Of course everyone is waiting for Venezuela to collapse but that may not take off serious amounts of oil. However, if Russia establishes a land bridge western governments may react by cutting Russia off from SWIFT. That could curtail their ability to sell oil. They could also declare a European Oil embargo(Russia has little imports to the USA). Of course, Russia would respond with a Nat gas embargo, which is why this would not be implemented until spring.
Russia produces 10 million barrels per day. Financial restrictions could easily take 3 off the table. If there was ever a time to do it, it is now, while their is a glut.
The worst cold to hit this Winter is on our door and helped increase Nat Gas prices. This helped off -set the decline in oil prices. Heard Pickens talk about a bottom when storage fills. These guys can't help themselves until forced to do so ( my words not his). So it will be, he states, in the next 6 weeks. I have not seen any effort to reduce production. Until we can see actual production decline by about 500,000 K barrels, things will not get better. Of course, if shorts wait for that actual moment they will be competing for shares as everyone is waiting for that one report !!!!!!
They say that to influence the market. A year from now, all the prognosticators that were wrong will smile and say, " Price predictions are not a perfect science". They will then offer new predictions without skipping a beat. Those new predictions will be taken as the gospel truth even though they were wrong the last time. I see this so many time on CNBC where analyst are wrong, and just give a smile and wink, with no accountability.
Just a rough Math check. If 3720 rigs produce 102% of oil (2% oversupply), then 3410 should produce 93.5 %. Problem is, rigs represent future production, not current output. However, it gives you a sense of where things are going.
The stone age did not end because we ran out of stones and the oil age will not end because we run out of oil. New technologies that are available today will take the place of oil as time marches on. It is already happening. Most new additions to the electric grid are from alternative energy projects , such as wind and solar. We have double our solar in the last few years. If we double 6 times, we no longer need other forms of production. However, that is a tall order, and would need a continued reduction in cost.
Smart bears don't want to turn into dumb pigs !!!!!!
Yeah, we done got deflated !!! This environment already does not allow us a profit, deflation will not help unless these oil workers want to work for min wage !!!!
The Saudi's better start spending about 100 billion of those reserves on military equipment. What are the chances we will fight another war for them since they declared an oil war with the USA.
Excellent point. I didn't think they had hedged more than the first qtr. Probably more by now. You can lose on hedges if the price goes up sharply. Must be careful. The drop in oil prices are good for the airlines but Delta has over a billion in hedge losses.
I agree with one of his points and now I am him...lol. Maybe you should consult your wigi board.