kinda crazy to think we don't already have a thread on this but after today's late day plummet i think it bears discussing. now sitting firmly under $79/bbl after dropping $2 today in a matter of minutes. what are some of your thoughts? i've had conversations with people much smarter than me that think $70-$75 is probably the norm for the short term horizon (3 months or so) with $80-$90 doable moving into next year. fortunately most of the major shale plays in texas are profitable in the $35-$45 or $45-$55 range so you won't see many drillers stop drilling existing wells but we're already seeing freezes in new wells. this has a pretty significant ripple effect to the services companies. here's hoping the global economy (cough*china*cough) can reverse course and that opec cuts supply in the near term.
yes very weird indeed. c'mon evil oil companies... get back to manipulating!!! just goes to show you how foolish a lot of folks are. Houston's economy is interesting, though. reduced prices on oil obviously hurt the upstream side but typically has the opposite effect on downtsream groups which make up a very large part of our local economy. i'd be interested to see what the net effect would be.
Houston has one of the most overvalued housing markets in the nation right now. I've been out of the area for a while, but a nice correction in the market will entice me to look into local properties. I know a lot of folks work in oil and gas here, but sustained lower oil prices will wreak havoc on the local economy and lead to aforementioned lower housing prices.
As OP said, this will have a very interesting effect on the local economy. Downstream and refining operations are expanding, baby boomers are retiring, and kids are graduating with degrees. As a stakeholder in this industy and in the local labor market, I'm very intrigued.
We are a services company in the o&g industry and we have been slow for about 6 months now.. so this is horrible timing. Already talk of internal restructuring and the worse news is, Jan is the time when you either get your yearly increase or a pink slip Been looking for a new job.. no luck there.
Umm, it's OPEC which has caused this. OPEC announced they were lowering their crude prices recently, specifically to combat the growth in oil-production in the United States. Those guys can fight it out all they want if it means lower prices at the pump.
I wouldn't mind seeing some lower home prices. The fam and I are just about to move back to the area. Planning to rent for a year just because both of us just started new jobs and wanted to be more stable before buying. I've been surprised to see what people are getting, especially up in The Woodlands area where we're looking. Neither of us are in O&G, so it would only be good for us for prices to go down some.
Do you have any sources cite for this claim? AFAIK, Libyan production has been causing the recent slide in prices, but Venezuela, Nigeria, Algeria, Iraq and Iran have not called for lower crude prices. Not sure any member state has announced that they want lower prices.
Shale oil has added a lot of extra supply that didn't exist previously OPEC member countries are cheating -- producing more than they have said they would Global economy continues to struggle lots of reasons.
Forgot to mention: other OPEC countries that are pretty dependent on oil revenue are quite pissed off at the Saudis
they always say that the prices will dip for a while. so look for gas to shoot up to $4.75 in about 2 years after some global catastrophe.
Um guys lol OPEC? The reason for this is directly tied to the Saudis, who repeatedly do what they want and usually goes against OPEC. Saudis are the major player and having been cutting prices consistently for a bit. A glut has been created so prices are coming down like they should, you can't keep prices high and now allow for more production without expecting this outcome. http://www.bloomberg.com/news/2014-11-03/brent-falls-third-day-on-speculation-saudi-will-discount.html
Coal-burning plants shutting down or switching to gas, foreign refiners building GTL and ethane crackers on the Gulf instead of using naptha at home, but a global gas market?
oil and commodities dropping are a function of the rising dollar at this point. i think the breakeven is around $65 a barrel
This is all the Saudis. They want oil to stabilize around 70ish or so for a while, and have made no secrets about it.
Ok, though the Saudis may be the main factor for this. Another factor adding fuel to the fire is that the dollar index is skyrocketing. As a result oil and commodities are taking a hit. You can not deny the opposite correlation between the two.
