Freakin' Assholes of OPEC

[albundy]

http://www.bbc.com/news/business-35034103

Oil hitting lows not seen since 2009. Dickheads at OPEC just had a meeting and decided not only to keep up their ridiculous levels of production but INCREASED it!!! From 30 million barrels a day to 31.5 million a day! They are doing this to keep their market share in the face of more competition and because of fracking. AHHH, who needs money anyway? I'll make do.

[Rjames]

I feel your pain. It's tough on an oilfield man these days, and the people jumping up and down about low gas prices will soon feel the pinch too. $40/bbl oil isn't good for anybody in the long run. This to shall pass and I hope that oil gets to $150/bbl when it goes up next time.

[turbo-dog]

Originally Posted by Rjames

I$40/bbl oil isn't good for anybody in the long run.

I haven't felt the pain of low oil prices yet.

[David-Louisiana]

Originally Posted by turbo-dog

I haven't felt the pain of low oil prices yet.

When taxes are raised in Louisiana to cover the shortfall of low oil prices and the new governor's expenditures.

[David-Louisiana]

Even Saudi Arabia loses money at this level, and Russia loses more money per barrel than anyone.

[The Big Lebowski]

The Dude doesn't usually comment on things like this, but "this aggression will not stand, man."

The governor has no control over the price of oil; I guess he could just keep on with the shell game we've been using these last 8 years, but I hope not.

New governor's expenses? Shit man - until he racks up a bill more than the deficit Jindal left us with, please sit down.

[David-Louisiana]

Two words, Medicare Expansion.

[p98397]

The problem with the gov-elect is that he is supposedly going to try to get an oil processing tax passed in LA. If that happens, refineries, chemical plants, anything downstream will cease to expand and oil jobs will leave the state in larger numbers, as our neighbors (TX, MS, ALA) don't have this tax and actually offers incentives for this industry.

As for OPEC, they WANT oil to stay around 40-they don't lose money at this level, as most people believe, as their cost to produce a barrel from existing developments is well below 10. The purpose of keeping it this low is to drive unconventional oil developments (fracking, oil sands, ultradeep water, etc.) out of the game. These unconventionals really aren't all that profitable under 50...so you go from a supply glut (and the US as a net exporter) to supply pressure (and the US as a net importer). This is a political play, but in the long run will be beneficial to the US oil industry. The industry is already responding with new technology development that is driving down the cost of production. Now if we, as citizens, get TRULY informed about fracking and realize the hype is bullshit, things can get better.

And if ANYBODY thinks Saudi is an ally, they are delusional.

[albundy]

Originally Posted by turbo-dog

I haven't felt the pain of low oil prices yet.

In South Louisiana, the oil industry affects EVERYTHING. I know people that work at home improvement stores, for example, that have had their hours cut because of the downturn in spending at the stores. Well, they just went back up a little because of the holidays. But after that, their hours will be down again. After a while, you'll see restaurants and stores and car dealers, etc. starting to feel the pinch. If people are laid off, they damn sure aren't doing home improvement or buying a new car or going out to eat. The oil industry employs the majority of the community down here in one way or another.

[Kernelingus]

It's the law of economics and bad habits, theirs AND A LOT OF OTHERS economies depend ENTIRELY on oil......they have to have so many dollars every month, divide that by what a barrels sells for and that is how many barrels they have to sell.

Unfortunately for the oil business and a lot....A LOT of other businesses....they have priced themselves out of business with high salaries and HIGH PROFITS!!!.....if the price of a gallon of gas had been kept reasonable.....this would have never happened!!! The higher that a gallon of gas gets.....the more feasible alternatives get and those alternatives then become necessities.

Governments (our Government) used oil to cheat people and they let the stock market do it for them.....oil is a necessity and should never been allowed to become a commodity!!!! Oil companies and Governments created a problem that needed a resolution.....many were found.

Most likely things will NEVER be the same for the oil industry....look at the computer industry back in the 70's and 80's.....they had a death grip on business and the cost of computing was EXTREME!!!! an alternative came along, then many, many alternatives came along and today most people don't have a clue who the Big Players in the Computer Industry were in the 70's and 80's......they priced themselves right out of business......it's much easier for a startup to grow and compete than it is for a BIG company to shrink and still be able to compete.

[David-Louisiana]

Originally Posted by p98397

The problem with the gov-elect is that he is supposedly going to try to get an oil processing tax passed in LA. If that happens, refineries, chemical plants, anything downstream will cease to expand and oil jobs will leave the state in larger numbers, as our neighbors (TX, MS, ALA) don't have this tax and actually offers incentives for this industry.

As for OPEC, they WANT oil to stay around 40-they don't lose money at this level, as most people believe, as their cost to produce a barrel from existing developments is well below 10. The purpose of keeping it this low is to drive unconventional oil developments (fracking, oil sands, ultradeep water, etc.) out of the game. These unconventionals really aren't all that profitable under 50...so you go from a supply glut (and the US as a net exporter) to supply pressure (and the US as a net importer). This is a political play, but in the long run will be beneficial to the US oil industry. The industry is already responding with new technology development that is driving down the cost of production. Now if we, as citizens, get TRULY informed about fracking and realize the hype is bullshit, things can get better.

And if ANYBODY thinks Saudi is an ally, they are delusional.

Recent drilling and investment in rehabbing old fields has cost them plenty. It now costs them more to produce a barrel of oil than from Bakken.

Almost every oil producing company (including nationally owned) is losing money at this price but they need to service debt whether it is their own capital used to finance it or borrowed money.

The idea of $6 per barrel oil is ancient history, but urban myths persist.

And Kernelingus, oil companies have not priced themselves out of business. Bigger earnings from the Googles of the world for salaries and shareholder dividends has been standard for over a decade. That is another urban myth.

[p98397]

Kernel-Quit reading Huffington Post and Daily KOS, you sound like an idiot. Learn about the business-"allowed to be a commodity" ?!? Are you serious? The only way our government "cheats people" with oil products is the SUBSTANTIAL royalties they make from oil production and the SUBSTANTIAL gas tax YOU pay at the pump (currently over 25% of the price you pay per gallon in LA).

[p98397]

Originally Posted by David-Louisiana

Recent drilling and investment in rehabbing old fields has cost them plenty. It now costs them more to produce a barrel of oil than from Bakken.

Almost every oil producing company (including nationally owned) is losing money at this price but they need to service debt whether it is their own capital used to finance it or borrowed money.

The idea of $6 per barrel oil is ancient history, but urban myths persist.

And Kernelingus, oil companies have not priced themselves out of business. Bigger earnings from the Googles of the world for salaries and shareholder dividends has been standard for over a decade. That is another urban myth.

David - the sheer size of reserves in Saudi makes their development cost per barrel extremely low. Recent industry conferences that I've attended on oil price forecasting suggest that even with the recent development, their unit development cost compared to their current level of production is low, and they can likely sustain current production levels for two years or more with minimal additional investment.

What you are referring to is NEW reserves development cost, which is indeed well above 10, close to 12-13 capital development cost per barrel, as compared to closer to 16 for Deepwater US.

[David-Louisiana]

Newer offshore heavy field for Saudi I'm thinking around 20 API gravity so not that heavy. UAE did drill a good bit in recent years but they are about played out. Libya is a freakin mess and horrible management of fields when Daffy Duck was under embargo. It's going to take a LOT of rehab to those fields for about the most perfect oil for refining that there is.

I'm just downstream industrywise so not sure I've gotten all of that correct.

[David-Louisiana]

Originally Posted by p98397

Kernel-Quit reading Huffington Post and Daily KOS, you sound like an idiot. Learn about the business-"allowed to be a commodity" ?!? Are you serious? The only way our government "cheats people" with oil products is the SUBSTANTIAL royalties they make from oil production and the SUBSTANTIAL gas tax YOU pay at the pump (currently over 25% of the price you pay per gallon in LA).

The new inventory tax on tank farm inventories. Usage in Louisiana will be as minimal as possible. This will hurt the shipping industry. Ships, barges, and rail and everything which services them.