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Sonde Resources Corp NEW Message Board

drpearso 1 post  |  Last Activity: Dec 11, 2014 3:50 PM Member since: Dec 9, 1997
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    XOM will drop below $70.00

    by dhcabinetry Dec 10, 2014 12:19 PM
    drpearso drpearso Dec 11, 2014 3:50 PM Flag

    The difference between now and 2008-09 --- the over-all market is not dropping. Low crude prices should/are suppose to prop up the market since folks have extra money to spend now with low crude prices. Exxon usually sorta follows the market, but with lower crude prices Exxon may lack behind the market. Until Exxon acquires distressed shale oil holdings and then they will be up due to increased reserves. Best way to increase reserves is to buy them. They could buy WLL and have 800 million bbls in the Bakken which is safe in terms of not being overseas. The Saudi idea of letting prices drop will come back to see them since OPEC is a cartel yet they are not working as a cartel. I would not want to be located in that part of the world where your cartel neighbors do not like you due to their economies and social programs running into the ground.

    The world price of crude needs to be around $80-$90/bbl to maintain order. And to insure that there are ample long term projects lined up in order to prevent demand from outstripping supply. It will not happen now, but it will eventually happen since low priced crude doesnt force energy users to be conservative with energy use. Low priced crude makes folks think we can all drive big gas guzzlers and not be concerned about being conservative. At some point when the 35% growth in energy demand is needed (by 2040 according to Exxons long range outlook --- this is consistant with many other studies also). When the long range projects are not funded due to capex cut backs, then there will be world disruption. The US will have natural gas to get by with, but the crude oil producers in the Middle East will become a totally unstable region, and Saudi will end up being the target of much resentment.
    Crude prices around $80-90/bbl are needed for the future, not for the old remaining conventional oil that is being drained away at 6% decline each year. These higher than market demand prices for crude are needed for stability in the market

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