Topic: Price of Oil

[Sir Osis of Liver]

No, just tariff everything. Worked great in 1930!

It actually worked pretty well up until the 1980s. What caused the meltdown in the 1929 was wild stockmarket speculation with piles of leverage.

[Sir Osis of Liver]

We're caught in a price war we can't come close to competing in

Ditch free trade, slap up barriers, and protect local companies.

You know, my wife is pregnant with our first child. 5 months along. As you (might) know, I place high value on education, and naturally I hope my future children do very well in school.

However, if they're not at or near the top of the class, then I'm going to have to get the school to expel all the kids above them. Or failing that, I'll just start my own school where only my kids can attend.

^{With blackjack. And hookers!}

You're assuming that effort is rewarded and that the game isn't fixed.

[rrocket]

As you (might) know, I place high value on education, and naturally I hope my future children do very well in school.

http://www.youtube.com/watch?v=M_pfzYD1dXY

[blotter]

What countries and exactly how would they "stand up"?

The US, by losing their shirts on fracking?   

oh you!
 

I'm talking about the others in OPEC.
While the Saudis have obvious control and many of the countries inside OPEC are small and don't have much options aside from going along, there is some discontent and you have to wonder how long OPEC with actually be relevant.    Of the 12 Members, perhaps the United Arab Emirates and Venezuela would bow out or something?   Not sure how the Membership works (in terms of getting out).   

While the Saudis are lowering prices to keep market share, attempting to curb US production, other members of OPEC are suffering on lower prices as well. 

[blotter]

some of you made fun of my comments but it seems interesting how this parts of this article echoes some of my thoughts....

http://www.bloomberg.com/news/2014-11-05/saudi-flexing-met-with-crickets-by-u-s-shale-frackers.html

more specifically:
The decline of global benchmark Brent crude to a four-year low today added to market jitters as Saudi Arabia prepares to meet with its 11 fellow cartel members on the U.S. Thanksgiving holiday Nov. 27. After cutting its price for crude sold to the Americans, the worry is Saudi Arabia will choose not to pare production to help balance supplies and boost prices.

That may work for Saudi Arabia, which has enough cash and other assets stashed away to withstand oil around $50 a barrel, said Dunham, also former chairman and chief executive officer of ConocoPhillips. But “the vast majority of the OPEC producers cannot make their budgets and keep their people happy with prices below $80 a barrel.”

[ArticSteve]

If one is holding an oil stock presently, it better have a good balance sheet because the Arabs are going to keep the taps on for the winter.  This should give the world economies a good stimulus.

If the oil price stays low long enough, many projects will get shelved and supply will come down and then the price will go up.

Consequently, can your oil stock meet the "stress test"

[bye]

We're caught in a price war we can't come close to competing in, and it's been made worse because numbnuts in charge put all his eggs in the commodities basket. It's not like commodities are subject to booms and busts or to manipulation and speculation, are they? 

Truth!  I'm looking forward to booting Harper & Co out.

[blotter]

If one is holding an oil stock presently, it better have a good balance sheet because the Arabs are going to keep the taps on for the winter.  This should give the world economies a good stimulus.

If the oil price stays low long enough, many projects will get shelved and supply will come down and then the price will go up.

Consequently, can your oil stock meet the "stress test"

for someone in the for long haul it should turn into a great time to buy.
the stocks are still holding on pretty good (they got hammered more in our October drop)

[ArticSteve]

One might want to wait for all the tax loss selling to occur first.  Traditionally, the second week of December.

[blotter]

One might want to wait for all the tax loss selling to occur first.  Traditionally, the second week of December.

did you read that article in the G&M?
 

I would also imagine if the price of oil stays low, time will push stock values down.

[ArticSteve]

did you read that article in the G&M?

no, gotta link

[mmret]

You're assuming that effort is rewarded and that the game isn't fixed.

So I can infer then that

1. You think that effort is not rewarded (a very absolute statement)
2. You think that the game is fixed (a very absolute statement)
3. You would support kicking out the smarter kids / kids who worked harder.

Look, I want a meritocracy as much as anyone. (Mostly because I'm pretty sure I'd do better than I otherwise would.) But turning inward and shutting out the world does not result in a meritocracy.

(There's a side issue here of rewarding effort vs rewarding results. I think its not inaccurate to say that I value results more relative to effort moreso than you, and that and you value effort more relative to results moreso than me. Badly worded but you get what I mean, I hope. Of course, its a spectrum, and I'm not saying that either of our positions is necessarily optimal nor grossly suboptimal. That is a philosophical debate with no real end. So I will just ignore the topic in my above points.)

[Sir Osis of Liver]

You're assuming that effort is rewarded and that the game isn't fixed.

So I can infer then that

1. You think that effort is not rewarded (a very absolute statement)
2. You think that the game is fixed (a very absolute statement)
3. You would support kicking out the smarter kids / kids who worked harder.

Look, I want a meritocracy as much as anyone. (Mostly because I'm pretty sure I'd do better than I otherwise would.) But turning inward and shutting out the world does not result in a meritocracy.

(There's a side issue here of rewarding effort vs rewarding results. I think its not inaccurate to say that I value results more relative to effort moreso than you, and that and you value effort more relative to results moreso than me. Badly worded but you get what I mean, I hope. Of course, its a spectrum, and I'm not saying that either of our positions is necessarily optimal nor grossly suboptimal. That is a philosophical debate with no real end. So I will just ignore the topic in my above points.)

To thoroughly abuse the metaphor, if some kids are given the answer key, it's not a level playing field, and they aren't putting in the same effort as those actually following the rules. In the case of oil, having easy access, low, low wages, and no regard for the environment, some countries are at a huge competitive advantage. Adding tariffs to compensate isn't beyond the pale.

I'm all for individual achievement, as long as the weakest in society aren't taken advantage of, and those at the very top don't have undue influence.

[tpl]

The normal state of humanity ( since the invention of agriculture anyway) is the Golden rule.

He who has the Gold makes the rules.    The few at the top believe quite rightly that they should make the rules.   Works for Capitalism and even more so for the various varieties of Socialism and Communism except that in most of those cases you can replace Gold with Guns.

[Snowman]

SNC preparing for sub $80 oil for extended period: http://www.theglobeandmail.com/report-on-business/snc-lavalin-to-cut-4000-jobs/article21473877/

[Sir Osis of Liver]

We're cutting too.

[Northernridge]

So, is there enough blood in the streets yet?

In other words, are we facing more downside or upside from here? Time frame doesn't really matter.

[Sir Osis of Liver]

So, is there enough blood in the streets yet?

In other words, are we facing more downside or upside from here? Time frame doesn't really matter.

I think it depends on the duration. My gut's telling me to batten the hatches.

[Northernridge]

So, is there enough blood in the streets yet?

In other words, are we facing more downside or upside from here? Time frame doesn't really matter.

I think it depends on the duration. My gut's telling me to batten the hatches.

I agree. I'll stay hunkered down only because I don't think oil prices are going to suddenly shoot back up.

But they will climb again.

Reminds me of useful investment advice...When you want to get hit by a train but don't when it's coming, stand on the tracks.

[blotter]

So, is there enough blood in the streets yet?

In other words, are we facing more downside or upside from here? Time frame doesn't really matter.

I think it depends on the duration. My gut's telling me to batten the hatches.

that's my gut too.   the oil producers (all involved) do not want to shut off the taps unless forced (can't afford to continue).  So inventories will remain high, keeping prices low.   The only thing that will turn that around will be once production is lowered or consumption increases.

It's likely that it'll be a while any of those happen.   And the way I see it is IF it comes to NA production starting to shutter (due to costs)....  we're going to see some bumps in the road for the Canadian and American recovery.   Be it the oil sands or the fracking in the US, if those productions start coming off line, that'll be North American workers finding themselves laid off, which in turn will slow consumer spending, which in turn.........  well you know.

The other possible side story is IF / WHEN the now Republican ruled US political landscape pushes to get the XL pipeline which **may** help all NA producers get the product to markets.


Needless to say, eventually the prices will bounce back...