Saudi Arabia to lower oil prices, the houston boom is over

Housing price trend map - http://www.bizjournals.com/houston/...e-texas-home-values-are-rising.html?full=true

 

It's a bad thing because the global oil demand is weak which suggests a weak global economy.

 

Just got word via a second hand source on some of the thoughts of plant leadership from one one of the largest refineries on the Gulf Coast. They're throttling at the moment to wait and see what the oil prices are going to do. Heavy crude is coming in really cheap from the Suadis and Canada. So cheap that it looks like some refiners are being hesitant to jump.

What to do, what to do?

 

You are mixing different causes and effects.
The weak global economy was not the result of low crude oil price.
In simple term:

What we saw was:
Weak global economy -> low oil demand -> low crude oil price

Going forward:
Low crude oil price -> low cost of products + extra individual income/ buying power -> high production -> strong global economy -> high oil demand -> high crude oil price

It's a cycle.

 

Could you explain that some more? What do you mean when you said the refiners are being hesitant to jump?

 

Silvercreek is Pearland...houses were going 10-20K over listing price 6 months ago.

 

What I'm hearing is most companies will wait until the first quarter is through before making major moves. I'm sure there will be a lag effect for the manufacturing, communications and technology sectors.

When prices dropped in the 1980s the supply glut came from the lowest capital intensive producer. Now the supply glut is coming from the highest capital intensive producer. Companies like Catepillar are definitely going to feel a slowdown.

 

Let's just say that part of it is they're not sure if they want to commit thier resources to thier rail racks, docks, or pipelines. Just too many variables surrounding the sources of thier feedstock. Mainly, will it be heavy crude from Canada via rail and pipeline, or heavy crude from the Saudis via their docks? So they're slowing down now, ahead of planned slashes in production for turnarounds during the spring, to let some of the dust settle.

 

Someone told me Transocean will shut down half of their rigs in February if prices don't rise.

 

That would be a cause of the export ban. Every light crude producer must pay homage to an outdated law before shipping their oil overseas. Probably about time to get rid of that one.

 

Maybe they could save some money if they cut the pay of their employees...???

I can't knock that opinion... I actually moved out of the city because of all the growth.

But I don't think what Saudi is doing is temporary... They're trying to suffocate Russia and hurt some other oil businesses in the process. They've actually found a great way to go to war without firing a bullet.

 

houston will have to attract new sectors and technologies to stay relevant in the advancing global scheme in the next 20-30 probably 50 years as combinations of alternative fuels erode away the foundational piece of houstons economy

 

Houston brought in all the investment banks after Enron collapsed and became the hub of paper trading for oil, gas and perhaps more surprisingly de-regulated power. Also, take note of the controversy surrounding the Keystone pipeline and Governor Cuomo finally banning shale fracturing in New York, and realize that Texas will always have a leg up because the rest of the country doesn't actually want to drill or refine this stuff, despite still having the same need for continuous and comprehensive supply.

 

That is the case for every single city.

 

not every city relies on consumer petro fuels as its main lifeblood.

they use the stuff, but what happens to here when they start switching to fuel cells, plug ins, and biofuels?


houston needs to shift in that direction.

a place like silicon valley is always on the next thing so they would be the first to capitalize on a paradigm shift rather than be shafted by it

 

Houston really needs to aid the commercialization of its medical research - essentially the largest concentration in the world. Fortunately the Texas Medical Center has essentially made this objective #1 moving forward and is committing a lot of resources towards that goal. If successful it has the chance to become a real economic engine - it just needs the right leadership. It also looks like NASA is getting a little boost with the Mars mission.

When you think about it, the level of technical expertise we have here is pretty amazing.... Gobs of engineers from chemical to petro to aeronautical to mechanical and civil, doctors and scientists in the medical field, logistical, transportation and marine hubs. There's a lot of talent in this city.

 

Fossil fuels aren't going anywhere anytime soon. In fact, we may be witnesses to the new age of coal.

And you're right. Some cities rely on bicycles, animal drawn carts, and good ole dependable walking.

 

So is Houston still taking it up the butt?

 

we are all taking turns posting from the public computer at the library.

 

My company is. 60% cuts to my team. Ugh. It hurts.

CF, please help me find a job before the end of 1Q!