Russia too, for supporting assad. Icing.
Anecdotal: Co-worker's brother in Alberta just got layed off. They're being hit hard too.
Also, the easing of sanctions on Cuba?
“20bn barrel oil discovery puts Cuba in the big league”:
http://www.blacklistednews.com/Power_Moves%3A_US-Cuba_Deal_Isolates_And_...
BINGO!!
I was talking about that earlier today, how strange it would be on the eve of signing Ukraine Freedom Support Act the USA out of NOWHERE begins talks of ending the Cuba embargo?
I love listening to people talk about how great of an idea that is, how bad sanctions are, and then completely agree with what the government is doing sanction wise to Iran and Russia.......because why use logic....
Well I'm off to smoke crack laced with LSD and bath salts.
Thought that it might also have to do with getting in there to keep Russia out (stop a replay of the early 60s). Not that it's going to do anything in the long-run. Ah, but there's for sure fresh meat... er, a, democracy to spread!
Another Nation of pigeons to put into debt?
Oh...Goody.
We are not out of pigeons yet, right?
Let's start the Cuban Property Bubble. Have I got a nice place to build your second home...
Had this argument with some supporters of all this a LONG time ago. I'd warned that Cuba would be opened up and sucked dry. All I ever wanted was for my govt to stop fucking around there (using my tax dollars) and let the people figure it out themselves.
Surely nothing could bolster the Cubans love of their regvolution so much as insight into what America will do to them?
Nice "discovery"
In 2013, the United States consumed a total of 6.89 billion barrels of petroleum products, an average of 18.89 million barrels per day.
http://www.eia.gov/tools/faqs/faq.cfm?id=33&t=6
Yeah. That should be good for a little less than Three Years of our total annual consumption.
Slim pickin's these days.
Green Energy....? You gullible fool.
Fuck me, I was just about to get a neck tattoo with the name Candy inscribed. Bitch will just have to wait until the next bubble.
Yes but of course that's what happens when you drop the price of oil by 40% in two weeks...
But the good news is they have all the requisite skills with cleanups in places like the Gulf wearing Hazmat attire only this time it won't be oil they will be cleaning up!
Sure hope Mr. Soros and Mr. Rockefeller have the best of man servant care in that lair 3 miles underground! The people that work for them are gonna get mighty pissed when they have no place left above ground to spend their money!
How come everyone is now so concerned about "manipulation" of oil (which is a commodity) but none of it's little brothers? Like gold/silver? Like FX? Like propoganda/news? like everything these evil idiots touch?
This stinks. and it continues to stink. There is not one "object, commodity or service" that is not being absorbed by the Borg. Downfall of capitalism is the need for continued growth and absorption of everything. Pretty quick humanity will be paying for every breath we take.
Fuck it. It does not work.
I hope those oil workers are in a better financial position then 40% of Americans whom the latest poll shows that many Americans live "paycheck-to-paycheck.'
I really hope those British Grease Monkeys saved moar then meriakans
No chance, not when the biggest growth industry seems to be Shylocks, er,, sorry, payday lenders giving loans at 1000's percent interest. Tells you all you need to know.