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Pengrowth Energy Corporation Message Board

  • salvatore_newyork salvatore_newyork Nov 13, 2013 12:31 PM Flag

    Iranian Oil Outlook: Due For A Crude Oil Crash

    Do you think this will play out, or affect PGH?
    PS: Look up article in the subject line

    "Currently, Iran is sitting on 150 billion barrels in oil reserves, which represents 10% of global proven crude oil reserves."
    "I estimate that Iran may have more than 2.19 billion barrels of oil stocked up to flood the market once the oil embargo ends. The 10% drop in crude oil price that was estimated by the U.S. government may not have an exaggeration after all."

    Sentiment: Hold

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    • A couple of things jump out, One, I don't think Iran has the infrastructure to store that amount of oil, they more than likely shut in production. Two, even if they could, they will not dump a huge amount of their oil on the market, knowing full well if they did they would drive prices down, and of course get less for what they have, not in their interests to do that..

      For various reasons I'm sure like most oil producers one hundred bucks a barrel is what they like. However, we also know the market will over react when Iran begins to sell their oil. This could present an excellent buying opportunity for long term holders and short term traders.

      PGH has a great long term plan, problem is like most CAD producers, with some few exceptions (SU for one) transporting it to a market is longer, more expensive and somewhat constricted. Much is being done to alleviate this problem, question is can they stay ahead of the ever increasing Alberta production.

      Falling oil prices is bad for all producers, impact will be less for PGH because of their low cost long term production and hedging program, but I doubt he market will make that distinction, and it will sell off as all other producers will..

 
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