$37.65

Today’s spot oil close price.

Take a close look at the graph below and it paints a grim picture for anyone supporting water based oil extraction. Consumers may rejoice but folks who have anything to do with energy are going to take it on the chin. This includes shale oil, tar sand, coal, fracking - anything more involved than just poking a hole in the ground and pumping direct. (Hydroelectric will probably be OK)

Hell, Energy R&D, solar and wind technology will suffer too as cheap oil floods the market.

When will the market return? Not for a while according to my crystal ball. OPEC is still refusing to set production quotas so it’s a free for all with every country pumping more and more just to maintain current revenue streams.

Eventually, the market will hit bottom. My fear is the infrastructure will be unavailable when prices return and we will lose the opportunity when it presents itself.

Anyway - there is no real point to this thread other than to express my astonishment at how quickly oil prices collapsed and ponder the implications.

Carry on.

[QUOTE=Jetryder223;174838]Today’s spot oil close price.

Take a close look at the graph below and it paints a grim picture for anyone supporting water based oil extraction. Consumers may rejoice but folks who have anything to do with energy are going to take it on the chin. This includes shale oil, tar sand, coal, fracking - anything more involved than just poking a hole in the ground and pumping direct. (Hydroelectric will probably be OK)

Hell, Energy R&D, solar and wind technology will suffer too as cheap oil floods the market.

When will the market return? Not for a while according to my crystal ball. OPEC is still refusing to set production quotas so it’s a free for all with every country pumping more and more just to maintain current revenue streams.

Eventually, the market will hit bottom. My fear is the infrastructure will be unavailable when prices return and we will lose the opportunity when it presents itself.

Anyway - there is no real point to this thread other than to express my astonishment at how quickly oil prices collapsed and ponder the implications.

Carry on.[/QUOTE]

Where’s the dislike button?

I am visiting family for the holidays and not following the news like I normally would so all I can say at reading this is

[B]Oil to stay low for a long, long time, according to traders
[/B]

Crude oil’s slide continued on Monday morning, as oil futures broke below $39 per barrel. And with oil producers unwilling to publicly make moves to reduce the supply of oil, traders don’t appear to see crude rising back above $50 per barrel any time soon.

On Monday, the first futures contract that shows oil above $50 expires in the second half of 2017. Crude oil for December 2017 delivery (which is more liquid than other far-in-the-future contracts) is trading at just $50.50 per barrel.

Futures contracts don’t reflect pure expectations of where that commodity will trade; they also reflect things like the costs of storing that commodity, the extra price that users will pay to have access to the commodity for convenience reasons, and prevailing interest rates.

Yet the crude oil futures curve clearly reflects expectations that the commodity’s plunge below $50 is not a short-term phenomenon.

“The futures curve is telling you that the market is totally oversupplied, and will remain so for a long time,” commented Andy Hecht, a commodities trader and the author of How to Make Money with Commodities.

The latest bad news for crude came on Friday, when the Organization of Petroleum Exporting Countries decided to take a “wait and watch” approach to production levels, rather than taking action as oil prices continue to plummet. That spelled bad news for oil bulls who may have been hoping the oil cartel might signal a policy shift.

“In a nutshell, it tells me that it will take a long time to work through the surplus and traders feel prices won’t rise significantly for a while,” agreed Anthony Grisanti, a New York-based trader with GRZ Energy.

‘Utter powerlessness’

For Helima Croft, head of commodity strategy at RBC Capital Markets, crude’s weakness is a “sign of OPEC’s utter powerlessness.”

“I saw them throwing their hands up,” Croft said in Friday interview on CNBC’s “Fast Money.”

The options market doesn’t expect a swift rise back to $50 either. Based on options pricing, there only about a 20 percent chance of oil trading at $50 or above when the March West Texas Intermediate (WTI) crude contract expires.

At this point, the one thing that could prove the market consensus wrong is a shift drop in supply caused by geopolitical reasons, says Hecht.

“The only positive, though it’s a big positive, is that the geopolitical premium for oil is non-existent,” Hecht said. “That’s what the market’s discounting too heavily — and it’s a huge risk to anyone who’s short oil now.”

—By CNBC’s Alex Rosenberg.

so short of some huge bomb exploding directly under the middle east we ain’t gonna see a recovery for at least two full years…welcome back to 1986

JUST FUCKING GREAT!

Bought a new car 2 years ago and I think I am going to have to sell it. Lost my offshore job and drowning in bills

then there is this

[B]Goldman thinks oil prices could fall another 50% as the market spends another year sorting itself out[/B]

Dec. 4, 2015

The oil market is out of whack and Goldman Sachs doesn’t see this situation sorting itself out for another year.

In a note to clients on Friday following OPEC’s latest production announcement, Goldman’s Damien Courvalin wrote that the oil market’s supply-and-demand balance won’t be restored until the fourth quarter of 2016 at the earliest.

On Friday, OPEC — the 13-member oil cartel — announced that it will look maintain its current rate of production at around 31.5 million barrels per day. (Goldman, for its part, expects OPEC production to come in closer to 31.8 million barrels per day.)

OPEC also said it would discuss how to accommodate higher production out of Iran at its next meeting in June.

Goldman added that OPEC commentary, “further stressed the need for the oil market to rebalance on its own (‘wait and watch’) and the organization made no comment on adhering to country level quotas.”

This approach from OPEC, however, could send oil prices even lower as markets may still fail to clear oversupply.

Here’s Goldman:

[QUOTE]For now, our price forecast reflects our belief that “financial stress” can solve the current market imbalance by gradually reducing excess supply capacity as demand recovers. We believe, however, that there are high risks that this may prove too slow an adjustment as inventories continue to accumulate and storage utilization nears high levels in the face of a mild winter, slowing EM growth and a potential lift of international Iranian sanctions. [B][U]The rising probability that markets may need to adjust through “operational stress,” when surpluses breach capacity, leaves risks to our forecast as skewed to the downside in coming months, with cash costs near $20/bbl."[/U][/B]

And so while Goldman is forecasting oil prices over the next few months to be near $40 a barrel, or roughly where they are trading today, there could be another 50% to fall as continuing OPEC production pushes producers toward the absolute lowest level they can conceivably manage.

While much has been made of the “breakeven” cost of oil production over the last year, it is the “cash cost” that determines the actual floor for oil producers. The “breakeven” cost measures what oil price producers need to be profitable, the “cash cost” measures the absolute lowest level a producer can accept to keep their operation running (even if at a loss).

The strategy that has been employed by OPEC over the last few years as US shale production has ramped up has been to push ahead and seek to both bring in as much revenue as possible by simply selling oil at prevailing market prices and hoping to push out smaller, marginal producers as a result of these low prices created by an oversupplied market.

In other words, OPEC has been content to play chicken with US producers.

But as long as investors remain willing to invest in oil companies that are operating above their “cash cost” level, then it won’t be financial stresses on the company level that allow markets to clear, but stresses at the storage level that might be needed for the market to balance.[/QUOTE]

Like I said…JUST FUCKING WONDERFUL

so when this is all over and there a handful of companies left compared to today we will be fucked 3x harder as there will be that much market less competition.

[QUOTE=z-drive;174856]so when this is all over and there a handful of companies left compared to today we will be fucked 3x harder as there will be that much market less competition.[/QUOTE]

yeah…if this is going to be anything like the fallout after the crash of the mid 80’s, it will take 20 years before the damage to the GoM mariners is anywhere near repaired.

[QUOTE=c.captain;174857]yeah…if this is going to be anything like the fallout after the crash of the mid 80’s, it will take 20 years before the damage to the GoM mariners is anywhere near repaired.[/QUOTE]

Timing is perfect then. I should put 20 years in with MSC, get my Masters ticket, retire with a MSC pension and then begin career #2 when the GoM cranks up again.

So what you’re saying is we need some sort of NATO/Russia war to spark up and engulf the world. Alright! I got a government job just in time for the fun :slight_smile:

I meant oil prices for consumers.

Thats my plan to! Haha. Not that I like it.

[QUOTE=Jetryder223;174858]Timing is perfect then. I should put 20 years in with MSC, get my Masters ticket, retire with a MSC pension and then begin career #2 when the GoM cranks up again.[/QUOTE]

Thats my plan to! Haha. Not that I like it.

That said, there will always be a demand for oil. Wind and solar will never grow beyond the supplemental market just because of their low relative yield. The offshore portion of the petroleum industry will be in for a rough time. Too much cost for infrastructure that has to be financed well ahead of production, high cost of maintaining the properties, personnel, etc. I was working out in west Texas last week with a smaller independent operator. While there is certainly an impact for them, regardless of the price for oil, they are making money. Most of their wells are paid for, so even at less than $40, they can still turn a profit. They even have two rigs drilling. . . it is the late comers to the frac boom that are hurting. . . some of those wells were expensive and heavily financed on the expectation of near $100 oil. . . . we all know that it will turn, but it will take even longer for offshore. The onshore low hanging fruit is here to stay for a bit, even when oil prices start rising. . . at least that is the way I see it. . .

[QUOTE=z-drive;174856]so when this is all over and there a handful of companies left compared to today we will be fucked 3x harder as there will be that much market less competition.[/QUOTE]

This concerns me.

The oil patch is an oligarchy already. A handful of oil majors and a few stragglers. Three large deepwater OSV companies in the Gulf and a couple dozen small stragglers on the shelf.

The tugboat business is rapidly becoming an oligarchy. The big companies like Saltchuk and Kirby are gobbling up the small companies. Crowley is growing, but more into ships. The medium size companies are doing ok. The small companies are disappearing. There are not as many employment options as there use to be.

[QUOTE=tugsailor;174876]This concerns me.

The oil patch is an oligarchy already. A handful of oil majors and a few stragglers. Three large deepwater OSV companies in the Gulf and a couple dozen small stragglers on the shelf.

The tugboat business is rapidly becoming an oligarchy. The big companies like Saltchuk and Kirby are gobbling up the small companies. Crowley is growing, but more into ships. The medium size companies are doing ok. The small companies are disappearing. There are not as many employment options as there use to be.[/QUOTE]

Yeah. . . makes me glad I am ashore. . .not that there is a whole lot of job security here. That said, I have been working with the same people and in basically the same position for over 18 years now, and while I have not been working for the same company the whole time, there is a bit of security in the seniority. . . (he says ominously. . . )

Did I read c.capts cut & paste correct? $20/bbl in the next few months? I have NEVER seen those prices.

What’s that make? Like a buck a gallon at the gas pump?

Sheeze, you’d think it’s some kind of master plot to lure us away from energy conservation, green technology and domestic production just to slam us again with $150 per barrel in the not too distance future.

Nawww, that would never happen.

[QUOTE=lm1883;174889]I would bet after Christmas shopping season is over we see the beginning of a price rebound, either by Saudis reducing production or limited escalation in Syria or Southern Saudi (Houthis have been hitting the bases in the southern provinces pretty hard).[/QUOTE]

I would not take that bet for one simple reason - Iran.

Iran has been subject to sanctions over their nuke program. Now that that has been settled (for the time being) they will soon have renewed access to world markets. They are sitting on an ocean of oil and will be flooding saturated markets further in an attempt to make up for lost time.

Transportation, refining, retail profit is pretty static so pump prices can only go down so far. The price to move oil, refine it and sell it shouldn’t be influenced by the pice of crude that much and therefore refined products will never go below a certain price—it would still cost something to make and sell even if the oil was extracted for free.

[QUOTE=Jetryder223;174886]Did I read c.capts cut & paste correct? $20/bbl in the next few months? I have NEVER seen those prices.

What’s that make? Like a buck a gallon at the gas pump?

Sheeze, you’d think it’s some kind of master plot to lure us away from energy conservation, green technology and domestic production just to slam us again with $150 per barrel in the not too distance future.

Nawww, that would never happen.[/QUOTE]

I think it was 1999 that crude went to $10.80/bbl for a short time but was in the toilet throughout the year at the same moment that the dot com bubble was sweeping the planet

I’m glad i got that offer from MSC atleast i will have a job when i graduate