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$20 Oil? Goldman Says It's Possible
We’ve long framed collapsing crude prices as a battle between the Saudis and the Fed.
When Saudi Arabia killed the petrodollar late last year in a bid to bankrupt the US shale space and secure a bit of leverage over the Russians, the kingdom may or may not have fully understood the power of ZIRP and the implications that power had for struggling US producers. Thanks to the fact that ultra accommodative Fed policy has left capital markets wide open, the US shale space has managed to stay in business far longer than would otherwise have been possible in the face of slumping crude. That’s bad news for the Saudis who, after burning through tens of billions in FX reserves to help plug a yawning budget gap, have now resorted to tapping the very same accommodative debt markets that are keeping their competition in business as a fiscal deficit on the order of 20% of GDP looms large.
But even with a gaping hole in the budget and an expensive proxy war raging in Yemen, it’s not all bad news for Saudi Arabia as evidenced by King Salman’s lavish Mercedes procession upon arrival in DC last week and as evidenced by the fact that, as The Telegraph reports, non-cartel output is beginning to fold under the pressure of low prices. Here’s more:
Oil produced outside the Orgainsation of the Petroleum Exporting Countries (Opec) is slowing at its fastest rate in 20 years as lower prices hit higher cost producers such as the North Sea and US shale drillers, a leading energy think tank has warned.
The Paris-based International Energy Agency (IEA) has said that lower production in the US, Russia and the North Sea would result in output outside Opec dropping to 57.7m barrels per day (bpd) in 2016. The majority of the declines would come from US light crude, which is expected to decline by 400,000 bpd.
"The steep declines in US crude oil production seen since the end of June has created some optimism that we are now finally seeing that start of a steep decline," said Bjarne Schieldrop, chief commodities analyst at SEB.
Oil prices have plunged 50pc this year with Brent crude trading well below $50 per barrel, a level which makes it uneconomical for many producers. Opec, under pressure from Saudi Arabia, has allowed oil prices to fall in an effort to protect its shrinking market share especially from the rise of shale oil drillers in the US.
So mission (partially) accomplished we suppose, and with banks set to reevaluate credit lines to US producers next month (i.e. the revolver raids are coming), it likely won’t be long before the competition starts to dry up. The only remaining question then, is how low will oil go in the near- and medium-term and on that point we go to Goldman for more:
Oil prices have declined sharply over the past month to our $45/bbl WTI Fall forecast. While this decline was precipitated by macro concerns, it was warranted in our view by weak fundamentals. In fact, the oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth, with risks skewed to even weaker demand given China’s slowdown and its negative EM feedback loop.
So a persistent global deflationary supply glut driven by lackluster demand. Nothing new there, and in fact, that exact confluence of factors was tipped to send oil to $25 in these very pages more than nine months ago. Now back to Goldman:
Given our updated forecast for a more oversupplied oil market in 2016, we are lowering our oil price forecast once again. Our new 1-, 3-, 6- and 12-mo WTI oil price forecast are $38/bbl, $42/bbl, $40/bbl and $45/bbl. Our 2016 forecast is $45/bbl vs. $57/bbl previously and forwards at $51/bbl. As we continue to view US shale as the likely near-term source of supply adjustment given the short cycle nature of shale production, we forecast that US Lower 48 crude & NGL production will decline by 585 kb/d in 2016 with other non-OPEC supply down 220 kb/d to end the oversupply by 4Q16.
Got it. And just how low, in a worst case scenario, could crude go?
This creates the risk that a slowdown in US production takes place too late or not at all, forcing oil markets to balance elsewhere or as they have historically cleared, through a collapse to production costs once the surplus breaches logistical and storage capacity. Net, while we are increasingly convinced that the market needs to see lower oil prices for longer to achieve a production cut, the source of this production decline and its forcing mechanism is growing more uncertain, raising the possibility that we may ultimately clear at a sharply lower price with cash costs around $20/bbl Brent prices, on our estimates. While such a drop would prove transient and help to immediately rebalance the supply and demand for barrels, it would likely do little for the longer-term capital imbalance in the market with only lower prices for longer rebalancing the capital markets for energy.
So there you have it, a collapse to $20 Brent, but while the Saudis may have won the battle, the war is not yet over:
The levers to force HY producers into lower production, such as borrowing basis redeterminations, debt maturities and hedge coverage, are significantly less binding for IG E&Ps. It is instead management’s focus on balancing capex and cash flow and investors’ willingness to finance funding gaps that are the levers of adjustments for this cohort of companies. And while HY debt markets may be once again shutting, tentative signs of greater discipline by US IG E&Ps have so far only translated in stabilizing production guidance rather than pointing to the decline that our global oil balance requires.
As a result, the sharp intensification in producer financial stress observed recently – with forward oil prices and energy equity share prices at multi-year lows (and credit spreads at highs) – is unlikely to yield sufficient financial stress in the short-term. So while this deterioration in financial conditions is finally reflecting the markets’ decreasing confidence in a quick rebound in prices and a recognition that the rebalancing of supply and demand will likely prove to be far more difficult than previously expected, we now believe that such stress needs to remain in place well into 2016 and up until evidence emerges that US shale production growth is actually required.
And speaking of war, the obvious risk to any forecast that calls for sharply lower crude is that some mid-air "accident" in Syria takes the "proxy" out of "proxy war", in which case crude soars as Russia and Iran square off against a US coalition that would swiftly include Saudi Arabia in what would very likely be the precursor to a wider conflict the scope of which we haven't seen since 1939.
Oh, and for all the muppets out there, Goldman has upgraded European oil producers:
Dividends may be cut, but with over coverage now yielding 6% on average this is becoming priced in. We expect returns and FCF to trough in 2016, and improve in 2017/18 driven by higher oil prices and falling costs. Even with this, valuations do not yet look compelling, but we move to a Neutral Coverage View from Cautious.
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Makes perfect sense with Iran and Russia massing in Syria. Fuck GS!
Is Obama a kenyan Oilman? That would explain why heating oil is still $3.59 a gallon, higher than under Bush.....
Why doesn't the socialist jew media blame Obama for the price of oil, like they did with Bush?
I dont know what blah blah blah is Goldman taling about...
But I had predicted oil price to be below $30 on Dec 23rd 2014 that I published as a comment on Dec 26, 2014 here on ZH.
http://www.zerohedge.com/news/2014-12-26/saudi-arabia-ready-20-30-40-oil...
Rest as they say, is history. Oil will remain down and keep going down. We shall see $20 before we will see $60 on the WTI.
Lot of people had debated with me and I am happy to continue that debate with anyone....with regard to Saudi or oil or ....
It began wih the Saudis and OPEC bringing price down that has now backfired. Now, US has the upperhand being insulated from imports of oil from other nations. Last few months, US has been driving the price down.
Whether it is Saudi vs USA or USA Vs Saudi, it still remains one against the other! And, when the titans fight/fall, it hurts EVERBODY else.
Ha ya I said 25 way back then too. Still wouldn't be surprised. Sure the Middle East is increasingly unstable, but demand is dropping since the depression is starting to reveal itself.
Exactly, these momentum swings are starting to increase volatility but you simply can't override the current deflationary forces at work worldwide right now........oil will certainly bottom at some point but that may be alot lower than most people think. When oil looks like it's headed back to $10 and everyone is all in shorting it is when you'll likely see the bottom but at current pace that could be a while.
Well, GS also predicted $200 oil in 2008: http://www.nytimes.com/2008/05/21/business/21oil.html?_r=0
GS is wrong. Oil will actually fall below 20 dollars--especially when the FED raises rates. The deflationary pressures are beyond belief. The party is finally over.
A funny aside. At the 2012(?) Herzliya Israel Security conference, there was an invitiation-only closed session about oil pricing, attended by oil majors, certainly BP. The topic was: "If oil goes to $250 / barrel, should Israel sell or keep its reserves?"
It's good to see some blowback for the Zionist ambitions.
when the titans fight/fall, it hurts EVERBODY else.
Russia?
Yes them too.
But they have friends in Syria, Iran, Pakistan, Kazakhstan, Tajakistan and China who support them with billions of dollars in deals. Saudi too has become friends with Russia and has given them a cheque of USD 10bn plus 16 nuclear reactor to make in Saudi and talking oil in yuan with Moscow and Beijing.
And ....who are friends of your country?
I don't need oil or gas anymore; I simply maintain my bicycle tires in good shape. Keeps me in shape at the same time!
that might be one of the most idiotic things I have seen all month...
YOUR FUCKING BICYCLE TIRES ARE MADE FROM OIL YOU STUPID FUCK
Your smartphone and computer need oil to make the PCB and plastic case. If you buy your food from the market, that food was transported there by trucks that run on diesel.
Sun, you're assuming this guy has a clue in hell. Not only was the food transported there by diesel but it was likely harvested and moved by diesel as well. Of course, at some point it was likely cooled by electricity which was likely sourced from hydrocarbons. But, let's not get in front of ourselves, Bernie Sanders, I mean, Handful of Dust probably doesn't even know what the difference between oil and gas is. He probably thinks that gas is what you put in your car and oil is for **crickets**. If he understood that "gas" represented a gaseous natural gas (like ethane and methane) then he wouldn't have been so retarded as to say that by riding a bike he can avoid "gas".. which makes no sense. My bet is that he has a gas stove but just has never though about it that hard and, quite clearly, has no job involving financial anything.
We just know it's satire.
Nah, he's just a prepper.
or his gas home heater or the natural gas power plant his electricity comes from or.........................etc etc
ISIS
http://www.bizjournals.com/houston/news/2015/09/08/cameron-to-cut-housto...
Moar joblessness is very bullish in Econ 101, 2015-style.
Wrong. $20/bbl isn't possible.
At $34/bbl, it costs $1 to produce oil at the cheapest wellheads.
Meanwhile, producers have stopped nearly all E&P operations. Any wells being drilled are pre-drop contracts where there is a penalty for not drilling, and over half of all current production is the result of contractual production quotas. The rest is byproduct from NG production.
At $33 production will cease abruptly and contractual quotas will be barred from enforcement by bankruptcy courts.
The price will continue to drop - inertia - to around $30, then it wil start rising. Production will lag, so the price will swing past the $150/bbl mark, and thrash wildly until production again meets demand.
Keynes: Markets can remain irrational longer than you can remain solvent.
Producers aren't solvent at $44/bbl.
They're operating on credit.
As long as the credit line is open, they will continue to produce and sell oil unless you think the roughnecks will start doing lapdances for money
THey get to make money out of nothing, you get to trade your life for it.
Back to work CHUMP.
RIPS
But even I can borrow money at .5% per annum. This could go on forever.
Tell that story to the Gold Miners.
LMAO.
You do not understand Futures Markets.
Nobody wrote that it will remain at $20 for any long term time frame.
2016 will turn out to be a HYPERINFLATIONARY INFERNO. The US Dollar will be abandoned after the loss of WRC. The USD held in Foreign Vaults will flood our shores.
Don't be too concerned. I forecast $1000 Oil...that is right...ONE THOUSAND Oil, oh... by late summer 2016.
But it will see $20 first.
But when Oil is at $1000 then good luck paying $50/Gallon on Gasoline.
If oil goes to $1000/bbl as you predict, would you expect to see a concurrent rise in gold/silver and any other commodities pricing? At such a point, I presume that holding cigarettes, liquor, ammo, food and other base necessities will be the wise thing to be doing.
"Hyper inflationary inferno..."
Wow...them some words.
I do believe we'll see hyperinflation, I'm just not sure when. We also do seem to be itching for a diversionary war, and probably, a big one. Helluva lot of pent up anger and hostility in a lot of places. Could suck half the planet (again) or more into it too. The difference this time, is that it'll be very hard to sign up the doughboys to do the fighting. Few are up for that anymore. That's why it may stay satellite, air, and maybe nuclear somewhere. Conventional is all but out.
But this oil business, like other commodities, MAY see an upswing as demand decline cancels excess supply to a point where demand actually is. I doubt, though, it'll stay up long. Demand decline is huge. Much bigger than the T. Boone Pickens' on this rock understand.
Talk about your falling knife.
This is a falling, razor-sharp, samurai sword...
But, the "inferno" you mention draws a macabre chuckle, I must admit.
m
This is an interesting MAYBE:
"But this oil business, like other commodities, MAY see an upswing as demand decline cancels excess supply to a point where demand actually is."
Could be a good crapshoot to sell stawks that were purchased dirt cheap during the decline...
frackers are said to be breaking even in the $75-78 range ....
it's gotta be hurting that line of credit - but maybe there is a direct line to the free money the banksters are getting and they're passing along @ no to little interest ?
Oil can go below cost of production, it happens all the time in all sorts of products. Just because you start losing money doesn't mean you are instatntly out of business. Oil you are selling still provides operating revenue and cash flow, it is at the end of the year when you do your accounting that you realize you came out in the red. Small or overleveraged companies, and a whole lot of speculators will be hit instantly, perhaps.
So I guess you are right, cannot be below $33/bbl, for a long time.
Oil companies will simply carry a operating loss and get subsidized by the USGOV.
No biggie.
Oil companies are already seeking subsidies now that their credit is drying up.
All of the little guys who were already in debt are folding, and the big players (who own transport infrastructure) are slapping the other producers with over-production fees.
It could go lower than my estimate, but it will never go to $20. $200 maybe.
Funny how people still think oil could go to $200. The global economy is on the brink of depression and gas will be at $8? LMAO!!! There's more chance of beef at $50
14 oz. Kobi steak in Vegas is $ 140.
Now I know that I am emphsizing price over value on the beef side, but with oil the value is fully distributed. All segments of our economic world are joined by the demand. The lure of price controls or nationalization will be strong should production take a dive. As the Venezuelans have learned it is no benefit to be able to buy toilet paper at a low price if there is none to be had.
Exactly...I'm a farmer, and we're there now...producing below COP.....but there is a limit to how long you can do it before the gavel comes down...just saying.
speaking of us gov, never forget that both gas and food would be cheaper if it wasn;t for the govt meddling in the market. Ethanol bullshit makes gas more expensive and also has less energy, and using corn to make moonshine to mix with our gas makes all food more expensive.
Refer to prior depression:
http://www.bloombergview.com/articles/2013-05-06/when-the-great-depressi...
Damn, you nailed it!
Yeah. I know, DubaiBanker. I have called for $20 Oil and forecast for that price in November many times on these pages.
I guess that Goldman Sachs may actually read Zerohedge?
A planned circumstance as in a hot war with Iran and Yemen, which will close off the chokepoints of the Persian Gulf and the Red Sea, will alter my forecast. Other than that I can see no mechanism for anything else to change the trend.
But Market Collapses have a way of depressing demand and thus corresponding prices. Both the Saudi Welfare State and the USSA will be damaged by this.
Obama should NOT BREAK TREATIES. Fracking needed NOT to have been allowed as it violated the King Faisal/Kissinger Agreement which created the Petrodollar in the first place.
As a result of the violation the USSA will lose World Reserve Currency status. Of course the Rule of Law is abandoned for expedience's sake. Treaties are on the same tier as US Constitutional Law...They are supprosed to be superior...supreme.
But nobody thinks long term and everybody in the USSA wanted cheap fuel prices to continue. This is the result.
The is a false idea going around that the prices of crude oil and other refined energy sources are correlated. One must remeber that gasoline and kerosine use must be made more expensive to promote alternative energy products.
Nobody wants a world where gas goes below a dollar, just a hand full of American exceptionalists who want to go back to a day when they could drive their big block hemis and blow all their fuel rich excess out their tailpipes. Sorry folks, that day is long gone.
Well I do agree. Alternative energy products are uneconomical and only survive when Government steals from users and producers of oil, coal, and natural gas.
thats actually exactly what I want. I don't have a hemi, but I do have a V8, and I get 14 mpg. fuck off.
Whatever, I hide behind my guns, religion, and my hemi.
only one of those is going to protect you and it ain't the dodge
https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States
The fuel is free you just pay the tax.
I choose door #1 Bob.
What do I win?
Correct Sir,
Different markets. Diesel fuel had been running higher than gas the last few years, now it is quite a bit lower. As gas jumps up lately I notice diesel is a much slower moving market, it eventually folows, but much more slowly.
I should think it is cheaper than gas now because of the hidden recession and its deflationary effects.
I never really understood that gas and diesel were two separate markets until I owned a Passat TDI, but they are quite separate.
Fuck the rest of the world. They didn't build the US.
I've been seeing more SUVs and big trucks out there the past year. People are more stupid than you think.
I've thought that too, I'm in the SF Bay Area and the second gas prices dropped more people hit the roads in V-8 Trucks and SUVs.
The increase was noticeable.
No, but his handlers are.
goldman has no fuckin idea where oil is going. they were predicting $200 oil two years ago
They missed a zero actually! Ahem! :)
They are good in fucking people too! :)
They naturally want it to go where their futures will be in the money.
They are delusional sociopaths, what else would you expect?
yeah, they were, when they had an iron fist grip on the supply chain in Europe and could take advantage of the Brent peak to drive prices to... the... moon...
that little play at ICE got its back broken July of last year... this is the result...
If Oil gets to $20 I'm buying a virtual oil well
If you can write code, I'd be willing to develop BitOil with you.
We just need some rube to front us the money....
Can't wait to buy a car that takes BitGas
we have moar billionaires than ever. they should be well pleased. disaster crapitalism. pump and dump. thanks to ben and janet the econOme SUCKS AND THEY STILL get richer.
If Geitner would have allowed me to convert to a "Bank" and get endless free money from the Fed window for years I could have become a Billionaire also. But he and Hank only chose their close buddies at GS and a handful of other places.
That's why it's crazy seeing these rioters burn down their own neighborhoods...they vent their rage at the wrong people and wrong places.
if you want to be a billionaire don't bother trying to produce anything. use leverage, push crap paper, speculate, rob, steal, defraud, exploit, destroy shit. that's the road to the big money bitchez.
Never been an empire (state or individual) that wasn't built on the backs of stolen labor.
Can you imagine how long and hard a road it would be to actually build a fortune on production, sales, profit and capex?
You're talking like.....a lifetime, man!
Who has time for that?
Wanna buy some carbon credits? I can set you up with a margin loan!
Whatever the fuck Goldmann says you should always take the other side of that trade.
What he said^^^^^^
Any mans, feins, bergs, or itzes.....for that matter
You leave on the on? I feel slighted.
$20 oil will be a lot cheaper than the $10 oil in 1986 (inflation-adjusted) that broke up the Soviet Union. The fall in oil prices from $115 last year to $47.50 today has all the hallmarks of an oil slam engineered by the US in collusion with Saudi Arabia as it was in the mid 1980s.
There is always an economic war going on.
Think about how the Obama administration sees the state of the world. It wants Tehran to come to heel over its nuclear programme. It wants Vladimir Putin to back off in eastern Ukraine. But after recent experiences in Iraq and Afghanistan, the White House has no desire to put American boots on the ground. Instead, with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.
John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.
http://www.theguardian.com/business/economics-blog/2014/nov/09/us-iran-r...
Did the U.S. and the Saudis Conspire to Push Down Oil Prices?http://www.globalresearch.ca/did-the-u-s-and-the-saudis-conspire-to-push...
One which the west can not win, but never stops trying or convincing themselves that they can.
thanks, indeed america + Saudi makes much more sense than america vs saudi
If Saudi was still in bed with America, they would not give USD 10 bn cheque to Putin. http://www.bloombergview.com/articles/2015-07-07/the-saudis-are-cozying-...
Nor would they sign 16 nuclear reactor deal with Putin. http://www.timesofisrael.com/saudis-said-set-to-build-16-nuclear-reactor...
And they would not be in Moscow talking Syria and talking of oil trading in yuan. http://www.worldbulletin.net/haber/163345/moscow-to-host-top-level-talks...
That's not what friends do!
Just sayin'
you don't see the entire picture here. Very recently, Saudi Arabia officially asked Russia to join OPEC and to decide the prices together. Russia politely refused. This means that Russia thinks it can take it (and win this war of lower prices). Another Putin's move: it was announced that Russia will once more increase its oil sales to China. And since China does not need so much oil due to the recent economic troubles, it is very logical that China will offset this "help to Russia" by decreasing its purchase of oil from Saudi Arabia, who is not such a good friend as Russia after all.
This will be a wild ride, but much more for Saudis than for Russia.
You are completely right. I did not factor in, that if China buys more oil from Russia, that who will be the loser? Saudi becomes the biggest loser.
Here are some links to understand this trend:
Russia Pips Saudi Arabia in Race to Grab China Oil Market Sharehttp://www.bloomberg.com/news/articles/2015-06-23/russia-pips-saudi-arab...
Just in 2014, Russia incerased dramatically while Saudi stagnated and shold be lower again in 2015.
The following table shows the latest data for Chinese crude oil imports by country:
http://topforeignstocks.com/2015/02/18/chinese-crude-oil-imports-by-coun...
This is a great overview:
WITH CHINA CRASH, SAUDI ARABIA HEMORRHAGING CASHhttp://www.breitbart.com/big-government/2015/08/14/with-china-crash-saud...
Just wait until Russia starts playing the "insurgency game" in the house of Saud. They can easily finance some revolutionary group that will start taking out the kingdom's oil infrastructure.
That would me oil markets very interesting to watch.
..and very painful at the pump
Great Post, and dont forget the collateral benefit to the Obama Administration. It gets a big win for its environmentalist base by crushing the US fracking industry. Much easier to crush them with low prices then stir up the politics with tougher regulations or changing laws. Its been a win/win all around punish the Russians, roll back the fracking industry, and cause chaos in the emerging market oil states Venezuela, Brazil etc.
Major General Smedley Darlington Butler.
That book is on my gift list this Christmas. Probably the best way to reveal the MIC to friends and family.
https://www.youtube.com/watch?v=XAHg3yOBJ1o
HA!
The oil may cost $20 per barrel to purchase but most will cost way more than that to produce.
You don't mind spinning the wheel and coming up green now do ya?
does this mean the bottom is in?
ive heard it argued that a lot of the shale producers had hedges in at $80-$100 and that the banks had taken the other side of the bet and that the fed has been doing stealth QE to cover the banks massive losses.
with escalation in yemen and the syrian proxy war and with iran now coming into the syrian mix dont we have a perfect storm for skyrocketing oil? are the cocksuckers at GS trying to fleece the muppets once more?
.
But...But we got that terrorist osama bin ladin.. I saw videos of him and his men in the mountains running drills in full robes...running over small fires, and through old tires and swinging from ropes. Then...i saw him shoot a rifle! if that isn't proof of his guilt then surely the movie that hollywood made about him and our brave and smart soldiers GOT HIM must convince you of the FACTS!
man i was editing my comment and managed to delete it. in summary, fuck the neocons/pnac cocksuckers and remember to honor those who died 14 years ago this day by reminding our fellow sheeple the uncomfortable truth that the official story is horseshit. dont let their collective cognative dissonance and open hostility deter you, one day we'll get a majority out of plato's cave and the real perpaTraitors will be held responsible.
From my read of it, they're saying the bottom is in 2016.
As oil is the worlds largest traded commodity it's only a matter of time before the 'addicted' US folds up completely - the 'easy' oil is drying up rapidly otherwise they wouldn't be fracking !! 99.2 % of hydraulic 'fracturing' is water - it's the .08 % of lethal chemicals you should be worried about - ONE drop of plutonium in a bucket of water will kill you - You do the MATH !
What lethal chemicals? You sound like a liar for leaving that part out. Do you have a source other than the socialist ZioJew media?
Comparing the 0.8% to plutonium proves what an uninformned assclown you are.
Like TongueStun said, proof or it didnt happen.
If you can find out what is in the .08% Dickhead ! Then tell me !! Because THAT information has remained CLASSIFIED ! Rumors are that it contains radioactive waste - Just like your SMOKE ALARM ! But i obviously have to FUCKING tell you everything !
Rumors are you're from Mars. They use plenty of dangerous chemicals, but to use radioactive waste, you would see people walking around in bright rubber and lead suits. The DOE doesn't just let anyone get a hold of radioactive waste and transport it around the country. Why would the frackers go through that extra expense? How would radioactive waste help them extract more oil?
I didn't say radio active waste was used to EXTRACT oil ! - Halliburton uses fracking to get rid of radio active waste - they have been doing it since the 60s - So drink up Dickhead ! Cheers !
sun tzu
Filter socks are the nets that strain liquids in the oil production process.
The radioactivity is naturally occurring and concentrates on such items as filters, pipes and tank sludge.
http://fuelfix.com/blog/2015/03/12/improperly-disposed-radioactive-oil-f...
http://drcinfo.org/2015/03/03/oil-prices-collapse-north-dakota-considers...
http://bismarcktribune.com/bakken/state-aims-to-lift-ban-on-radioactive-...
You know if you are wrong about that it's do onto others as you would have others do onto you, right, me thinky you did'nt.
oil is the worlds largest traded commodity
Nope. It is illegal dope.
I foresee a ZH post in the next week w/ a picture of Kermit gutted and oil ripping higher
So $200 it is. ....... Got it.
Yeah we booked it, hope you did'nt miss it.
No, it's $2000 and gas will be $200/gal. People will continue to use the same amount when prices increase because the fairy godmother will put money into their bank account.
My car might need a quart today.
I set my alarm for $10.
Oil at $20 and silver at $500 - uh huh.......I'm done waiting.
ZH crude oil articles are one of my favorite topics because of the awesome rationalizations those articles elicit, e.g., fracking took place because "fossil fuels" are getting harder to extract, or extracting oil from mature wells with long since paided-back capital equipment is expensive. Don't even get me started on the "proof" of fermenting sauces of Mesozoic life. More fun than a barrel of monkeys on a Saturday night!
<$10/barrel, <20 years
Your delusions are entertaining.
If you like your matrix, you can keep your matrix.
How many times has Goldman given people "good" advice?
How many times has Goldman given people "good" advice?
good for who............................
Here ya go Mr. Algo:
Kuwait discovers huge oil reserveshttps://www.middleeastmonitor.com/news/middle-east/20949-kuwait-discover...
Peak worldwide discovery was reached in the 1960's - this is just more "feel good" happy-driving propaganda.
people like you were saying shit like that in the 1940s... and the '20s... and... well, you get the idea...
science - it works bitchez
Yes. We have entered the decline phase of oil with increasing production. If it declines any faster we will have more oil than we know what to do with.
Peaked over 50 years ago but we still produce 300% more oil than we did when it peaked. They are still fnding new oil fields in the ME and have barely touched Central Asia and haven't even started in the Arctic yet.
don't forget the recent natural gas find in Egypt, too... this stuff is everywhere and we get better at finding it all the time... people talk about oil at $20 USD/bbl, try natural gas at a dollar...
So long Canada, we hardly knew ye.
I know ... right? You don't boil tar sands at less than $80/barrel, let alone 20. And frankly, the "fracking industry" will pancake further. This is Hubbert's "Rocky Plateau" and this is the World Depression the central banks want us to pretend isn't there.
Since printed money has no cost, could not the US effectively nationalize the US Fracking industry through free money and turn the US oil industry into an arm of it foreign policy machine?
Hasn't it done so already?
The US will keep Oil at record lows for as long as possible.
Its a quasi-QE programme basically, helping out the retared US economy.
It also is killing Russian influence as the Rouble gets hammered every time oil plunges. . seems no one told the russians their influence is waining though!
Also it keeps iran in check to a degree.
But after all that i think that US shale will become leaner and meaner overall. it will learn to survive imo. I think "LOW OIL" ( contrary to PEAK OIL a few years ago) will be around for some time yet. It will make a complicated bottom.
I trust thee not.
OPEC says crude up - world is in recession - why crude is down
(Hubbert's Rocky Plateau)
fuck Hubbert and the horse he rode in on... he didn't account for tech improvements increasing both finds and levels of recovery... you may as well be spouting "Newton's limits" when we live in a world of quantum physics...
not sure if you know this, but you are very stupid
Oil is sold in the black market also. Isis, Iran sell oil in the black market.
GS can do the same with the excess oil it has collaterized.
Fade Goldman
Butt, butt TROUBE IN THE MID EAST.
Didn't Mike Maloney predict about 4 years ago $10 oil...? https://youtu.be/uzef43gdupk
LOL! "Officially", anything is possible, taking delivery at the "official" price is another thing altogether...
Anything is possible with manipulation.
- Iranian oil coming online and later more Iraqi, Libyan and new oil wells elsewhere even from the North Sea
- U.S. shale still pumping under hedges some till 2017
- Natural gas steadily used more and more and dirt cheap because it can be found anywhere around the globe
- Coal is still widely used and still very cheap and reliable energy source
- More sun-energy sources used despite the low oil prices
- Several Canadian oil sands projects coming online by 2017
I wonder if it will be like their $200 prediction back in 2008.
$10 oil, Bunga Bunga says it's a done deal.
The Saudis did what they were told by Dollar, Inc.. This has nothing to do about US shale production, and eveything to do with putting the hurt on Russia and Iran. 1986 all over again.
$20 oil makes 100% of America's green energy debt ($Billions)........bad debt.
Wind and Solar weren't compete @ $140/ barrel oil, they get insane @ $20/ barrel oil.
Could we even see $10 oil like mike maloney predicted? It's taken a little longer with the manipulation of the CB's but still on track for deflation followed by inflation.
https://m.youtube.com/watch?v=uzef43gdupk
The barrel oil could reach $10 or $20 even if all fracking collapses causing epidemic of apoplexy amongst empty talking heads. For one good reason since very few acknowledge the true reason for oil price collapse. I mean the true reason, which was repeatedly stated by Saudis, Russians and Chinese.
All of them say this is the demand collapse stupid. And demand collapses because of rampant inequality in societies throughout the world since people are loosing income, paying off the ever-increasing debt and cut the investments and expenses to the bone or desperately engage in gambling on stocks and loose big time.
That's why Saudis are trying to suppress fracking and tar sands not to completely lose influence on the US and World market and their benchmarks after they lost Chinese and Indian market to Russians and Iran as a part of trade dedollarization efforts which is exemplified by opening the first Chinese oil market denominated in Yuan just now and that includes Saudis’ participation and further collapse of petrodollar.
After next step, which would be development of Chinese investment banks to provide margin loans for oil contracts and we will kiss petrodollar dominance bye bye.
As far as fracking itself is concerned, the industry is extremely over-leveraged, massively loosing money as we speak regardless of any technological improvements. We see this desperation with unsound mining practices technically maximizing production over existing rigs, shortening their longevity to pay bondholders and survive another day.
As soon as interest rates normalize (if ever) or banks will not be able to sell their junk bonds (it’s already happens), they all will go bankrupt if Saudis keep the price low and they will for their own survival. We are just waiting for all the $90 hedges to expire and that’s will be it or another massive FED bailout, this time it would be junk bond holders since their market is dead now.
As a result of geopolitical tension between US and Russia, Saudis are step by step moving towards accommodation with the eastern powers to balance Iran support by Russia and China.
Just recently the number two sheik, defense minister of Saudi Arabia is in S. Petersburg, Russia talking about energy and military cooperation and perhaps purchasing weapons. It is clear political shift indicating much more independent new monarch who rebuked Obama just few weeks ago and without clearance from Washington attacked Iranian interests in Yemen.
Saudis even substantially reduced purchasing of US treasuries while China is selling en mass, a historical development challenging of petrodollar. Saudis even started selling bonds to cover budget deficit due to their currency peg which will break soon as in China mostly due to war spending and invasion of Yemen, since one cannot wage a war without freely printing money.
One way or another with big oil companies abandonment of the projects, the future of the shale industry is bleak and probably will be with marginal importance in the US. Already fracking has been almost abandoned in Europe since nobody want to challenge Saudis.
On the real economy not Boomberg BS:
https://contrarianopinion.wordpress.com/economy-update/
Controversial but interesting take on the so-called shale revolution poster 8 months ago that nailed it I found at:
https://sostratusworks.wordpress.com/2015/01/15/the-shale-game/
"demand collapse" -- and yet 'merica is still consuming greater than 18 million barrels per day. Perspective is important asshat.
Goldman SUCKS..those fuckers....fuck them up their bloated asses with a red hot poker....just MOAR manipulation from The Squid....dump and pump....
watch...war will break out, and these fuckknocks will profit from it....no matter what.
cunts...
i have been buying low debt oil stocks those bad boys are down over 50 to 70%, already production amounts has dropped and rig counts have also dropped...when the oil supply crunch happens it will be epic.
$20 a barrel oil not gonna happen, Goldmine! When the price got to upper $30 range, volatility ensued. This is due to the fact that crude oil reached a peak of $39 a barrel during the previous commodity era around 1979-1980. The price of oil has a memory. Accumulation occurs around the $39 a barrel level. Just because Goldmine says it, doesn't mean $20 will happen.
ZH...why do you even put anything on the site that is attributed to Goldman? On the one hand you villify them as the enemy, on the other hand you suck Goldman's golden tit. Then, you make a headline, attributable to Goldman, that something might possibly happen in the future.
I possibly have a lit birthday candle in my ass. Shall we all speculate on that too?
If Goldman says it's possible, then Goldman will makei it happen just to fullfil their Prophecy. In other worlds Global Deflation. It's a good thing unless you have any sort of Loan, Credit Card, Shares, Superanuation.