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Canadian Oil Sands Limited Message Board

  • manylumen manylumen Dec 22, 2011 4:07 PM Flag

    Price of oil longer term

    cos is most tied to price of oil of any oil company i can think of. But there are signs high and higher oil prices are to come, that is if in the short term the economy doesnt tank.
    first look at the capital big oil is spending on expensive non-conventional oil, deep water oil, and expensive gtl technology. I see just this week imo has approved something like an 8 billion oil sands expansion. So big oil is factoring in higher priced oil and they should have the experts to know. Have a listen of the dec21 bloomber interview of Barclay's economist Alia Moubayed who says Saudi need $91 oil to make a profit. This break even to profit point varies between oil companies and countries but Saudi is a good bench mark. all these signal higher oil prices. Now if the economy does tank all bets are off, but would be a great buy opportunity if that does happen. happy holidays.

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    • "Have a listen of the dec21 bloomber interview of Barclay's economist Alia Moubayed who says Saudi need $91 oil to make a profit."

      -No, no, no, no, no.
      Saudi can make a profit at $10/bbl as their production costs are miniscule. What the analyst must have said is that Saudi needs oil at $91 in order to have the cash flow to fund all of their spending including social programs. There is a big difference between profit point and desired revenue.

      My only concern regarding Canadian Oil Sands production is the likely impact of increased U.S. production from the Bakken formation in Montana / North Dakota, the potential reserves there are massive. In Bakken there are 400B of oil, the U.S. geologic survey estimated that only 4B was recoverable but the oil industry expects at least 20B of recoverable oil and they are investing on that premise.

      • 2 Replies to easy_was_mail
      • Having said all that, the Saudi are likely the worlds lowest cost producer of any significan amount of oil. I do think the price to get oil out of the ground in general is going way up, especially in new oil in deep ocean or oil sands extraction. The world probably does need $100 to continue to explore and attempt to replace diminishing production.

      • I think you are right easy.... thanks for making this clear. I dont know if $10 is the Saudi cost but even if its $20 these days they dont need $91 oil tomake a profit. Yeah i think she must have included social program costs as cost to make a profit. Worst case Saudi wont stop pumping oil even at $60 a barrel if it goes there, they might just have to back track on promised funding of social programs.

 
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