cheap oil coming!

euroboom13 · 09-06-2013 11:55AM #1

I believe oil prices are going to drop from $104 to close to $80.I have this view because i believe it will help sqeeze out the middle east power, in the world energy markets.I also believe that cheap oil will create a boom in europe that will only be suppressed by high interest rates.

I am interested to here from anyone who has toyed with this idea.
I know all about peak oil arguements.I think the drop is more to do with power broking,but could, if happens, be a very serious problem for investors.

Thanks for your views

Cavanjack · 09-06-2013 05:09PM

euroboom13 wrote: »

I believe oil prices are going to drop from $104 to close to $80.I have this view because i believe it will help sqeeze out the middle east power, in the world energy markets.I also believe that cheap oil will create a boom in europe that will only be suppressed by high interest rates.

I am interested to here from anyone who has toyed with this idea.
I know all about peak oil arguements.I think the drop is more to do with power broking,but could, if happens, be a very serious problem for investors.

Thanks for your views

This lad agrees with you.
http://www.bloomberg.com/video/oil-supply-shock-bent-going-to-50-Fhy6krw2SCKXqIk45rLIrA.html

enigmatical · 09-06-2013 05:18PM

I'd suspect that would also mean the end of any possible Irish oil boom as the cost of extraction is quite high here from what I gather.

Value Hunter · 09-06-2013 05:49PM

Short term (less than 5 years) a drop down to those levels is a possibility as the US regains its oil independence. However it will be a challenge due to price controls by middle eastern countries (if the price drops they cut supply so the price rises again). They require oil to be above $90 a barrel to continue paying there debt, and they'll fight tooth and nail to keep it above that figure.

However the long term trend will only be increases in prices. Worldwide demographics will ensure of this. Worldwide oil depletion is a very real situation, currently 45% of the worlds oil reserves are now completely exhausted. Obviously this was the easiest oil to access so production costs will increase to obtain the remaining more difficult to access oil, while the scarcity of oil will increase simultaneously.

Couple this with a worldwide population increase of 40% by 2050 as well as increased oil demands per person worldwide due to economic advancement for emerging nations, and it paints a clear view of future oil prices.

I don't think the price at the pump will ever fall below €1.00. Unfortunately its looking like between €2.00 to €3.00 per litre will be the new norm within the next ten years

brandon_flowers · 09-06-2013 05:58PM

I think it will fall but definitely not for the reasons you say.

The main reason would be is for the Saudi's to keep all the power. Shale Gas in the US costs about $60 - $80 per barrel/equivalent to lift. A barrel of oil in Saudi costs about $5 - $15 to lift. Therefore to stop the US becoming the so called oil king and completely bossing the market the Saudi's can flood the supply with $50/barrel oil and it suddenly puts the US in a very difficult position. Do they continue to be self sufficient at a loss by using their own oil/gas or do they return to importing?

The Saudi's hold all the aces in this battle because they have by far the cheapest oil in the world and they have already told the other OPEC producers to find their own solutions to the shale gas boom

http://www.rigzone.com/news/article.asp?a_id=126815

It will be of course temporary power brokering, the Saudi's can't do it indefinitely but they have the reserves to keep the US at arms length for a while.

euroboom13 · 09-06-2013 09:32PM

brandon_flowers wrote: »

I think it will fall but definitely not for the reasons you say.

The main reason would be is for the Saudi's to keep all the power. Shale Gas in the US costs about $60 - $80 per barrel/equivalent to lift. A barrel of oil in Saudi costs about $5 - $15 to lift. Therefore to stop the US becoming the so called oil king and completely bossing the market the Saudi's can flood the supply with $50/barrel oil and it suddenly puts the US in a very difficult position. Do they continue to be self sufficient at a loss by using their own oil/gas or do they return to importing?

The Saudi's hold all the aces in this battle because they have by far the cheapest oil in the world and they have already told the other OPEC producers to find their own solutions to the shale gas boom

http://www.rigzone.com/news/article.asp?a_id=126815

It will be of course temporary power brokering, the Saudi's can't do it indefinitely but they have the reserves to keep the US at arms length for a while.

I thought that to cover saudi`s domestic debt it needed oil prices to stay above $80 a barrel.Thats what got me interested in the first place.

euroboom13 · 09-06-2013 09:35PM

enigmatical wrote: »

I'd suspect that would also mean the end of any possible Irish oil boom as the cost of extraction is quite high here from what I gather.

My quess is that is why we are hering such great news on our domestic finds now,before they become unsustanable projects.

brandon_flowers · 09-06-2013 09:50PM

To reply to euroboom, the Saudis currently service their debt with "oil produced " revenue, there is nothing to stop them selling proven reserves to aid that debt like the Brazilians have agreed with China. Again they have so much cheap oil they will always have the greater say.

On the other hand the price will only drop temporarily and the projects offshore Ireland will be developed. The EU is actually getting easier to do business in for oil companies due to "local content" being available from every part of the EU. In Angola, Nigeria, Brazil etc the local content requirement is actually hindering a lot of projects and causing cost over runs. The UK North Sea and West of Shetland is booming again and this is good timing for the Irish projects. A government with no knowledge/idea/initiative will be a bigger hinderance than oil prices.

relaxed · 04-07-2013 06:28PM

Crude Oil (WTI) USD/bbl. 101.12

EUR/USD 1.292.

In euro terms its starting to shoot up again, seems to have gone unnoticed in the media.

Even in USD terms it has not been over $100 in a while.

Renegade Mechanic · 04-07-2013 06:33PM

Very interesting fellas. Following intently.

Hootanany · 04-07-2013 06:38PM

Me too

Renegade Mechanic · 04-07-2013 06:59PM

Hootanany wrote: »

Me too

Wonder if we'll see that drop or it the govt will just increase the taxes on it again?....

euroboom13 · 05-07-2013 12:13AM

brandon_flowers wrote: »

To reply to euroboom, the Saudis currently service their debt with "oil produced " revenue, there is nothing to stop them selling proven reserves to aid that debt like the Brazilians have agreed with China. Again they have so much cheap oil they will always have the greater say.

On the other hand the price will only drop temporarily and the projects offshore Ireland will be developed. The EU is actually getting easier to do business in for oil companies due to "local content" being available from every part of the EU. In Angola, Nigeria, Brazil etc the local content requirement is actually hindering a lot of projects and causing cost over runs. The UK North Sea and West of Shetland is booming again and this is good timing for the Irish projects. A government with no knowledge/idea/initiative will be a bigger hinderance than oil prices.

hope your right.....but i think a fall is coming that will hinder exploration ...i think north sea boom is only sustainable at current prices ...low oil price period ahead.....low oil prices will end crisis in europe and end low interest rates...

relaxed · 09-07-2013 08:31PM

relaxed wrote: »

Crude Oil (WTI) USD/bbl. 101.12

EUR/USD 1.292.

In euro terms its starting to shoot up again, seems to have gone unnoticed in the media.

Even in USD terms it has not been over $100 in a while.

Crude Oil (WTI) USD/bbl. 104.00

EUR / USD 1.279

Expensive petrol on the way.

Kristopherus · 19-07-2013 12:11AM

relaxed wrote: »

Crude Oil (WTI) USD/bbl. 104.00

EUR / USD 1.279

Expensive petrol on the way.

Gone up by 2c in most places this last week:eek:.

DarkDusk · 23-07-2013 02:58PM

I see prices higher from here. Inflation is just finding itself into commodities right now. The last few years we have seen massive inflation in stocks and bonds. Recently, inflation leaked from bonds and into oil. I see bonds going down much further than they are now which means more inflation in commodities to come.

euroboom13 · 29-07-2013 07:34PM

www.businessinsider.com/saudi-prince-alwaleed-warns-on-fracking-2013-7

BloodBath · 04-08-2013 02:55AM

Electric cars are the near future. Lithium battery tech is advancing at a rapid rate with current developments pushing past 10 times their current capacities. This will mean high range affordable mainstream electric cars with 1/10th current fossil fuel prices and higher performance. It will be at least 5 years before these hit the market though.

The Tesla model S is a preview of what is coming in the mainstream market soon except with longer ranges and lower prices.

Around 50-60% of current oil production goes into petrol and diesel fuel.

For those into long term investments, 5-10 years, short oil and long lithium would be a wise move.

Lithium is the new oil.

RaggyDays · 04-08-2013 09:27AM

And where does 95% of the electricity produced in the world come from???
Oil Gas and Coal

stevedublin · 04-08-2013 09:30AM

RaggyDays wrote: »

And where does 95% of the electricity produced in the world come from???
Oil Gas and Coal

In reverse order - most electricity is produced from coal, very little from oil (except in Saudi Arabia maybe).

BloodBath · 05-08-2013 04:54AM

RaggyDays wrote: »

And where does 95% of the electricity produced in the world come from???
Oil Gas and Coal

5.5% came from oil in 2008.

RaggyDays · 05-08-2013 06:33AM

https://www.youtube.com/watch?v=lpB1yR9Sz9Y

Cheap Oil... Bring it on

relaxed · 27-08-2013 03:16PM

relaxed wrote: »

Crude Oil (WTI) USD/bbl. 101.12

EUR/USD 1.292.

In euro terms its starting to shoot up again, seems to have gone unnoticed in the media.

Even in USD terms it has not been over $100 in a while.

Oil up about 7% to over $108, euro up about 4% against the dollar

Seems to be inching up all the time in real terms the past while.

euroboom13 · 15-09-2014 07:26AM

Oil falling again ,gold also...
Stocks up and everyone watching currencies

Times are a changing!

euroboom13 · 15-09-2014 07:57AM

oil=$96.5
Gold=$1234
Euro/$=1.294

Been awhile since these oil prices! and the $ is the same strength as last year!

euroboom13 · 06-10-2014 10:53AM

oil=$92
gold=$1194
euro=$1.25

Following each other closely now.
Nice if it dropped 20% at pumps.(oil)

Thargor · 06-10-2014 11:38AM

Do you have a target price for oil/gold or are you just watching?

lucky john · 06-10-2014 03:46PM

euroboom13 wrote: »

oil=$92
gold=$1194
euro=$1.25

Following each other closely now.
Nice if it dropped 20% at pumps.(oil)

I think its fair to assume the euro is heading to $1.20 or possibly lower. The question then becomes what, if anything ,the US will do about it. Very soon the big multi national US companies will start Q3 reporting. The impact of exchange rate changes will come into focus then. It's actually hard to see what's going to put a stop to the euro falling. deflation is a very real possibility for Europe and we are way behind the curve in reacting to that. The opposite is the case in the states. With the jobs data last friday been so good they are not far of rising rates at the same time as Europe starts bond buying. You could have the real possibility of oil falling but petrol at our pumps rising.

euroboom13 · 06-10-2014 08:31PM

Not interest in any as investments at the moment!

Gold has been alot lower (and higher)in the past twelve years so I wouldn't consider it unless it went to $1000 ,but even then I am a reluctant gold bug.I never buy at halfway between peek and boom, which is where I see it now.

Oil is too political for me. Needs to be expensive to preserve it but has the habit of falling to bankrupt areas and consolidate.

I am of the opinion that the dollar needs to be at 2euro/$1 but when and how it gets there is a mystery. I think the reason European government debt is selling so well, is American`s hedging this. Time will tell.

Very interested spectator.

euroboom13 · 10-10-2014 07:32AM

$88 The world changing before our eyes.

Enjoy the show

lucky john · 10-10-2014 12:43PM

euroboom13 wrote: »

$88 The world changing before our eyes.

Enjoy the show

Oil is a big driver of European ( and world) inflation/deflation so the knock on effect there will be worth watching. Oil demand is also a forward indicator of economic growth. Not looking so rosie on that front either.

cheap oil coming!

Comments