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I've never really seen money spent like this.

SteveSS

SteveSS

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I'm on a drilling rig now and everything is first class. Everyone has new Ford f-250 diesels that are left running. The trailers are new with satellite and big screens in bedrooms and offices I would say just building the gravel pad for this rig cost $200K. I was feeling guilty about my day rate but not anymore. You could say that's why gas costs so much but it's the reverse. Our domestic policies drive up the price of oil so these guys have money to burn.
 
Theres 2 70 inch and 3 55 inch tvs in my office just to watch frac jobs.
Oil field cash is crazy!! lol
 
Capitalism. I love it. Let them run. You are helping to make the world turn. Keep it flowing.
 
I guess those seeking career advice on money is go where the cash flow is. What do you spend money on where the amount doesn't matter or you have no choice. Government, gasoline, power/water, health/medical.
 
SteveSS said:
I guess those seeking career advice on money is go where the cash flow is. What do you spend money on where the amount doesn't matter or you have no choice. Government, gasoline, power/water, health/medical.
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For sure. I know I spend 20 a day in gas to get to work because its 110 miles round trip everyday.
To be honest I would like it if they just paid me in gasoline. lol

SS are you a hand on the rig or a consultant?
 
Hey cool to see some other oil guys on here! I agree the money spent was mind boggling at first. Curious what you guys do and where you are based? I'm a mudlogger out in California been doing it about 2 and a half years now.
 
Don't know how true this is, but I heard that we import oil that that we use and export oil that is drilled here. If it ios true; what a racket!
 
It doesn't matter. You pay exactly the same for a gallon of gas made from oil pumped down the street that you do for a gallon made from oil pumped in Saudi Arabia and shipped around the globe to the US. All oil is sold on exchange markets for whatever the market price is, which is why prices are so ridiculous.

As I've mentioned before, Canada is the biggest proof of the lie that many people try to sell about domestic energy production. Canada pumps enough oil every year to meet 100% of its domestic needs and serve as one of the largest exporters to the United States. They have enough refining capability to meet 100% of their domestic needs plus be a major exporter to China and other countries. And despite that, you'll pay (corrected for taxes and exchange rate) the same price for a gallon of gas in Alberta, Canada, there biggest oil producing area) that you pay for it here in most areas of the US. That's because it doesn't matter where the oil is produced, or how short the logistics trail is to get it to market, it all sells for the exact same market price.

And who sets the market price? Oil consumers? Nope, not since the late 1980s. The market price is largely driven by speculators ranging from energy companies to mutual funds most of us have 401ks with.
 
I'm located smack dab in the BOOM area of the huge "Eagleford" oil shale play in south central Texas that rampted up over two years ago. It's crazy round here.
 
"Unlike most products, oil prices are not determined entirely by supply, demand and market sentiment toward the physical product. Rather, supply, demand and sentiment toward oil futures contracts, which are traded heavily by speculators, play a dominant role in price determination."


In other words, it's a scam.
 
Richard Cranium said:
Except if you live in Saudi Arabia.

http://www.ibtimes.com/how-much-do-you-pay-gas-top-5-countries-cheapest-gas-prices-1544025

We are getting hosed.
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That's the same deal in Venezuela too. What sucks is it used to be almost the same here. Up until 2006, it wasn't legal to sell West Texas Intermediate Crude (WTIC) on international energy commodities exchange markets. WTIC had to be sold on domestic markets where prices were monitored for speculative swings and controls were in place to limit them. That all changed in 2006 when our wonderful Congress snuck some wording into an energy bill that repealed that limitation and WTIC could be sold on international markets.

What was the result? If you look at London's ICE exchange, they averaged about 70,000 oil trades a month before the law was changed. By March 2007 after the law had actually gone into effect they were up to 200,000 a month and they had the first 1,000,000 trade month in their history in July 2007, which you may remember was when oil prices spiked here in the US. This trend would have continued were it not for the housing collapse. Also keep in mind there were no increases in demand from China, or India, or the US that drove this trading. This was all done 100% by speculators who rushed into the energy markets once they saw the other markets falling and they needed a safe haven for their funds.

This is why the concept of supply and demand between oil users and producers went out the window a long, long, time ago. The prices are determined by the supply of oil futures and demand from speculators and investors, and has nothing to do with how much gas is actually used.
 
If guys like Steve are making good money working in the oil industry it makes you wonder what it must be like for the big boys in the boardrooms of these companies. They must have trucks full of cash waiting to be taken to the airport and flown to their offshore secret accounts in the Caymans. It's nice of them that a little of the $ is actually making it down to the guys that are doing the actual work.
 
I've been trying to figure out who's making all the money for a long time and no one seems to know or want to tell. :) For example, factoring in all costs (labor, utilities, profits, hardware, etc.), it costs about $26 to pump a barrel of oil from the bed of the Gulf of Mexico and pump it to a shore-based storage facility. But, that barrel of oil was sold upwards of 90 days before as a future for say $100 a barrel. So where did that $84 dollars go? Some of it was commission for the brokers, but who got the rest?

Once the barrel hits the storage site, it is sold by the trader to an energy company, who then has it transported for their refining facility. It used to be oil companies used to do all their refining, but they learned it's cheaper to let an energy company do the refining and buy gasoline from them rather than pay for the running and upkeep of refineries themselves. So a barrel of oil goes into a refinery and about 26 gallons of gasoline come out, and the oil companies buy the gas back from the energy companies for a new spot rate. The the gas gets distributed to retailers or jobbers.

So the price is pretty well steadied from the point it reaches the oil company to the end user, but where does that forst big chunk of money go?
 
Bruzilla said:
So the price is pretty well steadied from the point it reaches the oil company to the end user, but where does that forst big chunk of money go?
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I've got a friend who is a ship captain & he's been assigned to several tankers & he was telling me that it's not uncommon for the load of oil to be sold several times while it's in transit.
 
Richard Cranium said:
"Unlike most products, oil prices are not determined entirely by supply, demand and market sentiment toward the physical product. Rather, supply, demand and sentiment toward oil futures contracts, which are traded heavily by speculators, play a dominant role in price determination."


In other words, it's a scam.
Click to expand...
I thought everything was a scam.....?

Bruzilla said:
That's the same deal in Venezuela too. What sucks is it used to be almost the same here. Up until 2006, it wasn't legal to sell West Texas Intermediate Crude (WTIC) on international energy commodities exchange markets. WTIC had to be sold on domestic markets where prices were monitored for speculative swings and controls were in place to limit them. That all changed in 2006 when our wonderful Congress snuck some wording into an energy bill that repealed that limitation and WTIC could be sold on international markets.

What was the result? If you look at London's ICE exchange, they averaged about 70,000 oil trades a month before the law was changed. By March 2007 after the law had actually gone into effect they were up to 200,000 a month and they had the first 1,000,000 trade month in their history in July 2007, which you may remember was when oil prices spiked here in the US. This trend would have continued were it not for the housing collapse. Also keep in mind there were no increases in demand from China, or India, or the US that drove this trading. This was all done 100% by speculators who rushed into the energy markets once they saw the other markets falling and they needed a safe haven for their funds.

This is why the concept of supply and demand between oil users and producers went out the window a long, long, time ago. The prices are determined by the supply of oil futures and demand from speculators and investors, and has nothing to do with how much gas is actually used.
Click to expand...
What part of 2006 did that change take place because in November 7, 2006 — California Representative Nancy Pelosi and Nevada Senator Harry Reid lead the Democratic Party in taking control of both the House and the Senate in the 2006 congressional elections, the first time in 12 years the Democrats secured control of both houses of Congress simultaneously.
 
rebootej said:
Hey cool to see some other oil guys on here! I agree the money spent was mind boggling at first. Curious what you guys do and where you are based? I'm a mudlogger out in California been doing it about 2 and a half years now.
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I faced for the past few years but I'm in the office now. In the eagleford shale like bruzer.

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Richard Cranium said:
Don't know how true this is, but I heard that we import oil that that we use and export oil that is drilled here. If it ios true; what a racket!
Click to expand...

I believe Venezuela buys most of our oil. They refine it then ship it back to us.

- - - Updated - - -

Moparsmitty said:
If guys like Steve are making good money working in the oil industry it makes you wonder what it must be like for the big boys in the boardrooms of these companies. They must have trucks full of cash waiting to be taken to the airport and flown to their offshore secret accounts in the Caymans. It's nice of them that a little of the $ is actually making it down to the guys that are doing the actual work.
Click to expand...

To be honest I always thought this. I know the corporate guys make some cash but the real money is in the field. Frac Consultant's make 1200 to 1700 a day. No I am not missing any decimals. That's a day rate. Plus 50 a day per diem. But they have to stay on location for 3 weeks at a time. Maybe longer.
 
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