$50 oil, now what?

[HiTempguy1]

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Well they aren't exactly "predictions" 8n the sense you mean. The futures curve is a factual reporting of what contracts for delivery on those dates are really selling for.

I think they are predictions in the exact sense I mean, except that I misspoke when I suggested it was Bloomberg (they are just reporting). Traders are predicting that oil will be worth less than the futures they are currently locking into, hence why they are purchasing them. Now, I'm no commodities pro or anything, but does anyone in this thread ACTUALLY think oil is going to be $52/barrel in Dec 2019? I would suspect it will be higher (at least $60, man, I should get into commodity futures apparently. I suspect the AI's have taken over that field though)

https://ycharts.com/indicators/world_oil_consumption

Oil consumption per year has continually increased. USA oil output peaked in 1970 at a higher output than even they currently do with shale. Oil consumption continues to increase even now, and especially with 1billion+ of the worlds population experience rapid movement into middle-class incomes, we might even start to see serious demand in growth. As you pointed out in gas prices, USA gas use is at an all time high.

Edit-
Apparently smart people say I am wrong until at least 2020.

http://energypost.eu/us-shale-oil-the-limits-to-growth/

[ExtraSlow]

Oil and gas demand projected to increase for decades. Gestalt, I assume this is fake news and a more accurate prediction would be that demand has already peaked and will fall off a cliff within weeks?
http://business.financialpost.com/pm...l-demand-grows

[ExtraSlow]

WTI price curve from bloomberg courtesy Arc Energy Research.


Strong backwardation means the incentive to store oil is gone, this is part of what's driving storage draws worldwide, and those draws are what's underpinning rising prices. Think this is a feedback loop that can keep feeding itself? Will the rising US rig count and production curtail this rally?

[Darkane]

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WTI price curve from bloomberg courtesy Arc Energy Research.


Strong backwardation means the incentive to store oil is gone, this is part of what's driving storage draws worldwide, and those draws are what's underpinning rising prices. Think this is a feedback loop that can keep feeding itself? Will the rising US rig count and production curtail this rally?

Interesting. If we can get WCS to markets by 2020 with say a $7-10 differential, and our dollar at $0.80, who cares if oil hits 80 or higher.

A shitload of money will be made in Alberta again. The problem right now is getting our product to market. Thanks governments.

[ExtraSlow]

Export capacity constraints are a big part of the picture. Two new major pipes would help a lot, and if one of those pipes made it to tide water that's even better.

Remeber Brent price is usually five to eight bucks above wti, and that Irving terminal in new Brunswick would get pretty close to Brent. The question is how much if a ransom will be paid to the "stakeholders" along the route? I'd say ten bucks a barrel minimum in "social licence fees" m

[SKR]

Can't we just keep on melting all the ice, and then use the port at Churchill and go around all those frenchmen?

[ExtraSlow]

Opinion piece in JWN today.
http://www.jwnenergy.com/article/201...bets-new-high/

[ExtraSlow]

Chart of the week, and my commentary.

Based on an estimate I remember that OCED accounts for around 60% of worldwide storage of petroleum products. Eyeballing that chart, it looks like the two lines total up to around 2800 million barrels in storage, which would be something like 4700 million barrels stored worldwide.

The world consumes somewhere around 97 million barrels of oil a day currently. Some quick marth says to me that we have 484 days of supply in storage. Clearly the economy can't function on 0 days of storage, so what's a healthy number? If you owned a large refinery in India or China, how much oil would you want in your tanks or in boats already headed towards you?

[ExtraSlow]

Have had a lot of good news on worldwide oil prices in the last month, but how much of that translates into improvements for Canadian oil? Depending on the blend you compare, we are getting $20-$25 barrel less than Texas. Even if our plays are profitable, they are starkly LESS profitable than plays in US, so investment dollars continue to stay down there.

It's interesting to read the comments in this thread from 12 months ago, and see how little has changed.

[Gestalt]

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Have had a lot of good news on worldwide oil prices in the last month, but how much of that translates into improvements for Canadian oil? Depending on the blend you compare, we are getting $20-$25 barrel less than Texas. Even if our plays are profitable, they are starkly LESS profitable than plays in US, so investment dollars continue to stay down there.

It's interesting to read the comments in this thread from 12 months ago, and see how little has changed.

The wars will help our prices. But tar has always been $20 to 30 cheaper then light oils. As our proportion of production of tar has gone up, the price discount will get worse.

[ExtraSlow]

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The wars will help our prices. But tar has always been $20 to 30 cheaper then light oils. As our proportion of production of tar has gone up, the price discount will get worse.

That's not exactly what is causing the discounts. The extra heavy oil produced in California for instance, fetches much higher prices than similar products produced here.

[Gestalt]

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That's not exactly what is causing the discounts. The extra heavy oil produced in California for instance, fetches much higher prices than similar products produced here.

Thats not correct. It because California produces vwry little oil and has local refining caoacity 3 or 4 x higher then it ptroduces.

[killramos]

So what you are saying is having low supply relative to local demand leads to them fetching better prices.

Wait...

Fuck it has been months since I responded to the local idiot, fell off the wagon...

[ExtraSlow]

supply, demand and transport costs, holy shit we finally got ourselves to basic economics.

[Gestalt]

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supply, demand and transport costs, holy shit we finally got ourselves to basic economics.

Holy shit the density is pulling me in. They have more demand as they are a huge net importer and even mire massive refinary. Alberta is trying to export a massive surplus of tar and low on refining capacity. They also support there locals especially around bakersfield. They oil market is there own. They have specific biases against certain syates and canfiab oil.

[dirtsniffer]

Can we ban the troll already.

[Darkane]

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Have had a lot of good news on worldwide oil prices in the last month, but how much of that translates into improvements for Canadian oil? Depending on the blend you compare, we are getting $20-$25 barrel less than Texas. Even if our plays are profitable, they are starkly LESS profitable than plays in US, so investment dollars continue to stay down there.

It's interesting to read the comments in this thread from 12 months ago, and see how little has changed.

Not as much new money here for sure.

Legacy producers are now getting some bank out of prices. $50 USD for WCS is major profit.

That’s usually 12-20$/bbl netback.

[Gestalt]

looks like the pipelin is illegal after all. https://www.theglobeandmail.com/opin...p-an-oka-like/

[Darell_n]

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looks like the pipelin is illegal after all. https://www.theglobeandmail.com/opin...p-an-oka-like/

You clearly didn't read it.

[J-hop]

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You clearly didn't read it.

Hahaha, no kidding.