WTI is $38/bbl

[Chargerjase]

Well, if you're willing to drive 100+ miles a day to go to work, then it must be worth going to. But again, you guys had good jobs, at good pay, and life was great while the boom was on. And a lot of us were paying those gas prices without even having jobs to go to. Did you ever write in here "Man, I feel bad about having this job knowing that the only reason I have it is because everyone is paying for this high-cost oil?" Of course not. You went to work, you got paid, and you were happy, and you would still be happy if prices were over $100 a barrel.

The guys I do feel sorry for are the Canadians. They not only pump 100% of their national oil needs on their own soil, but also export enough to us to be one of our largest suppliers, and yet the price they pay at the pump is the same as ours to within +/- a dime or so because every drop of that oil is sold on the global markets. That would be like me paying the same price for oranges grown down the street as for oranges shipped over from California.

Gas is $8 a gallon where I live. That would make your eyes water when you fill up your monster truck. I hardly think that the gas prices in the US are anything to get upset about. Also Gdrill makes a good point, when oil is strong, the economy is strong.

 

[Cranky]

Gas is $8 a gallon where I live. That would make your eyes water when you fill up your monster truck. I hardly think that the gas prices in the US are anything to get upset about. Also Gdrill makes a good point, when oil is string, the economy is strong.

Right but what's making your fuel prices so high? What are the taxes and what are they paying for? Yup, our fuel is fairly cheap and if you figure for inflation going back to the late 60's, most will find that our cost isn't that much higher than it was back then.

 

[MT_Mopar]

Here's my take.
I've been in the oilfield since 1987. I have made a career of it. There have been good times and bad times. The price has been anywhere from $35bbl up to $100+ and back to where it is now. The only thing the high price did for me was ensure steady work. It also ensured a strong economy which in turn ensured steady work in the construction field, the housing market, the automobile industry etc. It affects everyone, at least here in Alberta. When the oil patch slows down, Alberta feels it. I have been through several slow times but this is by far the worst. Oil is now a shareholder commodity. When the price is high the shareholders make money. When it's low they stop drilling. So, it is the shareholders who enjoy the $100bbl oil, not the oilfield worker. In fact when the price goes up and down it hurts all of us more than we even notice. Example: A loaf of bread in the store. The bread is delivered on trucks. The price of oil goes up the price of diesel goes up as does the price of tires (tires are made with oil). The cost of delivery is increased, hence the price of the bread increases. The price of oil goes down, sometimes the price of diesel goes down, but have you ever seen bread or tires go down? Now the trucking company and store owner enjoy a greater profit as well. But you and I are paying more for our goods! When the price goes up again the cycle repeats. It's not really that cut and dried, but it's very close. Changing oil prices doesn't save you or me any money, they cost us and make the corporations enjoy greater profit margins. If you want a strong economy, the price of oil has to be strong. You are not going to get "cheap" gas from anywhere in the world ever again. The oil companies are in business to make money (they could and did afford to drill at the lower prices, but the profit margins have changed their policies) and the price at the pump is relative to what you and I think are the norm. Sorry to say, but the days of cheap gas are long gone, they went away with the $3hr minimum wage. And like it or not, a weak oil patch relates directly to a weak economy.

Sincerely
Career Oilpatch Trash

Love that Energy Biz! :hello2:

Keep up the good work boys! Here's one for ALL of you...

[video]https://youtu.be/9yXzZTYjUl0[/video]

 

[Kern Dog]

I used to do the same thing with home construction. When it was booming, I was also driving 50 miles and more one way to work and making good money but when the economy tanked and money got tight, the 'party times' stopped...IE, had to go look for work elsewhere even tho I wasn't partying. Was too busy working and sticking my money into my hot rod and actually managed to save some of it for the lean times. It's not just the oil field that's affected when things turn down. Housing seems to still be doing well (at least around here) but when you look at our economy overall, it's still not in the best of health and any sector that goes dead is a shot in the head and not in the arm.

50 miles?
I would be ecstatic to have work within 50 miles! My current site is 223 miles round trip. Why would anyone drive that far???
I am 5 years from reaching my 30 year milestone. This company has great people and they are not Nazi-Crazy about those restrictive OSHA regulations. Excessive regulations kill spirit and a companies profits.

 

[Bruzilla]

Gas is $8 a gallon where I live. That would make your eyes water when you fill up your monster truck. I hardly think that the gas prices in the US are anything to get upset about. Also Gdrill makes a good point, when oil is strong, the economy is strong.

That's an argument that I remember from when I was a kid. When has hit .40 cents a gallon, my Mom used to rant "they'll have no peace in their butts until gas hits a dollar like it is in Europe!" Every time gas goes up in the US, we hear about how much worse it is for folks overseas. But we don't live overseas. We don't tolerate outrageous taxes on our gas. And we never want to pay a penny more than we have to.

It sucks that you guys pay $8, but that's an issue you guys need to work out. We're gonna keep pushing for $1 a gallon gas.

 

[Mocajava]

I am also in the patch and have been since '74, seen it up and down and survived. This is driven by the Saudi's and they will not let up until the world is crippled with the pricing. Projectionists have it correct with their saying they won't let up until they reach lift costs and drive most of the independents and smaller countries into desperation mode. Production will reduce or shut down when the oil price is at what it takes to get it out of the ground. This could be in the $20 range depending on field and local. The trickle down effect is what all of us will see when the oil support industries (and YES, there is a vast network there) are laying off and going under also across our US. I would hope that with US usage declining as well as the potential for our OWN production/resources to increase due to the shale fracturing technology booming across the US, our country could finally tell the middle east to have their oil over their cereal in the morning, WE are self sufficient! In Alaska, 80% our our state revenues derive from oil production, taxation due to production plus the support industries. If the production revenues/taxes ceased, the citizens of Alaska could not afford the taxes to support our state government if it came to trying to replace that lost revenue and maintain even a minimal of state services. At only 650,000 people, every dime we made would go into the state treasury. Yes, there is an impact to us in "the patch", but this round could go much further then just us...all of our neighbors would feel it also. Just my two cents worth...

 

[Bruzilla]

Blaming this on a Saudi price war is a bit simplistic. The real issue for the Sauds wasn't price, it was market share. There has been a growing problem in OPEC of states like Venezuela, Russia, Nigeria, Algeria, and Iran using their oil money to pay for military adventurism or support Socialism instead of investing like the Saudis do. This means the money leaves these countries as fast as it comes in and they're always needing to pump and sell more oil to get more money. Since the Saudis are the biggest producer, they are expected to stick to their production quota, but the rest of these countries were routinely and increasingly over-pumping their quotas and under-cutting Saudi Arabia's market position.

That was the drive for Saudi Arabia to refuse to reduce production as the oil glut started becoming a factor in the market. They decided to place market share ahead of price, and if that screwed over the smaller countries so be it because they had been screwing Saudi Arabia for decades. I suspect what the Saudi end game is will the dissolution of OPEC, or at least getting rid of the "problem children" like Venezuela, Nigeria, Iran, and Russia, et al. I think what would be best for them in the long run would be to create an OPEC 2.0 that would include the US and Canada.

The Saudis not only have huge cash reserves, but much of their investment capital is in things like transportation stocks that increase in value when oil is cheaper, so they're making money whichever way it goes. They can weather the storm of $30/barrel oil for a long, long, time, and the problem children can't, so I think the Saudis will wait until those economies collapse before making their next move.

 

[coronet340]

I have to disagree. Market share may have been a factor but I beleive the main goal is/was to hurt the west.

""It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought," the Saudi Arabian Monetary Agency said in a recent stability report.

Indeed, the situation for Saudi Arabia has become so dire that it had to sell $4 billion of bonds in the past year, the first time it's sold that much debt in eight years. "We expect to see an increase in borrowing," Fahad al-Mubarak, head of the SAMA, said in July, according to the Financial Times. And Saudi authorities are reportedly looking to cut $102 billion in capital spending in response to the drop in oil prices, according to Bloomberg.

Crude accounts for about 90 percent of total export value and around 80 percent of total government revenue.

http://www.cnbc.com/2015/08/26/saudi-arabia-hangs-on-with-cheap-oil-but-for-how-long.html

 

[SteveSS]

Yep I need oil to be at $90/bbl for exploration.

 

[Bruzilla]

Yeah, a lot of CW folks have been saying Saudi Arabia's actions were driven by competition from US and Canadian production, but if you go back three years before the decision was made, US and Canadian competition was not much of a discussion point at OPEC meetings or with the Saudis. The talk was market share, market share, market share.

The Saudis had been warning their fellow OPEC members since 2011 that they would take this action if members states did not stop abusing their quotas and they didn't think the Saudis would go through with it. They were wrong.

 

[67GTX440]

I had some firm in Colorado cold call me last week wanting me to invest 50K to 200K in new well drilling. They sent me a spreadsheet showing the fabulous return I would receive on my investment based on an oil price of $55. They said I did not have time to think it over or do any due diligence as the whole subscription would be sold out in two days. Are there really people stupid enough to send these folds money?

Yep I need oil to be at $90/bbl for exploration.

 

[coronet340]

Hell $50/bbl a would be us.

 

[Richard Cranium]

So is now a good time to invest in Exxon Mobil?

 

[Coyoteduster]

So is now a good time to invest in Exxon Mobil?

Not yet ... (IMHO)

 

[coronet340]

Not yet ... (IMHO)

I agree. If the Iran deal falls apart (hopefully) I'd buy that day. If it goes through, wait a few months. Stocks will be cheap when oil falls another $10/bbl.


Although, I don't like single company stocks. Too volatile and subject to criminal acts. Enron anybody? Ironically, EOG (Enron Oil & Gas) is up $5 a to $75.99 a share.