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Canada Heavy Oil Drops Below $35 As Rig Count Hits Record Low For January
Think Texas and Pennsylvania have a problem with plunging oil prices, don't look North. West Canada Select (Heavy) crude oil prices have collapsed to below $35 per barrel (the lowest since Feb 2009). This is a 60% plunge in the last 6 months and has left the industry stunned.
While US rig counts have fallen for the last few weeks as the lagged response to falling prices finally catches up to reality, the Canadian oil rig count has never been lower for the first week of January.
Will the Canadian housing bubble be next?
Charts: Bloomberg
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The black swan has arrived.
It's not a black swan, it's someone doing something really stupid in order to hurt someone else without caring who else they didn't intend to hurt is harmed as well. The response of those who were not the target against the one doing the stupid thing is what the stupid one fails to consider and ends up costing them more than they expected to have to pay.
Stupidity is the ultimate black swan.
I guess that XL-Pipeline thingy is now kinda moot...
[PS: WTI now has a 47 handle...]
I actually think that blaming the Saudi's for everything is wishful thinking. Looks more like a depression with cratering demand everywhere.
The big oilsands companies will stick with the "it's the Saudis" meme and many will build now. Oil needs to stay low two years to kill the big mining and SAGD projects.
Boy it's a good thing nobody borrowed all kinds of money to fund the oil fields and buy houses. It's also even better that the financial industry didn't secutize all that, and then leverage it all up even more with derivatives. /sarc
Run for the hills, she's gonna blow!
Meh, bring on the bailouts.
No one loses in the New Normal.
"Nerf Capitalism"
Obummer reported to have admitted in an interview that Russian economy is the target of falling oil prices:
http://www.dailymotion.com/video/x2dqj0c_obama-admits-falling-oil-prices...
months ago i said oil was fundamentally a 35 dpb proposition and now i'm gloating. /gloat.
It's allowed. Good call.
Yup Saudi production has not changed at all, actually slightly lower YOY
It is the recession that never left that is a full blown world depression now
Correct. I own a Canadian oilfield product manufacturing company. We never regained half of the losses we sustained in 2008. Stumbling along for 6 years, living the new normal; weary of the rules of this game. Bring it on already.
Nahhh! Lets pump that sand oil crap all over the place. Creates jobs ya know...................................
That you Hannity ?
Drill baby, drill.
We can make it up on volume, right???
Uh...No?
Uh oh.
Yes, that actually does work with oil if you have it to pump. It doesn't look like the Saudis do though.
A flock of black swans: housing is coming, then banks. Cannot wait.
Good thing in Canada the banks are explicitly protected, along with their government-backed CMHC insured mortgages. Definitely do not have more than $100,000 in any Canadian bank, or you will be taking a hair cut. If you are a business that needs operating cash, maybe try to diversify across three or four banks and hope for the best.
Ah...no.
Stupidity from people is never a surprise.
That was a pretty stupid post.
seems to be black and dripping with oil and unable to get air borne but none the less a back one.
Looking for a safer short? Think Canada. No FED jawboning, no BTD'ers, and no unlimited supply of fiat to fix any problem.
Largest bank is Royal Bank, huge exposure to all things Canada
Says the guy with a sentence structure of a three year old, oh the Hypocrisy.
It's not so much stupidity itself that's surprising — it's the level of stupidity. I'm constantly surprised by just how stupid people can be. I shouldn't be, but I am, especially when it comes to mass stupidity or, as I sometimes call it, "stupidity in numbers."
People tend to get stupid in groups, and a lot of the time, it's more dangerous than anyone could have predicted. I think we're approaching the outer limits of full-retard.
Group stupidity is what sits in the halls of CONgress.
"...the outer limits of full-retard."
There is nothing wrong with your countrymen
Do not attempt to inform your citizenry
We control the special needs population
We can focus on the dribble from the lip to a soft blur
Or sharpen that dribbling lip to crystal clarity...
OK, so people go throughout their day, most learn functionally. But it's our job as informed citizens, right, to exercise our minds enough that we don't sink into the defunct, placid, well, nothing. That's because at the level of intelligence humans are at, those who don't exercise it have a tough time understanding, well a majority of things. Doesn't make sense, but it's true. You can't naturally slap together this stuff. It just doesn't work.
Quantity has a stupidity all its own.
Stupidity is not a black swan. A black swan is an event you see for the first time. Stupidity you see every day.
THIS AIN'T STUPIDITY, BITCH.
THIS IS GEOPOLITICS!!!1
Great, the US will get refugees from the north and south of the border now.
Oh, don't forget about us, okay? Refugees from Europe. After all - it's a centuries-old tradition.
Sweet, this will mean I didn't take French for nothing in HS.
Guess legions of French-Canadian hockey players weren't a match for wetbacks with hammers.
Oh well, C'est la vie!
pods
You have been getting them down south for years, but the big difference is we always return home come summertime.
It's aboot time, eh!
Yeah, we'll be getting an influx of "Frost-backs" from the north...
i guess we will all be getting more friends and buddys ...guy....
Banks for sale! Come and get it!
We have bailouts too except they're kept all secret squirreled away from sight........banks will be just fine, Mark said so.
This is not black swann its all good in the hood boehner is speaker and not a damn thing changing Yellen will say so tomorrow. Dow at records by friday btfd
http://paalp.com/_filelib/FileCabinet/Crude%20Oil%20Price%20Bulletins/Da...
NORTH DAKOTA BAKKEN
Williston Basin Sweet........................................................$ 33.44 * ....
Williston Basin Sour..........................................................$ 24.33 * ....
Chow Mein...................................$ 15.76 * .....
Horse Shit.............................................................$0.00 * ......
thanks fiscal-and where is break even? pump and send a blank check with the tank truck..
fucken-eh, ha...
Oily swan.
It was a white swan, but landed in one of the tailing ponds, thus getting covered in the mucky muck black tailing pond stuff. Everyone mistook for a black swan. Common mistake. Don't feel too bad about it.
Need to show these charts in log.
"$35, do I hear $30?"
No bids, I see.. I hear China saying, "I'll give you $10 to take it off your hands."
China already has a sweetheart deal with Saudi Aramco... they don't need glorified road tar when they can get the good stuff
What do you think the price is for Saudi Sludge? They have to pay to have it shipped over to the US to boot. I bet they are giving it away for $25/bbl just to stuff the storage here in order to hurt WTI.
Brent +shipping, I keep hearing about the Saudi cost of production, with Brent getting ready to cross $50 we might be finding out.
Apparently the Wilistion sour is going for $25 at the wellhead according to Plains.
http://247wallst.com/energy-business/2015/01/06/north-dakota-producers-l...
We don't use Plains anymore, we are using Permian and getting a lower ding but it's double digits. I got $62 for oil in November, I shudder to see what I got in December, probably about $49 and right now it might be time to shut the well in for a bit. The good news is that the strippers are getting nothing. They had a full tank the last time I was out there so I think they only got about $50 for that tank and now they have to wait another six weeks for the tank to fill up and then what are they going to get? If they shut in, they are dead meat. However, my good well in Culberson is what I am more concerned for. The operator last month was talking about just shutting it in below $50 but our lease won't let him do it. I left him a message today to give me a call and tell me what he is thinking right now. Seems oil is headed lower still.
I remember back in 1999 when you could grab a nice condo in Canmore for about $225,000 or less ... but that's before the onslaught from HK, India, Pakistan and LA. That same condo is now $925,000.
Interestingly my realtor who helped me back then said if earl continues this sldie the price may drop down to below $500k. He doesn't think lower then that since there's still be those tenacious foreigners flooding in, but the drop in oil will have a definite effect he opined.
Those condos on Eagle Ridge which are empty because they belong to Flames players and Tory politicians will get smoked. That is, the ones that weren't smoked when Cougar Creek went apeshit last year.
The very last person I would get real estate advice from is a realtor. Taking a 3 month course and buying bus advertising doesn't make you a real estate expert, nor does doing viewings with clients.
How many realtors do you think have made a serious study of their industry and history? Best you'll get is a longtime veteran, and even he is just a noob who's done the same thing over and over for 20 years.
When the salesman is telling you, a potential buyer, the price will have to be shaved nearly 50% before the pig sells you have to know it isn't him just doing what he's always done. If he's always done that then he would not have lasted in sales past a week.
I read about Canmore some years ago as mentioned in a book by James Davidson. It has the highest ratio of police to citizens of any community in Canada. It also has a geostationary satellite for communication overhead as well as hardened lines, relays etc.. It has a very heavy security and intelligence presence by the Canadian gov't.
All this because it is one of three North American communities where the elite can safely go to when the poop hits the fan. Many homes there are owned by various foreign governments who have diplomatic presence in Vancouver. Many large global corporations have residential property there as wel.
Its good to know that a lot of scum will be easily cleaned up at once in one place.
Really? I thought people bought in Canmore because they could not buy in the National Park, Banff, itself so they bought on the southern edge. I always thought Canmore people were strange, however. In any case, the prices up there and in Calagry have gotten way ahead of itself. I used to ski in Banff and Lake Louise but the place got way too crowded and in the summers all you smell are the exhaust fumes of tour buses. Used to be a very pleasant rustic spot---no longer.
Harder and harder to find a nice un-touristy reasonably-pricedvacation spot anymore in USA or Canada. I'm not sure what'll happen up there. When their house prices spiked over 400% within 10 years usually there's a pretty substantial correction at some point.
In other news, El Presidente Zero says he won't sign the Keystone pipeline bill if passed, which is a big change from the veto threat. If he doesn't sign and CONgress is in session then it becomes law. There must be enough votes to over ride him.
Not sure it even matters at this point, and Bummer knows it, so he's trying to soften his stance to score political points.
agree, economics is why it won't get built, not politics
Canadian heavy cost a lot to transport to refinery
~11USD/bbl by rail
Crude $47.56 down 2.48: the temporary $42 bottom is maybe 2 or 3 days away, or less, if today's oil-equity collapse continues:
http://www.investing.com/commodities/crude-oil-advanced-chart
You are calling for $42 by week's end?
That is a loss of 15% to 20% in a fucking week?
Now that is what would be an Epic Meltdown.
If that happens then we are in a "World of Hurt". I do not care what side of the trade you are on.
The Shit will have hit the fucking fan.
That will take down banks.
The notion of ecosystem cost and source EO/EI ratio is now a major factor to the price of fossil energy.
The notion of political region where the energy comes from has always been a major factor for large energy plays. As source security for the vital economic life line is primordial to all power constructs.
The current global crisis is bringing this out to the forefront.
We will now evalutate energy price not only taking into account its spot price but also its incidental associated risk costs.
A complexity that today's markets have NOT UNDERSTOOD, in their invisible hand knee jerks, based on PURE short term financial Ayn Randish GREED is GOOD logic.
Dream On libertarians, you only see the whites of the eyeballs of your opposites, once you are already in the honey trap you created for yourselves in total unadulterated hubris. (I refer to the neo-cons now disguised into Libertarians like evangelical deniers who have read the new Von Mises Gospel).
If it goes negative I'll buy it.
If you buy it, you have to pay transportation and storage costs, right? What if the refineries slow down and you get stuck with the oil in Cushing? Would you sell the oil at a negative price (pay someone to take it) to stop losing money on storage?
It will not go negative unless of a TEOTWAWKI event...or a massive terrorist strike on all of the refineries....which would be a TEOTWAWKI event...so I repeat myself.
At that point the storage costs do not matter anymore, nor the transportation costs, nor much of anything for all that it is worth.
If the refineries slow down and, consequentially, release less saleable product to the consumer market then we could get declining prices for crude while, at the same time, realize increasing prices for fuel at the pumps.
Now that would be an interesting turn of events. Basically the producers in the fields would just shut down and not ship anything.
Thus the price will not ever go negative.
Thus you respond to a post made as a snark remark without any analysis of the reasons of why that it is highly unlikely.
And you miss the underlying meassage of the post which is, NEVER CATCH A FALLING KNIFE. That is what the Oil Market is today.
I may buy into declines but there are times when it makes sense to wait it out. This is one of those times.
Canadians will be ok they diversified the nevada properties
The Politicians say the oil and gas business does not employ that many people so it will not affect our economy...I disagree...but we will soon see...this will ripple or Tsunami through our economy soon....then we will know..I tink it was 30% of our growth the last 6 years of Obama....and now he wants to take credit for it..when he had nothing to do about it...other than try to stop it from happening with rules and regulations by the thousands...
In Canada, Alberta provincial and Canada federal government will both probably run >$10 Billion deficits due to loss of royalties alone if the oil stays low all year. Newfoundland's probably also going to be interesting.
I hope everyone already got their PM. Now we can just wait, watch, and laugh while Bullion Banks collectively shit their pants.
The price for the most important commodity for modern humanity falls off a cliff.
This is about much more than oil and supply/demand.
Yes it is, and if anybody thinks any differently they are fooling themselves. There is something big going on and it's more than just a price war. Remember a few years back when oil was pushing $140? The Sauds kept claiming they would ramp up production and they had no impact on oil's climb. Why would we believe that they can force prices this low based on history?
I think the Ponzi scheme is finally collapsing. Key is the velocity of money. It has now dropped below the minimum level needed to keep the Ponzi working. This is huge!
I hope that you are correct.
So there is a lack of "Greater Fools" with liquidity to keep the scheme going?
Good.
Is it more than a price war? Occam's razor and all that?
It is not that I think it impossible...or even paticularly unlikely.
It is that these days the homeless guys with the "End of The World is Here" signs are the only ones who aren't expessing BS with every breath.
In that kind of environment, I am hesitant to give much credit to anyone.
For the record I think the Administration is plenty evil enough.
But smart enough? And covert enough to do it for months without the scam being obvious?
There's no precedent.
preach it, bro
CRB (commodity basket) doing its (near) DAILY digging of multi year lows
Only energy is getting killed.
Silver, gold, etc doing fine.
...copper looks Fugly
Only after they already got the shit kicked out of them earlier in the year and for the last three years. Be real. I have both and oil was the bright spot in my assets prior to this mess but we will see how it shakes out.
this is the unintended consequence of easy money ie stockman. iron ore, copper, new cars, temporary hsg rebound are all on deck. all the spin off industry suporting the above will contract. this is a snow ball rolling down a mountain in wet snow...
oh almost forgot-fuck the fed, ha...
Not only does China get to buy PM near production costs, and buy energy at amazing prices, but now they will get to buy all those Canadian and US rigs real cheap also?
Damn those Wall St, DC and Saudi manipulators. It's all their fault. China is innocent in all this, while they shit Skittles.
+1 for the 'cui bono'
Current Active Drilling Rig List FOR NORTH DAKOTASo are the Rockefellers getting back into oil soon?
i thought it was seasonal tyler that rig count? Further then how can u explain the on going manipulation in driving prices lower despite this rig count?
futures contracts is gone - is it so fucking hard to find out?
We already know from the rig counts and natural gas this is in fact a meaningless indicator.
Natural gas production has exploded higher.
"i thought it was seasonal tyler that rig count?"
The chart is for rigs in the first week of January for each of the last 10 years. It is a year-to-year comparison, not a change since last month chart.
"Further then how can u explain the on going manipulation in driving prices lower despite this rig count?"
As far as I know, the drilling rigs are for drilling the wells, i.e. starting them. The drill drills the hole, then moves on to the next hole to drill. This chart just indicates a decline in the rate in which new wells are being made, it does not indicate total number of producing wells or total oil production.
I suspect it will take months for a decline in drilling rigs to result in a decline in oil production, although probably before that time productive wells will be shut in.
I have no expertise in this, so if someone wants to correct and clarify, that'd be great.
I don't think Canadian housing will crater, not over all, alberta housing I can see cratering, maybe out east housing will cool, housing here in the west (B.C.) won't crater, maybe cool abit, where's the money that's in housing going to go ? Goverments been printing like crazy for a long time to keep up wih the Fed., the paper slooshing around has to go somewhere or stayed parked where it is. If money comes out of real estate where will it head after that ? Stocks are sliding right now. I don't think Canadian's are hughly leveraged in real estate. A lot of the upwards pricing pressure in B.C. was from chinese buying up Vancouver housing.
.
I'm just going to blame it all on John Kerry. Fucker!
I'm just hoping the prices at Walmart drop so I can go buy some more cheep useless shit made in china's labour camps....Umm I mean factories LOL!
But seriously let them crash the economy, set up the world financial government, and institute marshal law...I'm ready bitches !!!!!! yeeehawwww
I'm just going to blame it all on John Kerry. Fucker!
I'm just hoping the prices at Walmart drop so I can go buy some more cheep useless shit made in china's labour camps....Umm I mean factories LOL!
But seriously let them crash the economy, set up the world financial government, and institute marshal law...I'm ready bitches !!!!!! yeeehawwww
Big Euro banks bet the farm on the infinitely increasing price of energy.
US banks sold them their default swaps.
This is why the ECB today is floating options for QE. They will imminently need QE, regardless of what is happening with in the EU economically, to save their banking system.
And the impacts of low oil on financial entities is also why the Fed will eventually have to return to QE shortly thereafter.
Is it happening?
It's as if millions of bottom pickers suddenly cried out in terror and were suddenly silenced.
Maybe the GOP retards can talk the Canucks into loading the Keystone Pipeline up with Moosehead beer since the Canadian tar sand oil play is in an advanced state of stinky decomposition and won't be around for its completion.
On the south side of the 49th parallel, the Wallstreet huckster-run shale oil scam is showing early signs of decomposition and just starting to reek. Harold Hamm's ex-wife had better hurry up and grab the rest of his scratch before it is vaporized and he's living in a rented double wide in Fargo.
And then there is poor Mr. Buffet who will have to hurry up and convert his oil transport trains into kiddy train rides or perhaps mobile whorehouses for the flyover states.
Canada can send water to the desert States and they in turn could grow the crap out of their lands.
Now that would make sense but we're living in a world where humanity has barely escaped from living in caves. Needs a few more thousand years to evolve into a sustainable and sensical species.
haha!
Here is HINT for you folks:
In Canada all mortgages are secured by CHMC and that is to my understanding
government entity that can leverage loses on all tax payers...
Canadian idiotic house prices are beyond any logic, and periodically i am reading
how whole worlds laughs at them...
i guess they want to break back of Canadian banks ...( they = hedgers)
"I guess they want to break the back of Canadian banks..."
you're warm, but it's really more like the banks (and those oh so very close to them) in Canada want to break the backs of Canadians:
Never been invited to Bilderberg (SFW)
"... that's why you'll notice that they (the banks) are still very profitable even though everyone else is suffering..."
Only mortgages that created with a low down payment are insured by cmhc in canada
Meanwhile, the highly polished dollar shines like a mirage to a thirsty man in the desert.
Only the Beatles are more over valued.
No bubble here. /sarc.
http://www.cbc.ca/news/business/greater-vancouver-detached-homes-now-ave...