Price of Oil hits new low

[Punx0r]

Russia also hiked interest rates to 17% today (up from 10.5% two weeks ago). Something's got to give. I just hope the result isn't military action...

 

[liveforphysics]

Where will it stop???

When the north american oil sand/shale extraction atrocities collapse seems like the logical point to raise the price per barrel again.

 

[amberwolf]

with permission of OP of "crude just hit $60.43" thread, merged it with this pre-existing oil price thread.

 

[friendly1uk]

I'm happy to ignore anything said by *either* side in the fracking debate unless accompanied by credible, peer-reviewed sources.

It's not the media convincing me, It's the quakes. They started fracking and the ground started shaking. It is very hard to put a spin on that.

Who would you trust? I find the American geological survey .gov site says a lot.
We have seen the power of oil. If you turn against it without 100% proof your in court and silenced. Which does nothing for your credibility. The middle paragraph in this quote looks almost like an afterthought, and quite contrary to the rest of the article. Which is quite specific about cause and effect

A team of USGS scientists led by Bill Ellsworth analyzed changes in the rate of earthquake occurrence using large USGS databases of earthquakes recorded since 1970. The increase in seismicity has been found to coincide with the injection of wastewater in deep disposal wells in several locations, including Colorado, Texas, Arkansas, Oklahoma and Ohio. Much of this wastewater is a byproduct of oil and gas production and is routinely disposed of by injection into wells specifically designed and approved for this purpose.

Hydraulic fracturing, commonly known as “fracking,” does not appear to be linked to the increased rate of magnitude 3 and larger earthquakes.

Although wastewater injection has not yet been linked to large earthquakes (M6+), scientists cannot eliminate the possibility. It does appear that wastewater disposal induced the M5.3 Raton Basin, Colorado earthquake in 2011 as well as the M5.6 quake that struck Prague, Oklahoma in 2011, leading to a few injuries and damage to more than a dozen homes.

sauce: http://earthquake.usgs.gov/research/induced/


If we did some fracking, and scientifically predicted a following 3+ tremor. Then we could say with some certainty that the two were connected. Then we would have to do it again to call it any sort of proof. To which oil would still counter that your test site is unlike their site. We can never get past speculation. It don't take a lot of belief, but courts need facts.

Nobody is fighting over M3 quakes, as they don't do any damage. Through omition they're saying lower magnitude quakes do appear to be linked with fracking. I find them a credible source. Though getting shook around was more convincing.

 

[dnmun]

why don't you just stick to damaging other people's cars by throwing brake fluid on them. geology is far over your head. by posting up more stupid stuff it just makes it more and more obvious you are totally biased and feel like destroying other people's property is the way to solve the problem of global warming.

 

[Joseph C.]

Where will it stop???

I'm guessing it could be as low as $50 on the Brent. Once Russia start collapsing - the supply will start to be reduced. The real question is how long do we have before the prices soar well above record highs?

Ordinarily, once the cost prohibitive oil and gas competition has been destroyed you'd imagine it will shoot upwards. However, it seems the emerging markets are in the serious decline. Russia is banjaxed, China is heading in that direction and it will probably take Brazil, Thailand, India and Indonesia with it. The situation is probably also not helped but the strength of the US dollar and the picking up of the US economy. If the collapse of the emerging markets does transpire, the lack of demand for oil might mean that the prices will stay relatively low for a good while.

Russia though is screwed and has been for a very long time. They are paying heavily for crony capitalism and having a narcissistic economically illiterate in charge. Outside of oil and gas the Russian economy has got nothing going for it whatsoever and Putin fired the finance minister who urged for diversification.

Putting on my own nationalistic hat I think Ireland is going to suffer too if the above transpires. We do a lot of food agri business in China and Russia.

I don't know about the UK but I do know that Cameron is one of the biggest idiots in Europe so having him in charge won't help.

The old adage about Germany and the Germans is always true - great at business - shit at economics. Their infrastructure is crumbling and Merkel's muppet government isn't willing to make the necessary investments. They have let that fester so long and their system is swamped in bureaucratic federalism that it will take decades to fix their problems. They essentially run their country like they are running a business. And now they are trying to export their braindead economic policies to the rest of Europe and hit us with their sickness of deflation. One of only countries so far that has managed to resist deflationary trends in the eurozone is Ireland and that can't continue if the emerging markets collapse.

As for the PIGS (Italy has replaced Ireland) well southern Europe has always been a basket case. I mean look at Portugal and try and work out how the hell that country is still so poor despite having 13 million visitors a year, a massive fishing fleet...

In summary, I can easily see demand for oil remaining low keeping a lid on prices.

 

[chvidgov.bc.ca]

Thanks Josef C. That was an astute "take" on things. I heard 35 could be the low! From the CEO of Canadian Natural Resources no less, only a couple of weeks ago. That's a lot of downside in this sullen oil market. I better hedge some of my Canadian dollars on this next face-ripper rally in crude that lasts for a day or two.

 

[Joseph C.]

Thanks Josef C. That was an astute "take" on things. I heard 35 could be the low! From the CEO of Canadian Natural Resources no less, only a couple of weeks ago. That's a lot of downside in this sullen oil market. I better hedge some of my Canadian dollars on this next face-ripper rally in crude that lasts for a day or two.

35

There isn't anything astute there. I just read a fair bit of different sources and regurgitate it if appropriate.

Of course if it turns out to be true I will say that it was all me, me, me. However, if it doesn't happen i'll pretend I never said it. Isn't that how the prediction game works - draw attention to the hits and ignore the misses.

 

[TheBeastie]

So who believes the conspiracy theory that the West has deliberately pushed down the price of oil in the last few months to stuff up Russia?
http://www.heraldsun.com.au/business/economy/pump-them-to-death-the-secret-war-on-russia/story-fnkjjout-1227160860899
The “conspiracy theory”, widely accepted in Russia, is that the US and Saudi Arabia are colluding to keep production artificially high in a bid to drive the price down.

“The net result has been to make life difficult for Russia and Iran, at a time when Saudi Arabia and America are confronting both of them in a proxy war in Syria,” he wrote. “This is business, but it also has the feel of war by other means: oil.”

Just as they did to the last leaders of the Soviet Union, the Americans and Saudis are trying to “pump them to death”, he argues.
Personally I don't. A lot of people who hate GWB see him now as a idiot but there was a time when people liked him as he did get voted in to power twice.
Governments just aren't that smart to bring down the price of oil in perfect planed deliberate stealth. There is a widely accepted theory in the media that there is a just as powerful big leaker in the USA government as Edwin Snowden but they just don't know who it is or how to catch him.
If they could, I think it would come out leaked in a nice PDF document with the USA government logo on it etc saying "pumping to death" Russia plan.

In the mid to late 2000's there was all this talk about America becoming self efficient in Energy instead of giving all this money to other countries that hate the USA.
The U.S. Government allowed new drilling etc to help make this happen. A few years later all this has now become a reality that a lot never believed come come.
Obamas drill baby drill. He didn't think like most people think the energy market could be shifted by domestic production, the markets now clearly saying otherwise.
https://www.youtube.com/watch?v=-8edIjASHZI

Everyone remembers the BP Horizon oil rig that blew up in the Mexico gulf a few years ago, these investments were inspired by the new aim of the USA freeing its self of Oil from unfriendly countries.
http://en.m.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

The worlds biggest miner lacked an energy portfolio until a few years ago and spent $20 billion in North America for shale energy.
http://blogs.wsj.com/dealjournalaustralia/2012/11/13/bhp-powers-on-in-us-shale-revolution/

BHP is a company that's happy to dig ship and deliver to China's ports iron ore at just $50 a ton, and just do 100's of millions of tons each year to make a profit.

Now their are in Shale I am betting they will be happy to do the same thing there and now they are ramping up production it's obviously hurting the market. Sure it goes against market economics but these miners do crazy things.
The only conspiracy depth I can imagine is a company like BHP foreseeing they are going to cause excess in the market and taking a hedging market position on falling oil deliberately and profiting from it, if such moves are legal.

http://www.theaustralian.com.au/business/mining-energy/us-shale-play-will-start-to-pay-off-next-year-says-bhp-billiton/story-e6frg9df-1226781056179

Everyone in the west cheered for North America to be self sufficient in energy but no one stopped to think about what it would do to the price of crude oil etc.

 

[Joseph C.]

Nah TheBeastie, the US oil and gas industry is a threat to the Saudis. I think they are also trying to screw Iran as per usual - they really loathe the Shiites. It's either them or Qatar that is likely funding ISIS or whatever they are calling themselves these days. That's the rumour anyway.

Brent has hit under $60, WTI is nearly at $54 - even and falling further.

I wonder how cheap will Ryanair flights get now? We should be able to fly out to Paris or Berlin from Dublin for less than €15 each way. A little bit of good times before the impending doom. :lol:

 

[dnmun]

we tested the $53.60 low set the other day with the $54.20 close yesterday and then the move up today had been very steady as though most of the liquidations of the weak margined positions are all now ruined. a lot of us think there will be more than a few hedge funds closing too. some of the big spikes down were most probably some firm being liquidated. that first move to $58 in the short covering rally the other day should now be defeated if the rally is to remain intact. jmho (current $56.20)

 

[edcastrovalley]

dnum, I think you are understating the risks Fracking poses. The U.S. EPA have found numerous contamination issues and the whole sector is only in its infancy - which suggests to me that the problem will only get worse. No one even knows what the companies are using for their hydraulic fluids. Therefore, it's hard to quantify the level of stupidity operating when it comes to something as vital as water in a country that has large swathes of it in drought.

These guys will frack with anything. In 1967 with the help of the US gov they dropped a 29 kiloton nuke 3/4 of a mile down a gas well in New Mexico. The mega frack resulted in 160 foot diameter cavity that flowed gas but the gas was radioactive. They experimented with larger nukes, even 3 nukes at a time, all with promising results. The madness only stopped (or slowed) when someone realized that "even if the well flowed gas for 25 years we will never recoup the cost of the nuke". I'm not sure what they ever did with the gas.

 

[wineboyrider]

edcastrovalley wrote: These guys will frack with anything. In 1967 with the help of the US gov they dropped a 29 kiloton nuke 3/4 of a mile down a gas well in New Mexico. The mega frack resulted in 160 foot diameter cavity that flowed gas but the gas was radioactive. They experimented with larger nukes, even 3 nukes at a time, all with promising results. The madness only stopped (or slowed) when someone realized that "even if the well flowed gas for 25 years we will never recoup the cost of the nuke". I'm not sure what they ever did with the gas.

Nevada not New Mexico only one Nuclear bomb ever went off in NM. I think I found the one your are talking about? Interesting?http://aoghs.org/technology/project-gasbuggy/

 

[dnmun]

first estimates of job losses in Texas are about 125,000 jobs with average pay about $110,000 with truckers starting around $80k up to overtime roustabouts and specialists of around $125k.

so now we are talking about restaurants which just financed expansions going under, car dealerships with hundreds of trucks they will have to find and repo as workers move to the far ends of the country looking for work.

entire residential neighborhoods with house prices dropping 5-10% in months and foreclosed properties piling up like las vegas all over again.

but Prius sales are down 13% and hummer sales and big pickup truck sales have exploded nationwide.

but i think the bottom is in at $53.60.

 

[edcastrovalley]

Nevada not New Mexico only one Nuclear bomb ever went off in NM. I think I found the one your are talking about? Interesting?http://aoghs.org/technology/project-gasbuggy/

I like the website you found. Very interesting. I like how they made a national park out of the well site. :lol:

 

[dnmun]

there was a project to create a new transisthmus sea level canal from the atlantic to pacific under consideration in the Atoms for peace program

 

[TheBeastie]

edcastrovalley wrote: These guys will frack with anything. In 1967 with the help of the US gov they dropped a 29 kiloton nuke 3/4 of a mile down a gas well in New Mexico. The mega frack resulted in 160 foot diameter cavity that flowed gas but the gas was radioactive. They experimented with larger nukes, even 3 nukes at a time, all with promising results. The madness only stopped (or slowed) when someone realized that "even if the well flowed gas for 25 years we will never recoup the cost of the nuke". I'm not sure what they ever did with the gas.

Nevada not New Mexico only one Nuclear bomb ever went off in NM. I think I found the one your are talking about? Interesting?http://aoghs.org/technology/project-gasbuggy/

Looks like it, yeah it's that's pretty interesting.
One guy called it a success, From the well site, Holcomb called the test a success. “The well produced more gas in the year after the shot than it had in all of the seven years prior,” he told Nelson.

That gas could still be used for a dedicated glass fired power plant.

There was huge protests from green groups when they dredged port Philip bay near Melbourne, I pondered the idea of setting off a nuke deep below the sea surface floor so that the sea floor would still be dropped but anything living on the surface floor would survive. The double upside would be the fear of radiation would cause all the fishing actives to cease and there would be a new era of sea life in port Philip bay. When I suggested my idea to some peers they thought it was somewhat stupid. :?

 

[dnmun]

i was hoping that the radioactive water that is flowing off into the ocean at fukashima would pollute the pacific so that the huge tuna fleets and seine net trawlers with these huge nets could no longer sell the fish they catch when they become radioactive.

i figure it is the only chance the blue fin tuna will survive. the radioactive ocean environment would be safer for them than being exterminated by these huge fishing fleets.

 

[liveforphysics]

first estimates of job losses in Texas are about 125,000 jobs with average pay about $110,000 with truckers starting around $80k up to overtime roustabouts and specialists of around $125k.

so now we are talking about restaurants which just financed expansions going under, car dealerships with hundreds of trucks they will have to find and repo as workers move to the far ends of the country looking for work.

entire residential neighborhoods with house prices dropping 5-10% in months and foreclosed properties piling up like las vegas all over again.

but Prius sales are down 13% and hummer sales and big pickup truck sales have exploded nationwide.

but i think the bottom is in at $53.60.

Music to my ears. So many have been giving an excellent opportunity to do something productive with there lives.

I have news for everyone in the dead-man-walking corruption based combustible fuel industry. It's impossible for your jobs to be needed or relevant in the rapidly approaching future.

Be the first to quit and find something positive to do and you will have less job competition from those who haven't yet realized the inevitable.

 

[Arlo1]

You guys don't think they want to keep it a little lower for now on to try to help people feel ok about purchasing gasoline vehicles?

 

[Joseph C.]

You guys don't think they want to keep it a little lower for now on to try to help people feel ok about purchasing gasoline vehicles?

Anyone that buys a car based on temporary low oil prices is an idiot. They will be this low for a month or two tops but they will be high > $100 per barrel permanently.

 

[wineboyrider]

If I were to go travel and get a good paying job I would move to Reno area and apply for a Tesla job 8) My best friend wants (ed) to move to North Dakota in January of next year as he is having a hard time making it as a wine salesman in Annapolis, MD area. :? I told him the other day that oil is on the down bruh go to Nevada and hook up with Tesla.....I'll let you know what happens. :|

 

[Arlo1]

You guys don't think they want to keep it a little lower for now on to try to help people feel ok about purchasing gasoline vehicles?

Anyone that buys a car based on temporary low oil prices is an idiot. They will be this low for a month or two tops but they will be high > $100 per barrel permanently.

You are talking about 90% of the public dude. I try to teach them as much as I can but most of my friends are sick of hearing about electrics...
Time for new friends I guess.

 

[Joseph C.]

Arlo, I have more than a sneaking suspicion that they are only looking for an excuse to buy rather than using low prices as their reason.

 

[dnmun]

there was hope in early trading after overnight strength based on expectation that crude would get some support because of the algerian energy minister making the public demands for opec to consider cutbacks and the russian oil minister started talking about how they could reduce exports if they bot a refinery from the west to use to create more product for european markets and that would eat up some of their export volumes.

so rallied up into the $56 range but soon reality set in and the rally sold off in panic down to the new $52.90 low (down from previous $53.60 low) and it has now rebounded a little to the $53.60 level of the previous low in this cycle.