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936horn

By 936horn
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Pescado_Rojo
Pescado_Rojo

I bet you could score a Lafayette 10 for a mani/pedi gift card and a pound of boudin right now.  I was sitting in a Starbucks by the med center in Laffy once, and a brand new white Escalade, lift

Rimbo
Rimbo

If you're Trump right now, you're watching Fox News, eating a cheeseburger, and getting mad about the lyin' media and preparing your next tweet about how some lupus treatment should be given to your s

fattyflattie
fattyflattie

My time finally came last Friday AM. I have survived around a dozen, give or take 1-2, since ‘08.  I was consulting for a project set to go in ‘22, but with all the uncertainty, it sounds like they’ve

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Eastwood

Eastwood 4394

Posted
Posted
11 hours ago, ryskey said:

Yes.  Either they cool it or something breaks really bad.  Like MBS being overthrown, or Rosneft stock goes to 0, or Iran launches missiles that actually hurt.  And I don't think anyone truly understands how detrimental even $20/bbl is for existing production.  A lot will be generating negative margins.

COVID is a one-time event.  It's simply an offset in inventory, albeit a very big one.  The fundamentals of supply and demand will still exist afterward.  2021 was already going to be a structural shortage due to lack of shale growth and lack of megaprojects.  Guyana is not big enough to matter much.  It's going to take a while to burn off that COVID inventory, but the ship was already headed a certain direction and it's impossible to turn around fast enough to prevent a price spike at some point.  COVID just made that price spike more violent.  Don't know if it happens in '21 or '22 but it's going to happen.  You can't pull this much capital away from this industry and simultaneously expect oil prices to remain depressed.

I think we're back in the $40s by Q3 or Q4.

We've got 13 days left under the current OPEC+ agreement. Best case scenario is both Putin and MBS see the light during that time and come together on a new OPEC+ agreement. Worst case scenario is that these guys have made it personal. Then we'll be hurting as long as both of them is still in charge. My bet is on MBS going first, for sure.

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stone oak

stone oak 639

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Posted

Unnerving.

https://finance.yahoo.com/news/wpx-energy-cuts-spending-400m-143402418.html

 

Oil prices could fall below zero: Analyst

Spoiler

Plunging oil prices could be headed a lot lower – possibly below zero, according to one Wall Street analyst.

West Texas Intermediate crude oil, the U.S. benchmark, fell by more than 10 percent Wednesday to near $24 a barrel, a level last seen in April 2002.

“Oil prices can go negative,” wrote Paul Sankey, managing director at Mizuho Securities.

CORONAVIRUS CHOKEHOLD ON US WORSENS OIL INDUSTRY'S PAIN

The COVID-19 pandemic has brought the U.S. and global economy to a standstill by prompting “shelter in place” orders, social distancing between people and the cancellation of non-essential travel. The sharp slowdown in economic activity has curtailed the need for oil.

If that weren't enough, Saudi Arabia recently slashed oil prices and raised output after Russia refused to join OPEC in deepening production cuts.

Oil is a 100 million barrel-per-day market, but Sankey says it’s possible that the economic fallout from the pandemic could zap demand, creating a 20 million barrel-per-day surplus.

He says the “physical reality” of the market is that oil is pumped out of the ground and has to be consumed or stored. When the cost of storage goes high enough -- or space runs out -- companies might pay customers to take it.

For now, President Trump has ordered the Department of Energy to take advantage of low prices by stepping into the market and buying oil for the Strategic Petroleum Reserve.

The reserve can build at 2 million barrels per day, meaning that it has four months until it’s at capacity, Sankey said.

By then, he added, high-cost oil from the Bakken shale formation in the U.S. or bitumen from the Canadian oil sands, "prices negatively because it exceeds needs" and requires storage, Sankey wrote. “Negative prices are simply a higher cost of storage than market.”

Sankey isn’t the only one on Wall Street who is sounding the alarm about the coming flood of oil.

Excess supply from OPEC and Russia, coupled with crumbling demand "are leading to concerns about a surplus that could overwhelm global storage,” wrote Francisco Blanch, a commodity strategist at Bank of America.

He warns the demand destruction caused by COVID-19 and the price war between Saudi Arabia and Russia could cause inventories to swell by 900 million barrels in the second quarter alone. He estimates the world currently has about 1.5 billion barrels of available storage.

Blanch’s worst-case scenario isn’t as dire as Sankey’s.

CLICK HERE TO READ MORE ON FOX BUSINESS

“In a severe scenario, if the market struggles to find a home for surplus barrels, then oil prices might have to trade down into the teens,” he wrote.

 

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stone oak

stone oak 639

Posted
Posted
23 minutes ago, stone oak said:

Unnerving.

https://finance.yahoo.com/news/wpx-energy-cuts-spending-400m-143402418.html

 

Oil prices could fall below zero: Analyst

  Reveal hidden contents

Plunging oil prices could be headed a lot lower – possibly below zero, according to one Wall Street analyst.

West Texas Intermediate crude oil, the U.S. benchmark, fell by more than 10 percent Wednesday to near $24 a barrel, a level last seen in April 2002.

“Oil prices can go negative,” wrote Paul Sankey, managing director at Mizuho Securities.

CORONAVIRUS CHOKEHOLD ON US WORSENS OIL INDUSTRY'S PAIN

The COVID-19 pandemic has brought the U.S. and global economy to a standstill by prompting “shelter in place” orders, social distancing between people and the cancellation of non-essential travel. The sharp slowdown in economic activity has curtailed the need for oil.

If that weren't enough, Saudi Arabia recently slashed oil prices and raised output after Russia refused to join OPEC in deepening production cuts.

Oil is a 100 million barrel-per-day market, but Sankey says it’s possible that the economic fallout from the pandemic could zap demand, creating a 20 million barrel-per-day surplus.

He says the “physical reality” of the market is that oil is pumped out of the ground and has to be consumed or stored. When the cost of storage goes high enough -- or space runs out -- companies might pay customers to take it.

For now, President Trump has ordered the Department of Energy to take advantage of low prices by stepping into the market and buying oil for the Strategic Petroleum Reserve.

The reserve can build at 2 million barrels per day, meaning that it has four months until it’s at capacity, Sankey said.

By then, he added, high-cost oil from the Bakken shale formation in the U.S. or bitumen from the Canadian oil sands, "prices negatively because it exceeds needs" and requires storage, Sankey wrote. “Negative prices are simply a higher cost of storage than market.”

Sankey isn’t the only one on Wall Street who is sounding the alarm about the coming flood of oil.

Excess supply from OPEC and Russia, coupled with crumbling demand "are leading to concerns about a surplus that could overwhelm global storage,” wrote Francisco Blanch, a commodity strategist at Bank of America.

He warns the demand destruction caused by COVID-19 and the price war between Saudi Arabia and Russia could cause inventories to swell by 900 million barrels in the second quarter alone. He estimates the world currently has about 1.5 billion barrels of available storage.

Blanch’s worst-case scenario isn’t as dire as Sankey’s.

CLICK HERE TO READ MORE ON FOX BUSINESS

“In a severe scenario, if the market struggles to find a home for surplus barrels, then oil prices might have to trade down into the teens,” he wrote.

 

fucked up the link there

https://finance.yahoo.com/news/oil-prices-could-fall-below-152446634.html

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ryskey

ryskey 447

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Posted
1 hour ago, Dr. Beeper said:

Paul Sankey is a fucking moron. 

Yes.  That dude needs to be publicly embarrassed for fearmongering and generally being a dumbass.  

If oil price goes to zero, that means prices at the wellhead are way less than 0.  At that point you have operating costs and negative revenue, and every well in the world that can be shut, is shut in.

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clapclapclap

clapclapclap 9000

Posted
Posted
Just now, The Royal We said:

At what point does XOM become a buy?  Currently at ~$32.50/share - you have to go all the way back to 2002 to find these levels.

Never thought I'd see it.  Was $104 six years ago.  I'm almost hoping that there's proof of a Saudi link to 9/11 and it is released, so we'd pull our troops and bomb the hell out of their fields, refineries, and ports.  Would give a price jump until the post-CV recovery is under way.

(Only 95% kidding....)

Seriously, though, the POS Saudi royalty needs to eventually pay in some way for sucker punching everyone as a worldwide crisis was starting.  Russia, too, but SA was allegedly an ally of the west.

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Fudge Nuggets

Fudge Nuggets 19146

Posted
Posted (edited)
5 hours ago, Eastwood said:

We've got 13 days left under the current OPEC+ agreement. Best case scenario is both Putin and MBS see the light during that time and come together on a new OPEC+ agreement. Worst case scenario is that these guys have made it personal. Then we'll be hurting as long as both of them is still in charge. My bet is on MBS going first, for sure.

Still say we should bomb the shit out of them.  Both of 'em at this point.

Edited by Fudge Nuggets
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Archer

Archer 474

Posted
Posted
3 hours ago, Dr. Beeper said:

I’m starting to doubt whether or not there’s a place for “us”. 

I’m here. Coming up on 20 years since my first summer and 15 years full time and I’m game planning a second career because I’m afraid if I lose what I have now there is no replacing it. 

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Fudge Nuggets

Fudge Nuggets 19146

Posted
Posted

I'm just glad my house is paid for as is my new car.  I have about three years' worth of salary stashed away that I can access in a moment's notice provided our financial system is still open.  Kids better start working on their jump shots and golf swings if they want to attend college, but other than that I can ride it out for a while.

Not sure if I'll be a viable hire when this eventually settles though.

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SimonBolivar

SimonBolivar 10911

Posted
Posted
19 minutes ago, clapclapclap said:

Never thought I'd see it.  Was $104 six years ago.  I'm almost hoping that there's proof of a Saudi link to 9/11 and it is released, so we'd pull our troops and bomb the hell out of their fields, refineries, and ports.  Would give a price jump until the post-CV recovery is under way.

(Only 95% kidding....)

Seriously, though, the POS Saudi royalty needs to eventually pay in some way for sucker punching everyone as a worldwide crisis was starting.  Russia, too, but SA was allegedly an ally of the west.

I mean...

Image result for looming tower book

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OilChuck

OilChuck 12

Posted
Posted

My company was bought out up here in Denver end last year and I was unfortunately cut in January. Found a oilfield sales job in Denver 4 weeks ago, first time in sales after a decade of being a production/completion engineer, oil dropped after my first week, Denver went on lockdown 3rd week. Makes transitioning into sales alot harder.

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Eastwood

Eastwood 4394

Posted
Posted
1 hour ago, Dr. Beeper said:

I’d really really really like to buy production. I have a partner that’s ex large PE direct fund as an ops/evaluations guy. He buys and operates very cheaply. Been on his own for 4 or so years. Has accumulated a nice set of properties. I have no idea how to value what he has right now. 

It's all essentially worthless, right now. There are a lot of marginal wells out there that will quickly test the "reasonably prudent operator" standard for determining if a lease is HBP if this doesn't turn around by Q4.

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DCA_HORN

DCA_HORN 725

Posted
Posted
I’d really really really like to buy production. I have a partner that’s ex large PE direct fund as an ops/evaluations guy. He buys and operates very cheaply. Been on his own for 4 or so years. Has accumulated a nice set of properties. I have no idea how to value what he has right now. 
I agree. Depending on how long this goes the banks are going to own a lot of properties. How that goes this time I'm not sure of yet. It might go like the post 86 crash where its the big boys and mom and pops.
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Archer

Archer 474

Posted
Posted
2 hours ago, DCA_HORN said:
3 hours ago, Archer said:
I’m here. Coming up on 20 years since my first summer and 15 years full time and I’m game planning a second career because I’m afraid if I lose what I have now there is no replacing it. 

Same here. What ideas are you kicking around?

I’d try to hustle some O&G gigs but am considering everything from math teacher to a masters in engineering. Part of it is I need to decide if I want to stay in a 24/7 connected white collar gig or move to a more 9-5 clock in and out. 
 

Things I have kicked around but not deep into:

Teacher (math probably)

Engineering with existing undergrad (Petroleum so could be tough)

Masters in Mechanical or something more widespread 

Electrician 

OTR Trucking 

 

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Trey3216

Trey3216 15325

Posted
Posted
13 minutes ago, Dr. Beeper said:

I strongly suspect they had been unwinding it slowly as CV reared its head. Oil dropped from $60 to $45 the first two months of the year and there was talk of a global recession coming, and you had serious demand destruction in the. OST important market. Nobody wanted to invest in energy for the ~14 months prior to March 6th. I can’t see this taking down a large hedge fund. Could be way off (you would know better than me) and if so those guys are idiots. 

Not necessarily know better than you.  Just that even as of last week there were still a lot of oil longs on the COT reports.  Natty short remains at all time highs.  

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Blotto

Blotto 23427

Posted
Posted

USO is currently trading at $5.05. $5 call options expiring Jan of 22 are currently selling for $1.65 which translates into a breakeven price of $6.65. USO closed at $6.96 last Friday. I realize that USO has some inefficiencies due to rolling forward futures contracts, but that seems like a tasty wager given  up to 22 months to basically wait for something to drive the price of oil up whether that be better clarity in demand, SA and Russia coming to their senses, war in the ME etc... Didnt make a huge bet, but I grabbed a handful of contracts at 1.65 to see what happens. Hopefully won't be a long term hold, and I can get out after a short term correction. 

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Storm the Field

Storm the Field 5271

Posted
Posted

I'm starting to buy into the idea that either Saudi, Russia or both will tap out long before they were originally posturing. The idea that they're perfectly comfortable producing at $20-30 for "years" is far-fetched, at best.

Kremlin spokesman was already out yesterday admitting that prices had gone too low and they'd be "evaluating near and mid-term forecasts" before deciding whether to rejoin negotiations with OPEC. 

Rosneft stock has fallen over 50% in the past week and is at 5 year lows since Igor Sechin finally got the OPEC deal to collapse. Whoops!

At some point, cutting of your nose to spite your face loses its appeal.

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