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After Saudi Arabia Crushes The US Shale Industry, This Is Who It Will Go After Next
Whether it is to cripple the will of Putin and end his support of the Syria regime (thus handing the much desired gas-pipeline traversing territory over to Qatari and/or Saudi interests), a hypothesis first presented here in September and subsequently validated by the NYT, or much more simply, just to destroy any and all marginal producers so that Saudi Arabia is once again the world's most important and price-setting producer and exporter of oil, one thing is clear: the Saudis will not relent from pumping more oil into the market than there is (declining) demand for, until its biggest threat and competitor - the US shale patch - which recently had become the marginal oil producer, as well as its investors - mostly junk bond holders gambling with other people's money - are crushed, driven before the Saudi royal family, and the lamentation of their women is heard across the globe.
That much is known.
But what neither the Saudis, nor the US shale companies, and certainly not their investors who lately seem to get their investment advice from the no longer Nielsen-rated Financial Comedy Channel, know is even if every last US shale company is Friendo'ed, there is an even more insidious group of drillers and oil extractors behind them, backed by an even greater monetary bubble and an even more clueless group of sources of cash, just waiting to step in and become the next marginal oil producer.
China.
According to Global Times, the slump in oil prices "has triggered a flurry of Chinese investment in oil wells, in a bid to get a high return from the black gold."
Cutting to the chase: once the US funding for local shale runs out, as companies - some already levered 5x, 6x, or more can no longer even remotely service their debt and not even Fed's ZIRP is enough of an impetus for yield chasers to throw more good (other people's) money after bad - start filing for bankruptcy en masse, who will step in continue the extraction? Why China of course: Global House Buyer, a Beijing-based services provider to Chinese overseas investors, said on Saturday that the company now has presented an investment opportunity in oil wells in Texas, US, to Chinese investors.
According to the company, the project, involving six oil wells in an area of 2,240 acres, is located in Crockett County in Texas. Cooperating with local developers, the project is expected to attract a total of $4 million investment at the first stage, with the minimum investment of $100,000 each.
The annual return could reach more than 12 percent, the company said.
Or, if Chinese sources of funding rush in to maintain oil supply at its current levels, or even boost it, into a world where demand is plunging (and, poetically, driven by a plunge in demand out of China itself), that annual return could reach 0, -12% or, most likely -100% as yet another series of investors with hot central bank money is wiped out.
Of course, nobody ever anticipates lower prices: "The return is based on our prediction of future oil prices," Liu Bin, general manager responsible for the US investment at Global House Buyer, told the Global Times on Saturday. Liu predicts that the current oil price still has room to rise, which will generate higher profits for the project.
What Liu seems to be unaware is that the current low price of oil which enables him to find investment opportunities in the Texas shale is precisely due to supply and demand being where they are, and unless supply collapses to keep up with dropping demand, oil prices will never go up.
But why bother with the details. For now Liu, and many of his competitors, is merely eager to demonstrate his ability to generate 12% returns on the back of a surging price driven by... his incremental pumping?
According to Liu, the oil wells have been in operation since 2012. Currently, the total output per day is about 170,000 barrels, and they still have more than 10 years of drilling capacity with a stable output.
"Investing in the oil wells could be read as another sort of real estate investment," Shi Ruixue, CEO of Global House Buyer, said.
Because the Chinese clearly have a tremendous sense for undervalued real estate investments. "Investing in oil well is a market-oriented activity, and it is understandable why investors are flocking to the oil sector, as the oil prices are still at a low level, Han Xiaoping, chief information officer at energy portal china5e.com, told the Global Times on Sunday."
And now comes the Friday humor:
"Chinese investors have gained more experience about risks after the financial crisis in 2009. It is a good timing to invest in oil projects as the prices are still low. But if the prices move further down, it will pose risks to oil investment," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Sunday.
He Shaohua, a potential investor who has invested in housing projects in the US, told the Global Times that he planned to invest $100,000 in the oil wells, as it is good to diversify his investment.
In other words, just as US junk bond investors in energy companies swear to never repeat their mistake again, at least those who still have "other people's money" to invest, here comes the next patsy, one who has just as deep pockets if not deeper, and who will assure that the US pumping action does not stop for a very, very long time.
We hope we don't need to explain happens to the price of oil as China storms in to restart the deserted US shale rigs.
However, one thing we can't wait to find out, is just how will China react when it learns that just as it was preparing to celebrate, that it will need to deal with yet another marginal source of production (and funding), one who will surely engage in output competition for the next 12-24 months, until the latest batch of hot money, just off the central bank printer, runs out.
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Lost me at
After Saudi Arabia Crushes The US Shale Industry,US Shale was merely collateral damge...
Dime store novel for $100, Alex.
If those laid-off tatooed redneck violence-prone Bakken oilworkers with their deer rifles and pick-up trucks ever figure out that they lost their $100K a year jobs because some unelected people wanted Assad out in Syria...
Anyway just I'd hate to think. Better get the local police terrorist response unit a couple of armored personnel carriers just in case.
All it would take is for one of the current crop of Country and Western clones to write a song about it.
At some point, any one of the many nations that are beholding to SA will become quite fed up with the Arabs controlling the spigot and crush them like the insects that they are... It's only a matter of time...
Wahabists to win Alex!!!!
1. Saudis do nothing without the nod from their American overlords
2. Saudi women have been wailing long before this drop in the oil price.
It appears you have the roles reversed...
"He who controls the spice, controls the universe..." - Baron Harkonen
I believe it's you who have the roles reversed.
The spice in this saga is a proverbial reserve currency, plainly because the rebels of the Bear tribe that the Empire wants to crush seem to have the largest amounts of that other spice...
it's Bush's fault, he's an oilman......
Isn't it amazing how the hebrew media has convinced America that nothing that happens during ObowelMuslims watch is his fault?
And the same hebrews blamed Bush for everything that happened during his watch. I am fascinated by people who claim both parties are the same. Maybe one of you could explain why the hebrew media treats both parties so differently if they are really the same? I bet I will get junked and people will call me names instead of answering or telling me why I am wrong. I'm used to that, since I am capable of independent thought. Fire away sheeple!
It's hyperinflation time kids, it's hyper Howdy, cousin of Howdy Duty. We're just here to put out a fire, The middle class is a burning, we saw the smoke and knew their musta been a fire, followed the trail and here we are, does anybody have any water besides jack and Jill around here? If windy shows up we could have one hell of a storm a brewin.
Russia and China are merging. The BRICS, et al are continuing to grow...over 140 countries in BRICS now.
Saudi Arabia and most other OPEC scumbags are going to pivot towards Russia and China and away from the U.S.
Let's not forget that our scumbag, treasonous "leaders" have excluded Russia, Iran and others from the SWIFT system. So what have they done to compensate? They've created their own oil/gold/currency trading system and have EXCLUDED the U.S. and the FRN shit dollar from it.
And also, let's not forget the Shanghai Cooperation Organization, http://rt.com/op-edge/187360-sco-economic-humanitarian-cooperation/, http://thewealthwatchman.com/united-eurasia-pt-2-the-powerful-organization-that-no-ones-talking-about/, that has been formed by Russia, China, a few "stans" countries along with many satellite member nathions. The U.S. has been EXCLUDED from it even after repeated requests to be allowed to join them. NOPE!!!
The FRN shit dollar is finished. Those stuck using it will be the big losers in the end...and that's us, "folks". The only way to protect yourself from this inevitability is to get out of the bankster system...minimize your counter-party risk any possible way you can now by liquidating anything in the system and stacking up that phyzz like it's goin' outta style...you will be greatly rewarded in the end by doing this now.
Hold a good amount of cash for sure...just keep it outta the bankster system...it will definitely be needed for a certain length of time as the world monetary system resets and transitions from the U.S. fiat, shit, petro-dollar, to whatever new partially gold-backed monetary system. But get out of the bankster system as much as you possibly can at this time and continue to distance yourself from it any way you can from now on.
Stack phyzz...food...water filtration...guns...ammo...hunting/fishing/camping gear, etc. etc. etc. You all should know the drill by now.
As a disclaimer, I'm in Jim Willie's camp. The U.S. dollar is going to be killed just as Kyle Bass told us they were planning to do. Hell...they've already killed the dollar at this point to be honest...we're now just going through the volatile transission into whatever the next system is going to be. The vast majority of Americans just have no fucking clue what's going on. Just as the gov-scum want it to be. The U.S. dollar is a fucking zombie at this point.
The dollar is dead and will be replaced by something. There just may be a world war in between the transission in order for the banksters and the gov-scum to cover their tracks and erase all their debt while at the same time attempting to enslave most of the world.
So don't just prepare to save yourself...this is going to be huge....a massive shift on a global scale. Prepare to help save freedom and humanity.
The fight is coming...it's going to be enormous...you better get fucking prepared for it now, bitchez...any way you can. You don't want to get picked off first...you want to survive to make it to the other side. Everything is going to be against people like you and me. Get your heads in the game...be mentally and physically prepared as best you can be from now going forward. Team up with others. Have a plan...it doesn't have to be the best plan, it just has to be a plan so that you're ready to be versatilve and adaptive to whatever happens as best as you possibly can.
Think Terminator or Road Warrior...think survival.
And pray that it doesn't actually have to come to that.
Ho Lee Kow!
The Chinamen are coming ... lock up your woomen ! They're desperate for females, not oil. They're already stealing all those fertile, blue-eyed, 6' beauties from the Ukraine!
http://foreignpolicy.com/2015/01/28/ukrainian-brides-may-solve-chinas-ge...
http://www.cnn.com/2012/11/14/opinion/china-challenges-one-child-brooks/
"Millions of "extra" boys have been born: Already, 41 million bachelors will not have women to marry. If nothing is done to change this trend, Poston noted, by 2020 there will be 55 million extra boys in China."
http://www.prb.org/Publications/Articles/2012/china-census-excess-males....
The televised Ferguson riots were psychological conditioning by the MSM.
How Ironic. Negative rates calling for hyperinflation.
Hmmmm, just like I said, cowards will junk me yet cower from explaining where I am wrong.
That sure take a lot of courage. LOL@SnivelingWorms
LOL, there sure are a lot of cowards here. What ever happened to debate?
Your hebrew Saul Alinsky tactics have killed it. Who knew that so many 'libertarians' were actually progressive socialists?
I wouldn't worry about the down votes. You never know who's doing it(gov. workers?). Just be glad there's a few places where you can state the blatantly obvious w/o being banned.
So now cheaper oil is a bad thing? Unless you work in the shale industry, this is a great thing for the economy. Welcome to bizarro world!
So many dead dinosaurs.
So little time!
EDIT:
What is a Plethora of Post-living Pre-historic Pre-programmed Probiotics Provided Post-haste for $10,000 Alex?
TV Movie Of The Week for $1000, Alex.
What 1959 western featured camel pulling rickshaws?
Maybe I'll personally go out there and inform everyone there what has happened.
Not a good idea. They also have short fuses and have been known to shoot the messengers sometimes. It's why pizza delivery drivers are so hard to find out there.
Although they killed 3/4 inventors that built Thorium Plasma Batteries - whoever does so is going to change the energy equation forever.
A single gram of Thorium gives the equivalent of 20 million car battery charges - and standard Thorium laced Tig Welding Rods soaked in food grade hydrogen peroxide for a month will give you grams and grams of pure Thorium.
The last question is - how did they build the plasma battery?
They didn't.
Sorry.
Does this thread explain why they didn't?
http://www.energeticforum.com/renewable-energy/10974-nuclear-thorium-pla...
They did.
Sorry.
http://www.upowertech.com/
Thorium is 33% more plentiful than uranium in the earth's crust (hence cheaper to pruduce than U), produces 30% more energy yield than uranium , has a much shorter radioactive half life but cannot be used to make an atomic bomb.
Thorium would have been a better fuel for nuclear reactors than Uranium/Plutonium but the Pentagon, post 1945, decreed that all nuclear plant designs (General Electric, Westinghouse were the companies)use Uranium rather than Th so they could harvest nuclear fuel for bombs from the plants.
I have a mineral property in Northern Ontario, Canada that has a large,roughly 4% Thorium deposit ; however, it is extremely difficult to attract investors/money to finance the project.
Thorium is 33% more plentiful than uranium in the earth's crust (hence cheaper to pruduce than U), produces 200x more energy yield than uranium , has a much shorter radioactive half life but cannot be used to make an atomic bomb.
There fixed it for yah :)
The Thorium energy yield depends visa vi Uranium yields is a complex subject but 200X is quite an exaggeration.
You may read that figure somewhere, but our geologists, physicists who have studied the yield question would laugh at ypur figure.
I am very thankful you brought this up 200x 100x 10x - I challenge everyone to go watch the crowdsourcing video and decide for themselves..
https://www.kickstarter.com/projects/gordonmcdowell/thorium-remix-2012-f...
WHAT THE FK IS WRONG WITH YOU PEOPLE? You honestly LIKE eating irradiated seafood from leaked uranium rods which we all *know* the yakuza gangs are secretly dumping all the containment pools into the ocean. But you'll protect the cult of intelligence even if your own children grow up cancerous and crippled. So while North America works overtime to censor, stifle, and block and thorium development by it's own citizens China is racing forward to build it for their own industries.
We are talking UNLIMITED FREE ENERGY oh right I'm sorry that's sacrilege. No freedom for the peasants.
India is building a Thorium reactor as we speak.
They are doing the 'real thing', and according to their project manager the Th yield on this reactor will be 37% higher than that of comparable sized U reactors.
And 'free energy' is a delusion. Cheaper energy is quite obtainable.
Food grade hydrogen peroxide? Who eats oxydizing agents?
3% mouthwash at Walmart. Also used to brighten teeth. I agree shouldn't eat it. Would kill liver.
That explains why they kinapped them if your information is correct. Don't worry. They are in the underground facilities out west. Maybe they give them new identities and let them out after ten years of slave labor.
You probably never had to work hard in your life to understand these rednecks............
I have way more respect fopr them to take the chance to go there and try to work than some arm chair idiot that dont know work from shit..........
You suck!!!!!!!!!!!
Bakken is where I would be if I wanted to work hard and and make some good money and I have done more than my share of hard work not too far from there on several thousand acres of farmland over the years.
The point being made here was that now we KNOW that the oil price collapse AND THUS THE RESULTING LOST JOBS IN SHALE OIL were a direct result of an errant Administration policy that apparently you support.
"errant Administration policy that apparently you support."
You must be referring to the Bush II administration rule, pushed by Dick Cheney, that exempted shale drilling from virtually all environmental laws. Without that shale drilling would be nonexistent.
Google Halliburton loophole
Yoiu have work confused with manual labor.
some day this redneck mofo0 be looking right at you. its gonna hurt mofo.
wessel ass fucking keyboard tapper. what else to you tap? fuckhead...
You sound like a stupid racist negro throwing around racial slurs....just like Obama
I know of no person, negro or otherwise, that would call someone a wessel ass.
Ok, maybe a Chinese guy learning English.
You want to see confrontation? Try prying those deer rifles out of the hands of those violence-prone folks in the name of ghetto'n'.gov safety. When the Fedcoats really start deploying the shrinks to deem people 'bloodthirsty' and 'dangerous' (i.e. no guns allowed), you'll see quite a bloody good show. Might even be some G13 collateral damage.
They aren't interested in going after specific people... they are going to eventually want ALL weapons as economic conditions deteriorate and the EBT cards finally don't work anymore. It's something that appeals to totalitarian government types around the world.
When EBT quits working, so will a lot of other goverment agencies.
My sandwich board company is going IPO.
Friends and Family shares to all ZH'ers.
Who is with me????
no one tries to bring down oil prices. this the moral hazard of artifically raising oil price there by creating surplus. they could not hide the surplus any longer so the price is reverting to the rightful mean. but since there was artifical pump of price there will be equall dump as an unexpected reaction. they cant tell you they do not know what they are doing. they just try to justify it to retain their illusion of control.
They won't do shit! Collect from the gubmint and drink all day in the bar is what the immediate future has for those boys. You watch too many movies!
ZerOhead
You're not alone!
Huh? I thought they were after Putin and Syria only a few days ago?
http://www.zerohedge.com/news/2015-02-03/another-conspiracy-theory-becom...
It's becoming typical for ZH: produce and publish' lot's op different opinions on the same subject covering all angles, so that a few months/years down the line with 20/20 hindsight you can always say that you were "spot on" and predicted it...
lol...its all part of the duo-inverted ISIS is us until its the Chi-Com's revealed to be the dastardly Germans hidden inside a Trojan Horse manufactured with slave labor from Bangladeshi peasants in the employ of the Koch brothers!
...and if they didn't host diverse opinnions the Tylers would be chastized for that instead? You have been given information. Make up your own damn mind and due diligence with what you wish to believe.
Develop your critical thinking abilities and have some fun!
Na, I prefer just to keep my redneck violence prone ass, laced in back woods Texas oilfield trash. As you so kindly state above.
Give me a holler if you ever visit Texas NutSack...
How do you say 'fuck off, you asshole' in 'Texican'?
As soon as the first Texican learns to speak without a dick in his ass and a bottle in his mouth, I'll let you know, LBJ.
Ah, TEXAS... where men are MEN, and sheep are SCARED...
Lol, Hope, Hope and Change!!!!!!!
How you like us now!,,????
Kisses, Bitch!!
We can't help it your bunghole is raw since "everything is bigger in Texas", darlin.
Texas may be big, but NM and CO troops kicked TX troops asses at the battle of Glorieta Pass.
The attack along the line then stalled, with the Confederates fighting by squads "with a desperation unequaled by any engagement of the war." At around 3:00 pm, the Confederates managed to outflank the Union right, but Maj. Henry Raguet, of the 4th Texas Mounted Rifles, was mortally wounded. From the ridge (known after the battle as "Sharpshooters Ridge"), the Confederates started to pick off the artillerymen and infantry below them, while Confederate Col. Scurry started to press the Union center again. This made the Union position untenable, forcing Union Col. John P. Slough to order a retreat; Lt. Col. Samuel Tappan, of the 1st Colorado, organized the companies on the left flank into a rear guard. Slough then reformed his line a half mile east of Pigeon's Ranch, where both sides skirmished until dusk. Slough retreated back to Kozlowski's Ranch, leaving Scurry in possession of the field.
Meanwhile, the leader of the New Mexican volunteers, Lt. Col. Manuel Chaves of the 2nd New Mexico Infantry, informed Chivington that his scouts had detected the Confederate supply train nearby at Johnson's Ranch. After watching them for an hour, Chivington's force descended the slope and attacked, routing or capturing the small baggage-guard with few casualties on either side. They then looted and set afire eighty supply wagons and spiked the cannon, and either killed or drove off five hundred horses and mules before returning to Kozlowski's Ranch.
With no supplies with which to sustain his advance, Scurry had no choice but to retreat to Santa Fe, the first step on the long road back to San Antonio, Texas.
The truth is that Chivington had been sent out in the hope of making a flank attack, and the discovery of the supply train was a lucky accident.
Chinga tu madre.
el mariachiiii
So was it 'redneck' or 'violence prone' that set off your violent redneck rant Tex?
And that's Mister Nutsack to you!... ;)
Wait...Redneck is a derogatory term?
While we are the topic of Texas and oil, my brother says he's seeing too-many-to-count chemical and mechanical engineers layed off in Texas.
In my opinion, that is NOT a good thing for any economy.
Please define _economy_ for those of us that don't know what an economy is anymore? Guaranteed, if you operationalize/define _economy_ you will understand why the Mechanical Engineers and Chemical Engineers are now being laid off en masse in every state in the union, and elsewhere. Moreover, I am formally trained in Mechanical Engineering and after Wall Street moved manufacturing to China everyone in North America either worked for minimum wage or they changed industries entirely and re-educated to other domains. I personally moved from Mechanical Engineering/Particle Physics to Experimental Psychology/Research, and then I declared bankruptcy,
and started smoking very BIG reefers to mellow out. The next move will be to the necropolis IMHO. Rope and razor blades are affordable.
Yes, its an opinion.
Many take everything they read as fact, wherever they read it. Due diligence is the order of the day.
But it is a Tyler opinion, not some guest post. Hence it is the ZH opinion, except for other ZH opinions that differ. The "folks" have a point - pick one and stick with it or admit you are changing position so that six months down the road you cannot claim the convenient one that happens to be most correct.
And to think the MSM accuses ZH of being biased in their news coverage...
800 gr. rounds with 14,900 ft/lbs of muzzle energy...
Due diligence: COMPLETE!
Hmmmm. I prefer 220 grn at 4200 ft second. Wapppp....
this is some serious "redneck" code talk
BIG trucks n' guns, small penis rednecks!
p.s. the code is simple to decipher.
:|
Of course I make up my own mind (that's why I pay attention when I feel I'm getting bullshitted!), but I wonder how many ZH Sheeple are swallowing this hook line and sinker. It appears as if you can tell them a different and contradicting story every day and people here believe it as if it's the Holy Gospel! It's almost like Tommy Stolper or Jimmy Cramer.
It's the same tactic as the mainstream media by the way: keep the sheeple so confused that they have no idea anymore to what's really going on.
Anyway, keep on crying "wolf" folks!
So I'll offer an alternative theory (and keep it real simple and all, so even a redneck could grasp the geopolitics...)-
1) A "mess" in Syria financed by Qatar does not promote a Qatari or Israeli pipeline through Syria to the EU. However,
2) A "mess" in Syria financed by Qatar does prohibit an Iranian pipeline through Syria to the EU.
3) Syria and Iran are pumping from the same gas resevoir system, possession is 9/10ths of the law and 10/10ths of the Profit!
Western sanctions on Iran (and continued destabilization of Syria) prevent
1) development of Iranian gas export infrastructure
2) Iran cutting into Qatar's Profit! (and market share)
3) closer ties between Iran and the EU
My alternative theory is that oil had a correction back to pre-2004 levels. Oil has been way overvalued in the past decade.
Obama already publicly admitted the move was calculated to pressure Russia back in December.
http://www.businessinsider.com/obama-putins-no-genius-2014-12
But yes... the price had been rigged until then and is rigged again now. Heck... the price is always rigged otherwise no-one would probably even know what the price was. The banks and oil companies own the ICE for a reason after all.
Hmmm. America is over $100 trillion dollars in debt!
Please, tell me who America is in debt to?
ZerOhead
the price had been rigged
Of course the prices are rigged, because the dollar is privately owned.
America is in debt to moi! Either I get my $30 Trillion with a 'T' or the whole World goes down the shitter by March 10th 2015.
p.s. I don't negotiate with terrorists, Mr. Bush.
:|
But those two theories are not mutually exclusive.
I am saying Pepe Escobar pulled a "Wrong Way Corrigan". Qatar wants Profit!, KSA loathes Tehran, and the USSA wants to maintain hegemony, the Petrodollar and the status quo by divide and conquer (none of the prerequisites are in dispute). But I am saying the outsiders hijacked what actually started as an organic domestic movement in Syria because of a completely different pipeline than alleged.
Is it not the same pipeline with an argument over where it terminates and who controls it?
In the abstract, yes, particularly since it's the same gas flowing through the pipeline or being liquefied. But in the abstract Iran and Qatar could also sing kumbayah and share a single pipeline and combines profits. One other material difference is that if Iranian Gas were to contractually exiting the fields on the Qatari side, the Iran would be in a position where it had to pay transit fees to "enemy" KSA to reach European parties, so maybe kumbayah is more likely.
Iran simply needs to reroute; via southern Russia to Southstream.
Screw the Neocon fascists and the Wahabbi scum.
I just noticed an obscene typo in the original post that actually changed the meaning if read literally (unlike my thousands of more benign typos at ZH).
The gas field (South Pars/North Dome field) straddles the border between Iran and Qatar
As far as I am aware - none of the US oil companies that have drilled North Dome currently have the slant drilling capacity to reach Syria from Qatar.
Your reading comprehension is poor. Note above the reference to Syria. China is portrayed as the opportunist here, nothing more. Try reading the article.
Bok: ZH publishing: Its called reporting without bias and giving several different points of view on the same topic.
You have forgotten your Hegel: its called the 'dialectic'.
I for one like the different perspectives. Until the event is in the rear view mirror it will not be understood. As I recall only hindsight is 20/20. The real truth is there are probably half a dozen agendas at play. History will award the prize to the winning agenda. Then what led up to the collapse will be plain as day. At this moment we are all lost in the fog of war.
Actually, amazing as it sounds, one action can have more than one consequence. As we noted in October when oil was well over $80:
And since you missed us "covering all the angles", and anticipating the very logical outcomes of one action, feel free to re-read: "If The Oil Plunge Continues, "Now May Be A Time To Panic" For US Shale Companies"
Other oil giants have been making deep cuts to their budgets and workforce, as well.
On Feb. 5, Weatherford International PLC (NYSE: WFT) announced it would cut 8,000 jobs, mostly in the U.S.
BP (NYSE: BP) announced a 20 percent cut to its 2015 capital expenditures, dropping from its previous guidance of about $25 billion to $20 billion.
Oilfield services competitors like Schlumberger Ltd. (NYSE: SLB) and Baker Hughes Inc. (NYSE: BHI) are cutting 9,000 and 7,000 jobs, respectively.
http://www.bizjournals.com/houston/morning_call/2015/02/statoil-to-cut-2...
Yep, typical.
While all the while I have called for deflation and the decline in most commodities including PMs. No change in my position. I'll let you all scramble around for excuses and reasons.
The Saudis need a better PR firm. They're trying to screw everybody.
$100 oil....ROFL!!
NEVER AGAIN
I hope that you are writing satire.
Never say never.
It will happen sooner than you will imagine and that I am almost certain about.
The trust in Shale Oil will be so eroded that investors will be hesitant to reinvest in the Shale plays.
The oversupply inventory will be burned up, especially during the next planned war. Demand will subsequently increase due to that planned war. And the once burned, twice shy, investors will still not invest in the Shale Plays until prices skyrocket and their greed overcomes their fear.
Your Oil Corporations, along with your Central Bankers, have this all planned out in order to burn up the overstock and create a demand which will spike Oil prices even during the depths of an Economic Depression.
War Is A Racket. You had best read Smedley Butler, or refresh your memory, so that you refrain from using the word, "never".
too late
The Pentagon already called dibs on the rest of shale oil. Or did they call shotgun? Whatever.This country is so tired of war, we gave up even talking about it any more.
carpenter : oil will go up and back to such level and far upper very soon....
this low value was a failed temptative, they lost money, they have to get theloose back... i hammer that for months now, around march it will go back to stable financial state, and for summer go back to 100+.
you will see. if you check prices it already come back around 60....
this is so predictable.
Whom is screwing whom?
The USA made a DEAL with the Saudis, way back in 1973, that we would not burn our domestically produced Oil. That is the reason why Prudhoe Bay production was exported to Japan.
Whom broke the deal?
And don't think of the shale industry as crushed.
Just think of it as put aside for the 'rainy days' of America's senior years.
PPO. (post peak oil)
audit the fed
http://thehill.com/policy/finance/231822-fed-fires-back
A real audit would end the FED and so the FED will never allow it.
get rid of the fed and hello imf sdr. which means harsh devaluation on top of inflation. ron paul is a false hero. Lets see him propose a silver certificate. Kennedy got shot doing that, it is king dollar, then maybe sdr. whats the rush?
I know it sounds impossible, but it's worth a shot. Republicans have 101 reasons to get behind it and they are.
Consider this:
They know the FED is hated by Americans, so it's good politics.
They know the market needs to crash on Obama's watch.
They'd dearly love to expose the FED and its misdeeds before the public, guaranteeing a market crash on Obama's watch, and being seen as the good guys. The alternative? It blows up on their watch. Trust me when I say this, politicians will cut off their arm to be popular. They'll do everything in their power to have this all implode in their favor.
END THE FED, AUDIT THE FED.
It can be done.
The FED will be replaced by a command monetary computer. A central authority will decree what your bank account reads. Most likely everyone will get some cash written in each month, for pacification, and any excess trimmed off. All digital of course. The IRS will be replaced too by a program in the same computer.
Your problem is that the bank already has your money.
Nah, my debt exceeds any deposits. I could only pray for a banking failure.
It don't really work that way any more, someone would buy up your bankrupt bank and still try to get the money perhaps with more aggressive tactics since they have no personal relationship with you as you had with your previous lender. You know call in debt at full, take possessions, a whole host of nasty things which end up costing society more just with the legal expenses of it all. And then you are still required to compete for day to day survival with the completely insane ones who lent money in the first place hoping todays new math would have you believe it was the right thing to do, when if fact, it was illegal.
If a real audit is allowed you know the Ponzi is over and they need someone to blame it on.
Nice theory, however I see one little problem with it ! China, being an evil commie country and all that, DOESN'T CARE about the marginal oil price in their oil production. Once it is decided by TPTB that an oil industry has to be developed (either to help attain energy independence, or to help create local technological know how, or just to keep a bunch of people busy), they'll do it regardless of costs (since they can print money freely, too... and a future reserve currency that is). After all, this is the same country where a whole bunch of empty cities have been built (and kept empty...) just to give some work to a small part of its population. Chinese investment expenses over the last 6 years put the Japanese "stimulus" of the last 2 decades to shame. If they really want a local oil industry and production, they'll have it regardless of any KSA maneuvering ! Incidentally, being probably the biggest welfare state in the world (as % of population), KSA cannot affort a low price for oil for too long, since it will wreak havoc with its buget, fully dependent on oil REVENUE...
Don't worry, hot money can only last but so long and eventually we are going to feel that hammer blow of global hyperinflation.
Nobody can mis-allocate capital like the Chinese!
We Americans are #1 at that!
Cartoon Network? Don't sell those meddling kids short
SI Swimsuit follows Nationwide's strategy: hey, let's piss everybody off!
http://tinyurl.com/l55zd7h
Lost me after,
one thing is clear: the Saudis will not relent from pumping more oil into the market
They (Saudi) are pumping the same, hell even if they wanted to they have no spare capacity only on paper.
http://ycharts.com/indicators/saudi_arabia_crude_oil_production
Maybe Barcap, JPM and Goldman are no longer actively trading and physical supply is available in the here and now
Correct, as noted before here:
However it is collateral damage that the Saudis will gladly take advantage of, and once the local funding for US shale dries out, it will be the Chinese who are providing it (just in case anyone needs cliff notes)
let the dumb chinese money follow the junk bond money. all this supposed money is headed to zero anyway.
Panama is the biggest winner of the global slowdown in oily commodities drip. What, no one saw the move "A Canal Runs Through It"?
That depends on how much time it takes them to fix the mess or just hit the Reset/ Rinse, Repeat button. If they drag this out until the Nicarague Canal Runs Through It, there will a lot more people and opportunities along the larger and longer canal, and cannibalization of the heretofore bliss along the Panama toll road.
I don’t even know where to start….. But let’s take shot at it
“Saudi Arabia has insisted that OPEC will keep oil production at 30 million barrels per day no matter the cost of crude…” http://www.cnbc.com/id/102295985
Now, if you look at OPEC-12 (nations), they are all showing production decline. http://peakoilbarrel.com/opec-november-crude-production-numbers/
Then, when you look at the second chart, OPEC-12 is exactly at 30 million barrels oil at $100 dollars a barrel.
However, when you look at the last time the price of oil went down (2009, to an average of $53 dollars a barrel) OPEC-12 oil, which is supposed to be the least expensive oil to extract worldwide, collapsed by 3 million barrels a day. http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp
Key Point
A- OPEC-12 lowering oil prices will hurt them more than the shale oil in America because shale, unlikely, will never be able to produce 3 million barrels a day.
Also, OPEC-12 oil profits take care of the needs of these 12 nations. Shale takes care of the needs of the 1% class in America, because it’s privately owned, instead of state own.
Wonder why the nation (America) is bankrupted. There might be one of the reasons.
B- Also, SHALE (butane and ethane) IS NOT oil.
Fuck brah, don't point out the actual facts about OPEC numbers. These will only come to light and be posted by the Tylers when oil has spiked and they've flipped over to start posting $200 barrel articles and how the black stuff is running out.
We couldn't afford $100 dollars oil.
Anyway, the real problem with $200 dollars oil is for urban life. Rural poverty is bad. But, urban poverty will be very destabilizing.
I call on all those whom wish to weaken the urban behive and their gov't protectors move to the country and share your wealth with those who are the true disenfranchised, forgotten, and villiafied by the Progs of the DemPublican party.
Destabilizing?
That doesnt sound very bullish.
Destabilizing?
That doesnt sound very bullish.
Fuck that noise, I got to be gettin paid.
http://kzgroup.ru/eng/s/12/historical_note.html
When a crowd reaches a high enough density, revolution breeds.
Irony and the vicious cycle.
Expensive oil in urban centers certainly breeds instability, but urban centers actually have options to increase their efficiency and decrease their per-capita consumption.
Moreover, urban centers are impossible to maintain without a viable rural host to provide and absorb what the urban center must consume and excrete.
Unfortunately, rural per-capita oil consumption MUST be much higher than urban consumption, if the rural division of society is to perform its function and maintain balance in the ecosystem.
Therefore, in order sustain itself, either the redneck needs a much higher income than the metrosexual to pay for higher oil consumption, or the metrosexual needs to subsidize the redneck's higher oil consumption.
Otherwise, collapse and destabilization are inevitable, on a long enough timeline.
Society is incapable of making that Choice, and a Statist is incapable of making a choice that benefits Society
Excellent research imho. But to be honest, who really gives a shit. Let oil blow up to 250 a bbl. Let the liberal technocrats suck some meat for gas money. At that point, the hated, evil oil clan will be doing well while the free shit army has to wear knee pads to travel.
Plus +100 on your post. But actual knowledge in the oilfield who has worked hard and fast to curb the oil shock price demand, is sick of the evil oil assholes verbiage, we who tried to curb the shock that is coming to the rats. Let the price demand take full effect combined with horrible monetary policy.
Keep stacking. We all are.
B- Also, SHALE (butane and ethane) IS NOT oil.
Who told you that was the content of shale? Shale does produce very high API oil and the other two products you mention are gotten from processing the gas which is wet. A good LTO well produces over 500 bbl/day oil and around 60,000 mcf/day of wet gas. Two entirely different products sent to two entirely different buyers.
Der bill be blood.
Der bill.
I'll take Kardashian History fo r$ 500.00.
lol...the Wahabis vs the Chi-Coms.
The NYT's is completely appalled and demands a name change!
Bankrupt everyone else, buy them, lower production and raise price. Simple economics. When you run out, you still own them.
xavi1951
Simple economics....
So, this should help:
“Politics and economics, nouns. Both strife of interests masquerading as a contest of principles” — Ambrose Bierce
Has anyone considered that the shale damage is the reason for the oil prices declining to stop those mofos out? Shale and fracking will ruin the planet for those who have a stake in it and that is the reason for the shale shakeout. Not greenpeace here...just have a clue about who is calling the correct shots now in greasy.
'
Ruin the planet? I thought coal and cow methane already took that Sierra Club award.
I thought it was SUVs that were destroying the planet. Is there an App for keeping up with this?
Yeah Hummers in particular. I remember when we lived in DC, a Hummer owner living within the beltway reported repeated vandalism to his vehicle. You know what, posters on the WashCompost article actually cheered the vandalism. This is the Obamanation.
Hope, Hope and Change!!!!
Ruining aquifers.
The export terminals at Ras Tanura on the Persian Gulf are among the largest in the world. ......
The Saudi oil infrastructure is the largest in the world. The major Saudi export terminals are at Ras Tanura and Juaymah, ... The ports are Saudi Arabia's oil export Achilles heel; furthermore, while the kingdom has around eighty oil and gas fields, more than half of the country's reserves are concentrated in only eight fields, while the huge processing complex at Abqaiq handles about two-thirds of the country's oil output. This gigantism produces an economy of scale, but the concentration makes it highly susceptible to terrorist attack.
It would be a shame if something happened to these assets, don't you think?
I think there are at least six espionage fiction novels that start out with that scenario.
The best one is the one where Putin stages a false flag attack on the terminals and everyone thinks it was ISIS because they find some more of those fire resistant Jihadi passports once the oil fires have been finally put out.
Cha-ching!!!
What a fragile area of the planet. One thin thread of a pipeline to feed all those ships. And one MOAB could take the whole thing out in an instant.
MOAB - Mother Of All Bombs - 18,000 pounds of fuel-air explosive - puts a Daisy-Cutter to shame.
https://www.youtube.com/watch?v=HsQdeAeOEg4
The MOABs are better suited against villages or troop concentrations. The burst is wide and lasting, but not that powerful.
How about ending the ethanol subsidies instead of shutting down active wells? But that would make food cheaper and we can't allow that, can we?!
Well yes but the stakeholders/partners of the DOE, EPA, Congress and the WH would lose so much money on their joint venture.
falconflight
These are symptoms. Private money is the real problem.
Wrong IMO. Horrible monetary policy, liberal technocrats, crony capitalism, breeched socialism come to mind at first glance.
Hope, Hope and Change!!!! Till we get to 250 a BBL.
You mean campaign contributions? I submit that public money is the real problem.
"Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. ... Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile." -- Mackenzie King, Canadian Prime Minister 1935-1948.
Teamtc321
Horrible monetary policy, liberal technocrats, crony capitalism, breeched socialism
falconflight
You mean campaign contributions?
Team and Falcon,
I don’t mean either one.
Here’s what I mean: Sovereign Money (treasury money) instead of credit-money (by private banking cartel).
http://sovereignmoney.eu/
Here’s an example:
Debt Free & Interest Free Money
https://www.youtube.com/watch?v=zIkk7AfYymg“#t=0m23s”
Ah, my bad. I followed the wrong direction. Thanks for the clarification.