And skinz.... in response to your rant against those horrible conservative Koch Brothers from another thread....
Here's a little fact for you to chew on... the Koch bros are the biggest supporters of PBS scientific programing.... perhaps I should rant about their "liberal" activities.....
You know nothing of the Koch brothers other than the liberal talking points you are fed about them on MSNBC.....
and for your further info... the next biggest PBS supporter worked for Ronald Reagan
facts can have a way of nipping at your rear end.... amazing the way libs take possession of PBS while denying where the real big buck funding comes from
Took just a few short paragraphs to show you to be a hypocrite 2Xs.... please explain to me how someone who owns EPD can be against Keystone because of the small possibility of an occasional leak..... enlighten me and others so we can wrap our heads around your logic.... maybe you can win us over to your side
Call it a rant all you want but your inability to address any of the points speaks volumes...
How many $140K roughnecks will work for minimum in service or retail?.... what affect does losing high paying jobs have on the economy.... Do retail employees buy houses cars furniture etc in a manner that has an effect on the economy... the reality is you need dozens of min wage retail workers to offset just 1 big paycheck energy employee... how many did Schlumberger say they were laying off... 9K? BP 2K in the US alone... HAL?????.... that's not even touching the layoffs we will see in fracking.... and don't even mention the deep sea drillers.... did we mention suppliers... I pointed out the closed factories and the hundreds US Steel was laying off as a result of energy commodity weakness.... how will those factory towns fare?..... I could rant on and on... but you get the idea (and have no answer)
Your the one who was touting the economic boost from the savings at the pump... why did that fail to materialize.... during Christmas season no less... The last time retail dropped like that in Dec was in 08
Can you tell me why so many major gas and electric utilities are raising rates as Natural Gas has lost close to 40%?.... I think there's a contradiction in there somewhere
BTW how do you sleep at night with an investment that's married to big oil... deep sea drilling.... and Fracking.... you are a first rate hypocrite
Consider me ignorant... and you informed..... please address these points....
I wonder if that has anything to do with the Saudi's selling oil in the US at a $4+ discount to Brent
and that Gulf refineries can refine Saudi oil for less cost than domestic lighter oils
This is a disturbing development
I would hope that there is some outrage that the current administration is allowing the Saudi's to undercut a benchmark price... that's not free trade... its a trade war that is going to kill a significant proportion of US production for quite some time... this practice is directed at US producers and they are selling oil below WTI prices.... which drive WTI down further.... and many US producers cant get WTI prices under the best of circumstances...
But WTeF.... people are saving $20 per fill up.... that savings isn't being spent elsewhere in the US economy (Dec drop in retail sales) so we are really just seeing an outflow of dollars to the Mid east again
I heard some analyst today talking about energy jobs vs retail jobs and how retail outnumbered energy by about 13:1.... that the loss of energy jobs really didn't matter
Failed to mention that avg salaries in Energy are 5-6Xs better than retail.... I guess he figures all those $100+K roughnecks can feed their families by folding clothes in the local Kohl's... $22K full time if they will give you the hours.... but they wont because of Obamacare
But POTUS is gonna ask anyone with 2 nickels to rub together to pay for community college to educate a new generation of community organizers
Well that's an extremely short sighted view.... Canadian tar sand oil is refined cheaper and easier than the lighter more volatile fracked oils...... Gulf refineries are set up to refine heavier oils like tar sands oil..
Refined products can be exported under current law so Gulf refineries will do well and have thousands of high paying jobs that would be further secured with a flow of cheap oil that can be refined into exportable product
careful here... we had a card carrying pinko tell us that these layoffs make no difference to the economy... consumer spending will make it up
and we just saw how all that consumer savings in gasoline helped retail sales...
EPD remains a great income earning defensive play.... but that doesn't mean that its not in for further ugliness.... I'll say some blasphemy.... get out of the drip.... put buy orders under the stock with your distribution cash if you are into reinvestment
In a side note.... let me rhetorically ask why PSE&G and National Grid (major utility companies)... have been raising rates since the summer due to fuel costs..... as their primary fuel has cratered (off 40+%).... how is that cratering being passed along to the consumer in one of the most populous regions of the country... my heating gas budget has increased $20 and my elect $15
and why haven't these analysts that talk of the "tax credit" low energy brings mentioned that utilities have been raising rates.... eating up almost all pump savings?
also Con Ed wants 2015 rate hike on both the fuel and delivery portion of their billing... it just doesn't add up to the reality or the talking head rhetoric
Saudi's are ruining the American Fracking industry... and not only will jobs be lost.... companies will fold.... US production will drop.... we will be sending dollars to the mid east yet again.... and prices will rise
while the imaginary benefit to the economy never takes hold
be wary when the trees block your view of the forest.... and the nasty wolves and bears that live there
The fact is the people who need that money most are deep in debt and arrears.... thousand to the electric company... another grand for heat... credit debt dripping out the wazzo.... people would rather shut the bill collector up with that extra $32
So retail has actually dropped!!!!.... and JP Morgan had a crumby Q..... now roll that into the negative affects of plunging energy and wide scale layoffs to come...... I was arguing with some who said that the S&P was going to see 6% EPS growth the other day in spite of the downtrend in energy EPS... I told them to watch the financial institutions... they would tell all.... JPM sees -6% EPS
Thank goodness for cheap energy and the "tax cut" it gives regular folk
World on the brink of a recession bigger than 09.... and its commodities that's the tell....
While the FED has an empty gun... other than new rounds of QE... aint that good news
on another note.... who was it who said America cant drill its way to lower gas prices...... but then takes credit for it when it comes to fruition...
which is the same as the increase for over 2 full years now split adj... and once again I will point out that means the growth rate continues to contract
It has been hinted that EPD would defend the unit price with a bump or a one time special distribution.... with the units approx. 20% off their highs this would be the proper time to defend the unit price
However the energy space environment prohibits a special at this time... which is why they should have been a little more generous when times were bright
I think we are going to be in for some difficult #s moving forward as NGLs have been taking a beating price wise and that is where there is some exposure
2015 is not going to be the best of years and I doubt we see new highs... or anywhere near there this year
when I just googled the text of the message the only hits came up from the LINE and XOM bds so it may just be someone post and not a news blurb
It appears to be a cut and paste from somewhere.... it paints a bleak picture as to what may be ahead... also has a nice little tell about the cost savings of pipe over rail.... but massive drops in production will eventually have a cash flow and EPS impact on midstream pipes
Bakken Crude Prices on Monday $24.33-$33.44 Per Barrel
Tuesday, December 30, was the last time that the posted price of West Texas Intermediate (WTI) crude oil topped $50 a barrel. That price indicated how much Plains Marketing, a division of Plains All American Pipeline L.P. (NYSE: PAA), was willing to pay for a barrel of WTI crude. On Monday, January 5, Plains said it would pay $46.25 per barrel for WTI. Indeed, $40 oil is already here.
Crude prices on the NYMEX fell below $50 a barrel briefly on Monday, but managed to close the trading day at $50.04. Tuesday morning the price fell to $48.47 in early electronic trading.
The really bad news is the price that Plains Marketing is offering to pay for crude oil produced in the Bakken shale play. Williston Basin Sweet (equivalent to WTI) fetched just $33.44 a barrel on Monday; Williston Basin Sour fetched just $24.33. No other grade of crude on the Plains price bulletin was priced lower than Williston Sour.
In our earlier look at the top producers in the Bakken, we noted the added transportation costs of $19 a barrel for Bakken crude headed by rail to the east coast and $11 a barrel for crude headed to the Gulf coast by pipeline. Adding the transportation cost to east coast refineries to the posted price of $33.44 gives a price per barrel at the refinery of $52.44. Because east coast crude is benchmarked to Brent, not WTI, the price paid was 1.2% below Monday’s closing price of $53.11 per barrel of Brent.
Cheap Oil Costs 756 U.S. Steel Workers Their Jobs
U.S. Steel (NYSE:X) will idle two plants that serve the oil-and-gas industry and lay off 756 workers due to falling crude prices, an indication that companies outside the energy sector are also feeling the pain.
The layoffs and temporary suspension of plant operations begin in March, affecting 614 employees in Lorain, Ohio, and 142 in Houston. U.S. Steel disclosed the layoffs on Monday, the Pittsburgh Business Times reported.
Both plants produce tubular steel, which is used in drilling wells.
A small event but it will trickle down and put others out of work also
Energy will see big paycheck layoffs that will be in the 10s of thousands
Which will create thousands of events like the one outlined above.... and like I said that will trickle down to all sorts of service jobs
Good thing everyone is saving $35 a month at the pump
This doesn't even begin to address the impact of lower commodity prices and eventually lower production on revenue and EPS of companies across the board
Not to be political but the administration has to use whatever influence it has to stabilize energy prices before it triggers a DEEP recession.
EPD remains my largest holding but that doesn't mean I cant be honest about what goes on... and IF whats going on ticks me off I'll say so.... Im a partner with a very limited voice... but I will say what I think
Mgmt gets paid rather well here and eF ups like those that are being discussed need to be addressed before they cost us partners another Billion $.... additionally IF they spent our money in an act of petty vengeance as has been implied we need new leadership
are you concerned when they squander a Billion?
BTW... no one seems to offer a different version of events or is saying they didn't squander that Billion
Your scenario should be reason for concern... not only did ETP sue EPD they won.... and IF my memory is correct it was a $1 Billion judgment... so that would indicate that EPD mgmt. started the problem by screwing up and costing quite a bit of partners money
You now imply in an act of petty vengeance they use more partners money to float an unrealistic proposal just to tweak ETP.... well let me tell you... that was some tweak and they must be rolling on the floor laughing as their cash machine counts EPDs money
These acts would indicate incompetence that is not worthy of a kick in the rear on the way out the door... they need to be kicked in the nuts ... and then in the teeth when they bend over in pain
How about a statement of accountability and a head on a plate out of EPD if your scenario is remotely accurate
That $1Billion they will fork over to ETP equates to a 1X special to partners of $.50/unit.... and I don't know about you but that's a nice 5 figure amount for me.... of course... nothing I should get my nuts all twisted over now is it... their screw up cost me about $12K if that Billion $ had been paid to partners instead of ETP
IF that were to be true than mgmt. just used partners money at a shot in the dark hoping to get lucky... good mgmt does not waste money to antagonize a competitor... IF they did that team should have a boot print on their rear end
The landscape has changed... MLPs are in for some tough sledding
The euphoria of the lower energy prices will result in consumer splurging just as the FED was about to change policy to tightening... It will guarantee they move in the first Q.... and that will affect the sector negatively... as the tide recedes the sector and EPD will take their medicine... and it will not be pretty when you are already 20% off your high
This is not time for feel goodcrap.... its time for reality
and for the Bakken region no less... a region that does not have pipeline access... a region that relies on costly rail
That means that producers are not willing to commit to volumes and see their own production dropping
This is all in line with the discussion of small producers not being able to meet commitments... small producers going under... and pipeline finding themselves in a position where they may be forced to renegotiate rates or see their customers go belly up
This is not good for the US economy... I don't care how many people have an extra $12 a week to spend in Wallmart
The drop in production... revenue... and layoffs in the energy sector will have massive ramifications....
I was poo-pooed on this very board back in Sept when I mentioned the oil glut... this is going to get a lot uglier before it stabilizes
The company has stated in the past that they were saving dry powder for events like this to defend the unit price via an increase in the distribution growth rate.
Personally.... I didn't believe it then because now is the time it makes the least sense to accelerate the growth rate... now is the time to have the strongest balance sheet possible
Could go sub $30 with the energy equity "crisis"... I suggest now is the time to place limit buy orders well below the ask and take shares on the cheap when an entity is forced to liquidate because of margin calls issued because of other securties
I can get on EPD all day long but not about a falling distribution coverage rate... the rate in 2012 included massive one time gains so its ridiculous to use the coverage # without subtracting out the gains.... I believe 2013 had one time gains also
The reality is that the coverage has been very consistent
While cheap oil is a tax cut it is at the expense of one of the largest sectors of the American economy... it 's not big oil being hurt XOM and friends are doing fine... its the small independent producers that are being killed and may go under
Todays market selloff is linked to cheap oil... numerous articles today talking of the thousands of high paying energy jobs that will be lost to layoffs... they did not even touch on how those layoffs result in so many other layoffs
Every fracked well that is not drilled or is delayed comes at a very high cost to the wells local economy.... hunderds of thousands of dollars not spent by rig hands their families or the energy company itself on incidentals
There has never been a dramatic drop in energy prices that was not followed by s a significant recession and from the previous discussion it would appear that the current administrations foreign policy is to blame. Global geopolitics should never be placed ahead of the nations economy unless there is a DIRECT THREAT to the SECURITY of the US public
There is also the question of dividend cuts (not epd) and how removing that income from those that rely on it will affect the economy... I guarantee you that those that had $3K yr flowing in from SDRL are at a significant net loss after the positives of lower gasoline prices are factored in to their personal financial situation.... as for MLP owners... anyone really think that LINE is not being sold off ahead of an assumed distribution cut... how are those folks making out... they have seen a 50% reduction in equity and may see a large cut if not an elimination to their distribution
All because the administration wanted a different government in the Ukraine and engineered a "peaceful" overthrow of the legally ELECTED government
and why did you have to bring up the color of Obama's skin... rather racist remark from a left leaner that appears to be heavily invested in an area that relies on fracked fossil fuels, what a hypocrite
This statement of yours "The President does not make laws - Congress does"...would appear to be 100% in agreement with mine "Congress and the administration need to act on oil export"
I could go on to point out that while you say this site is not for political commentary you dive right into some serious political reasons for the decline in oil...
You agree that some frackers will go belly up... and its my opinion that the traders are hell bent on seeing to it... frackers going under will affect mid stream pipelines
The interests of American Energy should be more important than anything Russia is doing short of nuclear war... we need to stay out of their business... and I'll argue that the "west" played a key roll in the illegal upheaval in the Ukraine that started all of this... so we stirred the pot... caused yet another "coup".... and then want to punish Russia (for attempting to protect their interests) and while doing so punish American Energy companies.... I think that policy SUX.... the middling of the USA once again in other nations affairs... I thought this President said we would no longer do that
POLITICS should be front and center in any discussion as to what is affecting the net worth of anyone owning American energy companies....
Just wait to watch what the Investment Banks and the traders do to the MLPs when they raise rates next year.... if this current situation hasn't calmed there will be a bloodbath in this sector similar to 09