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02-23-2016, 02:33 PM
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Banned
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Join Date: Jan 2016
Posts: 4,134
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OPEC and the Arabs might have the upper hand indeed but that is all they have, nothing more and nothing less. When it turns around to new and greener technology and oil is far less depended upon the Arabs won't have anything but a bucket of sand to spatune in. I see it as stepping on the toes of those you maybe kissing the behind of at a later date. Time will tell
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02-23-2016, 02:39 PM
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Banned
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Join Date: Jan 2010
Location: Kimberley B.C.
Posts: 5,234
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Quote:
Originally Posted by ^v^Tinda wolf^v^
OPEC and the Arabs might have the upper hand indeed but that is all they have, nothing more and nothing less. When it turns around to new and greener technology and oil is far less depended upon the Arabs won't have anything but a bucket of sand to spatune in. I see it as stepping on the toes of those you maybe kissing the behind of at a later date. Time will tell
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Yeah but its gonna be way past our time. And our childrens."New and Greener Tech" ain`t going to be viable until it`s freeze and starve time.
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02-23-2016, 02:46 PM
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Banned
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Join Date: Jan 2016
Posts: 4,134
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Somethings got to give, just trying to make my self feel better...
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02-23-2016, 02:46 PM
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Join Date: Nov 2008
Posts: 11,374
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Not good for Canada.
__________________
“One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.”
Thomas Sowell
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02-23-2016, 03:07 PM
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Join Date: May 2015
Posts: 1,414
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Since the beginning of this downturn "the experts" have forecast it to be 3-5 year event. This recent statement only solidifies that forecast. That being the case, we have only just started to feel the effects as we are only 6-8 months in to low prices, and the next 24 to 48 months don't bode well for our Alberta economy. As the minister stated, " The problem is the short term is here to stay." and the execs from Cenovous, Conoco-Philips etc seem to agree... Not good at all, it's not going to get better tomorrow or next week or even next year it seems.
Quote:
Originally Posted by Headdamage
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02-23-2016, 03:27 PM
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Join Date: Aug 2012
Posts: 2,169
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I dont get why people always hope saudi will cut production, they keep on saying it is the high cost guys that need to take their turn.
The idea of oilsands is insane if you think about it.... if a company doesnt have a refinery complex for the stuff they are pumping the most expensive 'oil'/tar on the planet which is some of the lowest grade oil out there and diluting it with perfectly good light oil to sell for the cheapest price.
There are companies that were rail car loading bitumin and/or trucking it at one point, they are bankrupt now but the insanity did happen.
I feel for the people losing their jobs but some of the stuff companies were doing is mind boggling.
Look at suncor.... they are still building fort hills, a project that needed something like 85-125$ per barrel to turn a return. Mind you it will pay in the long run but the oil glut problem doesnt get helped by everyone trying to produce more oil.
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02-23-2016, 03:46 PM
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Join Date: Jul 2009
Location: Almaty
Posts: 2,032
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never mind
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02-23-2016, 03:54 PM
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Join Date: Oct 2009
Location: Okotoks
Posts: 1,069
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Reality is Canada is a price taker in the oil world, which means in a downturn you can't cut production in hopes of raising the price so your only option is to run hard and get your cost per barrel lower by spreading your fixed costs out over as many barrels as possible, all while hammering your variable costs and few actual costs you have control over (this is key to understanding why some companies seem obsessed over "little costs" like travel, company trucks and coffee, in some budgets thats all you have besides wages....it's hard to justify laying folks off when you're still driving around in company trucks, providing free meals and sending folks off to "conferences" in warm climates in the middle of winter).
The Saudi's plan is to bankrupt the high cost producers, then let the price float up to just below the point where those industries would consider jumping back into the game. That puts them in the sweet spot of controlling most of the market, keeping their competition out of the game, giving them political clout with the US since they can always threaten to turn off the taps if Obama get's too friendly with Iran) and keeping oil from going so high that everyone jumps back in or alternatives become economically competative......it's so ingenious and devious it sounds more like a Hollywood plot than reality.
Last edited by justsomeguy; 02-23-2016 at 04:10 PM.
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02-23-2016, 04:04 PM
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Join Date: May 2007
Location: Calgary
Posts: 2,008
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maybe trump is our hope. Bomb Iraqi fields, reinstate sanctions against Iran, buddy up with Putin to handicap the Saudis. Russia and US split control. Bring back jobs to the US and build the mightiest military. Surely they'll be short of labour, and with the southern border walled out, we can be the new Mexicans.
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02-23-2016, 04:05 PM
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Banned
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Join Date: Jan 2008
Location: Central Alberta
Posts: 7,861
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Oil is a commodity, and the Saudi's have us by the short and curlies.
We don't have many choices. Obama killed Keystone, and Quebec wants to kill the eastern pipeline. With Trudeau in office, they probably will get their way.
Transition as fast as possible to other energy sources will kill the Saudi's quicker than competing directly. Yes, high school dropouts won't be making $100K a year here, but them needing to get a trade/degree is not a bad thing and helps our society in the long run. Lots of jobs in the alternative energy fields, ones that pay well, albeit perhaps not to the excesses that the patch did. An educated workforce is always better than otherwise... look at Germany if you want to see results. Some of the finest tradesmen and craftsmen in the world, along with some of the best engineers.
Only China and the US export more than Germany, and Germany has only a fraction of the population of either.
http://www.statista.com/statistics/2...ies-worldwide/
We also need to see what value added products we can produce right here in Alberta, including those from oil/gas/bitumen.
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02-23-2016, 04:11 PM
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Join Date: Oct 2009
Location: Okotoks
Posts: 1,069
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Quote:
Originally Posted by winged1
maybe trump is our hope. Bomb Iraqi fields, reinstate sanctions against Iran, buddy up with Putin to handicap the Saudis. Russia and US split control. Bring back jobs to the US and build the mightiest military. Surely they'll be short of labour, and with the southern border walled out, we can be the new Mexicans.
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Except that Trump has said he'll approve XL, as long as we give him 25% of the revenue from it forever!!
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02-23-2016, 04:16 PM
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Join Date: May 2007
Location: Calgary
Posts: 2,008
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Quote:
Originally Posted by justsomeguy
Except that Trump has said he'll approve XL, as long as we give him 25% of the revenue from it forever!!
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and they'll build the pipeline, but we'll pay for it.
Seriously, if we want to diversify our economy we should build munitions plants. We'll either climb back on top of the hog, or go out with a bang. Alberta Armaments could manufacture a couple of basic models of personal arms, the left winger, the right winger, and the justifier. Throw in an anniversary model, the denier, and we'll have it covered.
Last edited by winged1; 02-23-2016 at 04:21 PM.
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02-23-2016, 04:36 PM
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Join Date: Jul 2009
Location: Almaty
Posts: 2,032
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Quote:
Originally Posted by avb3
Oil is a commodity, and the Saudi's have us by the short and curlies.
We don't have many choices. Obama killed Keystone, and Quebec wants to kill the eastern pipeline. With Trudeau in office, they probably will get their way.
Transition as fast as possible to other energy sources will kill the Saudi's quicker than competing directly. Yes, high school dropouts won't be making $100K a year here, but them needing to get a trade/degree is not a bad thing and helps our society in the long run. Lots of jobs in the alternative energy fields, ones that pay well, albeit perhaps not to the excesses that the patch did. An educated workforce is always better than otherwise... look at Germany if you want to see results. Some of the finest tradesmen and craftsmen in the world, along with some of the best engineers.
Only China and the US export more than Germany, and Germany has only a fraction of the population of either.
http://www.statista.com/statistics/2...ies-worldwide/
We also need to see what value added products we can produce right here in Alberta, including those from oil/gas/bitumen. |
There is something weird with this logic - when oil price was high, I've heard that it made sense to develop "other" sources of energy, now, when it's low, you say the same thing  .
Reminds me how both colder and warmer weather gets blamed on a man made global warming.
Anyhow, it will never make sense until it's competitive, OR special interest groups will make us subsidize it
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02-23-2016, 04:38 PM
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Join Date: Jul 2009
Location: Calgary
Posts: 697
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I think the logic is that if we can't make money due to our expensive oil we better find another way to make money.
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02-23-2016, 04:40 PM
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Join Date: Jul 2009
Location: Almaty
Posts: 2,032
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Quote:
Originally Posted by Headdamage
I think the logic is that if we can't make money due to our expensive oil we better find another way to make money.
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I agree, but I wouldn't bet on making money producing more expensive energy though.
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02-23-2016, 04:44 PM
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Join Date: Apr 2012
Location: Edmonton
Posts: 8,338
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Quote:
Originally Posted by justsomeguy
Reality is Canada is a price taker in the oil world, which means in a downturn you can't cut production in hopes of raising the price so your only option is to run hard and get your cost per barrel lower by spreading your fixed costs out over as many barrels as possible, all while hammering your variable costs and few actual costs you have control over (this is key to understanding why some companies seem obsessed over "little costs" like travel, company trucks and coffee, in some budgets thats all you have besides wages....it's hard to justify laying folks off when you're still driving around in company trucks, providing free meals and sending folks off to "conferences" in warm climates in the middle of winter).
The Saudi's plan is to bankrupt the high cost producers, then let the price float up to just below the point where those industries would consider jumping back into the game. That puts them in the sweet spot of controlling most of the market, keeping their competition out of the game, giving them political clout with the US since they can always threaten to turn off the taps if Obama get's too friendly with Iran) and keeping oil from going so high that everyone jumps back in or alternatives become economically competative......it's so ingenious and devious it sounds more like a Hollywood plot than reality.
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You've nailed this.
I also wondered where is the oil we have in the ground going to go? Over the boom period the Oil companies drove there costs up, by demanding more from their workers, which resulted in higher costs, more from their communities, which resulted in higher costs, more from their service providers, which resulted in higher costs, and on and on. All to extract the oil from the ground at a higher price per barrel created by themselves. Doesn't make sense.
It's almost as if big oil is cannibalistic in their business philosophy. Why not go at a slower pace and for a longer term.
This reminds me of the two bull story and the cows on top of the hill!
BW
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02-23-2016, 04:50 PM
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Join Date: Jul 2009
Location: Calgary
Posts: 697
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Big companies and profits for stock holders are all about the short term. Making last is not something they are interested in.
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02-23-2016, 05:47 PM
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Join Date: Jan 2009
Location: Airdrie
Posts: 2,377
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They're talking tough but realistically how long can they keep prices down? They need something like $75 a barrel oil to balance a budget, they are only going to dip into their reserves for so long and I don't see the sheiks living more simply. My guess is they're trying to bury companies quickly as hedges for North American producers that are giving them higher than market prices are coming to an end shortly.
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02-23-2016, 06:11 PM
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Join Date: Oct 2014
Posts: 269
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Quote:
Originally Posted by justsomeguy
Reality is Canada is a price taker in the oil world, which means in a downturn you can't cut production in hopes of raising the price so your only option is to run hard and get your cost per barrel lower by spreading your fixed costs out over as many barrels as possible, all while hammering your variable costs and few actual costs you have control over (this is key to understanding why some companies seem obsessed over "little costs" like travel, company trucks and coffee, in some budgets thats all you have besides wages....it's hard to justify laying folks off when you're still driving around in company trucks, providing free meals and sending folks off to "conferences" in warm climates in the middle of winter).
The Saudi's plan is to bankrupt the high cost producers, then let the price float up to just below the point where those industries would consider jumping back into the game. That puts them in the sweet spot of controlling most of the market, keeping their competition out of the game, giving them political clout with the US since they can always threaten to turn off the taps if Obama get's too friendly with Iran) and keeping oil from going so high that everyone jumps back in or alternatives become economically competative......it's so ingenious and devious it sounds more like a Hollywood plot than reality.
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This is the most rational, and logical analysis I have seen of the oil situation to date.
My two cents:I think a war will be started involving a big oil producer. Likely involving Saudi Arabia. They are not the puppets they used to be, and I don't think that sits well with people
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02-23-2016, 06:23 PM
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Join Date: May 2015
Posts: 1,414
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Quote:
Originally Posted by slough shark
They're talking tough but realistically how long can they keep prices down? They need something like $75 a barrel oil to balance a budget, they are only going to dip into their reserves for so long and I don't see the sheiks living more simply. My guess is they're trying to bury companies quickly as hedges for North American producers that are giving them higher than market prices are coming to an end shortly.
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Not before the west folds for sure. If for no other reason than to save face. I wouldn't get your hopes up any time soon. I would think too many folks are still dreaming (and hoping) that it's going to end right away. The real oil producers of the world ( the Middle East etc) have just made the facts abundantly clear.
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02-23-2016, 06:32 PM
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Join Date: Nov 2011
Location: southern Ab
Posts: 1,066
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Quote:
Originally Posted by justsomeguy
Reality is Canada is a price taker in the oil world, which means in a downturn you can't cut production in hopes of raising the price so your only option is to run hard and get your cost per barrel lower by spreading your fixed costs out over as many barrels as possible, all while hammering your variable costs and few actual costs you have control over (this is key to understanding why some companies seem obsessed over "little costs" like travel, company trucks and coffee, in some budgets thats all you have besides wages....it's hard to justify laying folks off when you're still driving around in company trucks, providing free meals and sending folks off to "conferences" in warm climates in the middle of winter).
The Saudi's plan is to bankrupt the high cost producers, then let the price float up to just below the point where those industries would consider jumping back into the game. That puts them in the sweet spot of controlling most of the market, keeping their competition out of the game, giving them political clout with the US since they can always threaten to turn off the taps if Obama get's too friendly with Iran) and keeping oil from going so high that everyone jumps back in or alternatives become economically competative......it's so ingenious and devious it sounds more like a Hollywood plot than reality.
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There is likely much truth to this.....
Quote:
Originally Posted by slough shark
They're talking tough but realistically how long can they keep prices down? They need something like $75 a barrel oil to balance a budget, they are only going to dip into their reserves for so long and I don't see the sheiks living more simply. My guess is they're trying to bury companies quickly as hedges for North American producers that are giving them higher than market prices are coming to an end shortly.
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But there is also truth to this.
Something will give, and eventually there will be a middle ground reached. imo.
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02-23-2016, 06:35 PM
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Join Date: Jun 2013
Location: Bazeau County East side
Posts: 4,188
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Time to put a tariff on imported Saudi blood oil.
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02-23-2016, 06:37 PM
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Join Date: Jan 2008
Location: Calgary Perchdance
Posts: 18,896
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Quote:
Originally Posted by Headdamage
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Without a supply cushion when prices go up they will go up fast. Buy stock at the right time and retire early.
__________________
It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself. Charles Darwin
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02-23-2016, 06:48 PM
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Banned
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Join Date: Dec 2007
Location: Edmonton
Posts: 2,485
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I've got 4 aces. Do you believe me?
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02-23-2016, 06:58 PM
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Join Date: Sep 2007
Posts: 2,380
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If the Middle East has no buyers of their oil how can they make money.
If Europe and North America stoped buying Middle Eastern oil and only bought North American oil then the issue is solved.
I highly doubt that the oil sands needs $75 a bbl or in particular the Fort Hills project $85-125 a bbl as eluded to in order to break even or even turn a profit.
$35 a bbl is what it was 10 years ago. With more effeciencys in the industry I am.sure that cost has even come down.
But hey we can throw numbers around all we want. Untill the big guys shut their doors it is anybody guess.
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02-23-2016, 07:06 PM
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Join Date: Oct 2007
Posts: 2,358
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The legacy carry over in the form of high price hedges, the commissioning of big projects started long ago and the return of Iran after a period of artificially suppressed production cuts has been the driver in minimizing declines to this point and has skewed perceptions. Many people have been fooled into thinking oil is easy pickings and will be for a long time. Its just false. There was some massive dollars and massive effort put into jacking production that last 5 years. That is gone.
Most countries are pumping full out and have little room to jack production from here. Most countries are in terminal decline and simply can not jack production by more than a token amount. Many projects that will be required to stem future declines are being shelved all across the globe and this will have an impact. By the time the smoke clears and we realize declines have begun in earnest its going to take some time to turn the ship around and catch up again. Should be interesting.
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02-23-2016, 07:16 PM
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Join Date: Jan 2015
Posts: 497
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No way fort hills will need $80+ oil. Operating costs will be less than $50 per barrel. Suncors oil sands operating costs are $27 right now and getting cheaper. What guys like 79ford forget is that the big companies like suncor and imperial have refineries. Low crude input costs mean higher margins on the refining side.
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02-23-2016, 07:28 PM
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Join Date: Jun 2007
Posts: 1,397
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Quote:
Originally Posted by dmcbride
Time to put a tariff on imported Saudi blood oil.
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Would only work if both Canada and USA were both on board! But I fully agree!
__________________
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02-23-2016, 07:40 PM
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Join Date: Apr 2012
Location: Edmonton
Posts: 8,338
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Quote:
Originally Posted by dmcbride
Time to put a tariff on imported Saudi blood oil.
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Agreed.
Like 75.00 a barrel for Canadian importers. If Truedeau light accomplished this. You'd see a pipeline east built very quickly and his budget would balance in a hurry to boot.
BW
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