Economist On Sustainability of Low Oil Prices
"Demand for oilfield equipment and services has outstripped supply, which has also increased development costs. Even before the latest swoon in oil prices, overall costs had been outstripping revenues by 2-3% a year. The result is that nearly half of the projects the industry has under development will need oil prices greater than $120 a barrel to achieve positive cashflow."
Posts
8 comments:
CP, again, the largest suppliers of oil (in Saudi Arabia, Russia, Iran, etc.) will sell in the $90-80 range (and devalue their currencies to gain market share) over the next 1-2 years. Please take a look at this Reuters "EXCLUSIVE-Privately, Saudis tell oil market: get used to lower prices" (uk.mobile.reuters.com/article/idUKL2N0S70J720141012?irpc=932). IMHO, prices won't rise to $100 or greater until an oil production curtail takes place in approximately a 3-5 years.
That's fine. There's stuff with good earnings yield to today's prices even at 80-85 WTI.
I think oil is going to $70. Its going to get ugly.
Know offhand any overleveraged and unprofitable players (with highest lifting costs)? Ideally with near-term maturities :)
$70?!
Oil could fall than $80. Don't forget Russia and Saudis are the lead funders of the civil war in Syria (rebels vs government). And the US government has been putting pressure on the Saudis to produce more barrels so Russian exporters loose market share, state owned companies drain resources, and ruble goes back to 1998 levels.
Ouch:
http://finance.yahoo.com/echarts?s=USDRUB%3DX+Interactive#symbol=USDRUB=X;range=5y
Good time to visit Russia?
Thought this graphic might be of interest to all: http://www.ft.com/ig/features/2014-10-15_brent-crude/breaking_even2.html .
I was thinking maybe some of the guys in the plays that I don't think work... Goodrich?
Post a Comment