Enough of the nonsense being posted here!!Vehicles increasing fuel economy every year......New shale discoverys in Russia are not even being given theyre due! Sure Mexico and a few other smal lcountries are reducing production...BUT.....USA increasing production ,,Russia as well..... Canada They will supply enough for the decline in the smaller producing nations. Oil consultants,,,,bankers....pumpers are lying!!!! Oil demand CONTINUES!! to go down in the USA!!! China is increasing production,,,,,,,Electric cars nat gas cars,,,,,,, reducing demand!!! If any of you want the truth about oil supply and demand i suggesst you google Arthur Berman.....He is a Independent oil analyst who has a great track record in the energy space GL
So what if oil goes lower? Oil goes lower, gas goes lower, heating oil goes lower. It'e the crack spread that matters. If they make x dollars a barrel with 100 dollar oil and they make x dollars a barrel with 80 dollar oil they make x dollars a barrel. I don't get your point. What are you saying that is relevant to earnings and distributions? TIA.
Much of this is plain incorrect. The poster is just making stuff up, so there is not much point debating specific points and anyway this is not a topic for the NTI board.
The simple fact is that global oil production increased just about continuously for almost a century till it stopped growing in 2005 and has been flat since then. All the alleged points by the poster above become irrelevant in the light of this. Global oil production has not increased in the last 8 years yet demand has grown every year.
There is a misunderstanding of the politics of oil pricing. So far within the OPEC consortium the Saudis have been a moderate influence. The Saudis rather bleed the goose than kill it quickly. The Saudis and the moderate do not have a large population to feed with oil money. Iran Nigeria and Indonesia reflect the opposite, large population 4 or 5 times that of Saudi Arabia. By enlarge none of the OPEC members have an economy that produces consumer goods for sale. OPEC is heavily dependent on the profits of oil to support their population.
OPEC total oil production represents the force that is able to control the price. The price derives by controlling the demand. No other entity is able to feed the demand, and pressure the price downward. The only way the price of oil will go down is if, for example, the US production matches the Saudis and the US producers flood the oil market. The cost of production, in the US, makes it unlikely that the US producer will be able to set the price of oil any time soon.
The only way the price of oil can be managed downward is by having an alternative to oil, but an alternative cheaper. Presently this alternative is in no way “Green Energy” it is the natural gas.
The natural gas market in the US is changing. The north east is more and more accessing NG from the Marcellus PA play. The Texas NG has found an alternative client in Mexico. The Mexican power generation is more and more from NG. The Mexican economy is booming as well. In time the US trucking will be powered with LNG. Should the trucking go LNG the totality of the Brent import will disappear? OPEC will be depending heavily on China and India. China is already moving in the NG direction.
To conclude, the only way the price of crude, in the short term, will go downward is if we use NG and all it’s derivatives: NG, CNG, LPG, Butane etc.
The price of oil fell back to below $105 a barrel Thursday, ending a surge that had pushed the price to a 16-month high, after a report from the International Energy Agency said oil supplies would exceed the expected rise in demand next year.
I am on the side that we will never run out of oil, it is just that oil prices will able a competition to become competitive. The first to compete with oil will be NG and its liquid forms. Later, much later, hydrogen will compete.
Over time the oil market will change and will probably go to the fertilizer and the chemical side of the market. Transportation will go NG. Even the electric powered car will get its electricity from NG. Why the oil will increase in price has to do with it production and the need for the Middle-East nations with a large increase in population to make more profit with less production. The only things these nations produce are babies who need money. The powers in place will provide or go by the way side.