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Thread: OPEC DID NOT CUT OUTPUT?

  1. #21

    Default Re: OPEC DID NOT CUT OUTPUT?

    OPEC can still survive even if oil price drops to $10.

    For those who can still remember that in 1986, oil price collapsed to $10.

  2. #22

    Default Re: OPEC DID NOT CUT OUTPUT?

    The problem now is OPEC only holds 40-50% of the market. They can no longer unilaterally set the price.
    At present everybody wants to cut, but nobody wants to do so unless nobody makes a move on their market share. And the US shale producers are too fragmented, i.e. this makes it difficult for the producers to reach some kind of implicit agreement to cut.

    Before the Vienna meeting, some of the OPEC representatives + Russia met up to try to reach a deal. Because they are in a panic. OPEC producers can withstand low prices, but their economies cannot. Even Saudi Arabia is feeling the pinch, but they have reserves to back up their budget.

    Bottom line, we will see more M&A in the US market over the next year as weaker players are weeded out. The remaining ones can then cut output. Expenditure for R&D probably wouldn't decrease much, but capex and E&P budgets will be hit.

  3. #23
    Senior Member Nikonzen's Avatar
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    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by Jedi View Post
    OPEC can still survive even if oil price drops to $10.

    For those who can still remember that in 1986, oil price collapsed to $10.
    Then a couple years later and another war and voila...oil 100+

  4. #24

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by Nikonzen View Post
    Then a couple years later and another war and voila...oil 100+
    Yes, you are right. Oil price can't be staying at very low level for a long period of time.

    If oil is so cheap forever, what will happen to those oil producing nations? There won't be wars due to oil.

  5. #25

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by ArchRival View Post
    The problem now is OPEC only holds 40-50% of the market. They can no longer unilaterally set the price.
    At present everybody wants to cut, but nobody wants to do so unless nobody makes a move on their market share. And the US shale producers are too fragmented, i.e. this makes it difficult for the producers to reach some kind of implicit agreement to cut.

    Before the Vienna meeting, some of the OPEC representatives + Russia met up to try to reach a deal. Because they are in a panic. OPEC producers can withstand low prices, but their economies cannot. Even Saudi Arabia is feeling the pinch, but they have reserves to back up their budget.

    Bottom line, we will see more M&A in the US market over the next year as weaker players are weeded out. The remaining ones can then cut output. Expenditure for R&D probably wouldn't decrease much, but capex and E&P budgets will be hit.
    This oil crisis is directed by US and Saudi. Don't forget Saudi is a strong allie of US. I believe that they have shorted the global equities and oil futures markets.

    How can oil price collapse at such a rapid speed? It is definitely caused by manipulation. Analysts can come out thousand of reasons on why oil price drop such as global economies slowdown, slower growth in China, Japan in recession, etc. These are old news and how can these events cause a sudden collapse in the oil price. If it is a gradual drop due to lower demand, then it makes more sense; and not at current way of dropping.

  6. #26
    Senior Member Nikonzen's Avatar
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    Default Re: OPEC DID NOT CUT OUTPUT?

    Asia is going to become new fulcrum of the world...Arabia and the west just trying to hold onto petrodollar as tight as possible...bad news for the future...you think food prices are going up now? Just wait... My opinion only and remember I am a westerner. This is political so I will excuse myself from any further comment.

  7. #27

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by Jedi View Post
    This oil crisis is directed by US and Saudi. Don't forget Saudi is a strong allie of US. I believe that they have shorted the global equities and oil futures markets.

    How can oil price collapse at such a rapid speed? It is definitely caused by manipulation. Analysts can come out thousand of reasons on why oil price drop such as global economies slowdown, slower growth in China, Japan in recession, etc. These are old news and how can these events cause a sudden collapse in the oil price. If it is a gradual drop due to lower demand, then it makes more sense; and not at current way of dropping.
    Saudi Arabia wants to screw Iran and Russia for their helping Assad during the Syrian civil war
    But no doubt you are right, the price fall now is probably largely due to shortist and margin calls. Price has diverged from fundamentals.

  8. #28

    Default Re: OPEC DID NOT CUT OUTPUT?

    Many factors to consider.

    Oil is an finite resource.
    Low oil price hurts everyone, even the Saudis.
    The world is gradually moving towards alternative fuel, placing less reliance on crude oil in the future - but not yet.
    US shale oil is still profitable to produce above $45 per barrel.
    China, one of the largest consumer of oil; economy slowing down, demand for fuel also slowed.
    The price drop is also triggered by market sentiments, further dropped when investors stop loss.
    Blue chip oil stocks on sale now. People with cash and holding power would buy and hold. When prices recover, the gain is good.
    Question is when? What if other market factors pushes the world into another recession?
    Last edited by sjackal; 17th December 2014 at 12:39 AM.
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  9. #29

    Default

    I don't care why things happen.
    So, how do we profit from this "oil crisis" now ?
    How about convert our water reservoir into oil reservoir ?
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  10. #30

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by sjackal View Post
    Many factors to consider.

    Oil is an finite resource.
    Low oil price hurts everyone, even the Saudis.
    The world is gradually moving towards alternative fuel, placing less reliance on crude oil in the future - but not yet.
    US shale oil is still profitable to produce above $45 per barrel.
    China, one of the largest consumer of oil; economy slowing down, demand for fuel also slowed.
    The price drop is also triggered by market sentiments, further dropped when investors stop loss.
    Blue chip oil stocks on sale now. People with cash and holding power would buy and hold. When prices recover, the gain is good.
    Question is when? What if other market factors pushes the world into another recession?
    Rouble hurts most. But it will not collapse.

    Oil price will rebound... buy now!

  11. #31

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by ArchRival View Post
    Bottom line, we will see more M&A in the US market over the next year as weaker players are weeded out. The remaining ones can then cut output. Expenditure for R&D probably wouldn't decrease much, but capex and E&P budgets will be hit.
    Ho ho ho, here comes the pain

  12. #32

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by ArchRival View Post
    The USD thought they were smart but they fail this round wo the support of RMB.

    Why would RMB supports them as they could turn around and do likewise!

  13. #33

  14. #34

    Default Re: OPEC DID NOT CUT OUTPUT?

    For the whole of 2014, oil price has tumbled 46%.

  15. #35
    Senior Member Big Kahuna's Avatar
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    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by Jedi View Post
    For the whole of 2014, oil price has tumbled 46%.
    But not the price in our petrol pump

  16. #36
    Senior Member UncleFai's Avatar
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    Quote Originally Posted by Big Kahuna View Post
    But not the price in our petrol pump
    I pump SPC 95. A while back it was $2.12 a litre. Now it is $1.87. Prices before discounts.

  17. #37

    Default Re: OPEC DID NOT CUT OUTPUT?

    Sound like many invest in oil here, and prefer oil to shoot back above 100.

  18. #38
    Senior Member Big Kahuna's Avatar
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    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by UncleFai View Post
    I pump SPC 95. A while back it was $2.12 a litre. Now it is $1.87. Prices before discounts.
    That is minor adjustment...far from "tumbled" When I travel up north...I paid ~RM3 for Ron97 2 months ago...and now it is about ~RM2

  19. #39

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by jopel View Post
    Sound like many invest in oil here, and prefer oil to shoot back above 100.
    Small fries individuals are nothing compared to whole nations who really need oil price to recover. Ie Russia
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  20. #40

    Default Re: OPEC DID NOT CUT OUTPUT?

    Quote Originally Posted by Big Kahuna View Post
    That is minor adjustment...far from "tumbled" When I travel up north...I paid ~RM3 for Ron97 2 months ago...and now it is about ~RM2
    Whether there is an oil crisis or not, Singapore petrol prices can never match our SEA counterparts; not just Malaysia.

    Do you know the reasons?

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