Great Depression of 2016

[rufus]

It would be great if I still drove. I doubt lower prices on other items will result from this temporary dip. The Arabs would like to shut down the drilling in the US. They know their day in the sun is over. By flooding the market they may be able to retard the production in the US, but they cannot stop it forever.

They may finance anti fracking movies and other propaganda, but in the end their era is over.

The myth of "Peak Oil" is just that, another liberal myth. Same goes for "Global Warming."

 

[rufus]

Now let's see whose ox is getting gored. http://www.pennenergy.com/articles/...-prices.html?cmpid=EnlDailyPetroOctober272014

It looks like the babies in Venezuela aren't going to be changed that often now.

Sadly, the country is pretty much a one export nation. With all of that revenue they received in the past, you would think that they would have diversified their economy.

Now, I have to wonder what will happen to the House of Saud when they no longer can provide employment and social welfare benefits to their people. Their people are better educated, but with degrees in theology and philosophy. That is a recipe for revolution.

Luckily, the Saudis have invested money all around the world, so they will have something to fall back on when their day in the sun is over.

Exile is much nicer with a lot of money.

 

[oldrooster]

I barely noticed it dropped in my town for 2-3 weeks and no it's up to where it was about amonth ago.... but I live in a college town and inflation is higher here than the rest of the state (including the state capital, and the suburbs of chi town on our side of the state line). The rents here are the HIGHEST on average in the whole state, even tho our job market here keeps dwindling (factories closing and nothing moving in to replace them even low paying jobs)

 

[hemet dennis]

Lower fuel prices are good, and it's caused by U.S. producing millions more barrels a day !

 

[rufus]

You are correct Dennis. Bloomberg showed West Texas Intermediate at $80.70 a barrel today. Natural gas was at $3.57. Somehow, I do not think that reduced transportation expenses will translate to lower prices in the stores. The difference will be eaten up somewhere along the way.

With the price that low, it will cut down on exploration and production. It is better to leave it in the ground than take it out and take a loss on it. Sometimes it is just best to say no to drilling. It is an asset in the ground, but if we take it out it will have to be sold at market prices.

I suspect that after the election we will see export permits issued, and that may improve the price of the product. We can only hope and pray.

 

[hemet dennis]

You are correct Dennis. Bloomberg showed West Texas Intermediate at $80.70 a barrel today. Natural gas was at $3.57. Somehow, I do not think that reduced transportation expenses will translate to lower prices in the stores. The difference will be eaten up somewhere along the way.

With the price that low, it will cut down on exploration and production. It is better to leave it in the ground than take it out and take a loss on it. Sometimes it is just best to say no to drilling. It is an asset in the ground, but if we take it out it will have to be sold at market prices.

I suspect that after the election we will see export permits issued, and that may improve the price of the product. We can only hope and pray.

WTI at $80 wont slow exploration and production. The U.S. will increase production another million barrels a day next year.

 

[rufus]

I am not to sure about that Dennis. My family had four sections of the ranch come out of lease undrilled in 2013. The price of the product had dropped drastically. We refused to release. That stuff has to come up when the price is up. How much more of nothing do we want?

We have some sections that are producing, but despite restrictions in the lease contract, the company deducts compression and transportation cost. We end up with next to nothing. Worse, we have to pay taxes on those wells.

The oil company landsman shows up with a lot of bull, and the next thing you know they are making a huge mess on the land. We would have done better if we had put the land into pecans or fruit production. Sometimes, it is best to just say "NO."

 

[hemet dennis]

I am not to sure about that Dennis. My family had four sections of the ranch come out of lease undrilled in 2013. The price of the product had dropped drastically. We refused to release. That stuff has to come up when the price is up. How much more of nothing do we want?

We have some sections that are producing, but despite restrictions in the lease contract, the company deducts compression and transportation cost. We end up with next to nothing. Worse, we have to pay taxes on those wells.

The oil company landsman shows up with a lot of bull, and the next thing you know they are making a huge mess on the land. We would have done better if we had put the land into pecans or fruit production. Sometimes, it is best to just say "NO."

The bottom line is that production costs have come down and barrels per well have increased. So production is still profitable at $80 a barrel, and will keep increasing.

 

[rufus]

Yes, production will continue on land held by production, but landowners will stop leasing when they get nothing out of the deal. We were holding our breath hoping they wouldn't do something to hold the property. If they bulldoze a drilling pad or start a roadway, they can legally hold onto the leased property.

They deduct for all sorts of things. Even when there is a "no deduction" clause in the lease. To get the money back, the landowner has to sue the oil company. And in Texas, nobody wins a law suit against an oil company. Our leases were crafted by some of the best lawyers in the state, but if does little good when the courts are predisposed to side with the oil companies.

Each landowner has to sue individually. There are no class action lawsuits in Texas. The legal expense makes it not worthwhile. Like I say, sometimes NO is the best answer.

 

[rufus]

Ah! The price of gasoline has really come down. It seems as if Saudi Arabia is trying to hang onto its customers by selling cheap. The US has stopped importing a lot of oil since we now produce a lot more. It sure shows what a big lie the peak oil theory promoted by leftist was. Just another big lie like the global warming lie.