Anybody here works in Oil and Gas?

[Sidilicious]

I need some general info on predictions on the Oil price in the coming months.

Whatever I have read indicates that the price of oil will remain the same, or go down a bit lower due to the following factors
1. OPEC not reducing the amount they produce in order to gain market share
2. Cost of producing shale gas via tracking is reducing (their marginal cost is about $35-40 now). If you have more info on this, please share with me.
3. Iran having its sanctions removed can produce more and lead to the oil glut. Its estimated that Iran can produce 1 million barrels (a day/a year??? Can some one please clarify?)

If you have any other opinion, or info, I would really appreciate if you could share it with me

 

[Strike Rate]

Read this whole article it will really help you http://www.reuters.com/article/2015/07/15/us-markets-oil-idUSKCN0PP03420150715

excerpt (iran part)

Analysts at Goldman Sachs estimate Iran could supply an extra 200,000-400,000 barrels per day (bpd) of crude in 2016 on top of a release of 20-40 million barrels from floating storage.

Iran's oil production could increase by 500,000-600,000 bpd and could reach its pre-sanctions level of 4 million bpd within six to 12 months if there is enough demand, Roknoldin Javadi, National Iranian Oil Company (NIOC) managing director told Iran's Shargh newspaper.

Most analysts agree that first Iranian oil exports could enter the global market in early 2016, but estimated additional volumes vary between 300,000 and 700,000 bpd.

 

[Strike Rate]

So according to this report Iran can reach 4 million bpd in 12 months (if sanctions removed and there is demand) that means 40% of what Saudis and Russian produce daily (around 9.5 to 10 million bpd).

 

[Sidilicious]

So according to this report Iran can reach 4 million bpd in 12 months (if sanctions removed and there is demand) that means 40% of what Saudis and Russian produce daily (around 9.5 to 10 million bpd).

Thanks a lot mate. Gives me some idea to work with.

Really find this whole industry very interesting

 

[nish_mate]

Thanks a lot mate. Gives me some idea to work with.

Really find this whole industry very interesting

FT, Reuters and platts along with Blomberg.

Look at Brent, TWI spot rate vs future will give you an idea of the market thinkz it will be in 6 months/ 12 months.

Last but not the least BP/ Exxon and Chevron have released their reports on the oil market and what their economist make of the market.

 

[nish_mate]

FT Big Read had a very good article 4 weeks ago. Look it up, explained the current oil market.

Also look up Cambridge Intelligence or Energy Outlook and Daniel Yergin. Daniels the author of THE book on oil- THE PRIZE

 

[Saqs]

So according to this report Iran can reach 4 million bpd in 12 months (if sanctions removed and there is demand) that means 40% of what Saudis and Russian produce daily (around 9.5 to 10 million bpd).

That seems awfully optimistic for the first year market penetration no?

 

[Saqs]

I need some general info on predictions on the Oil price in the coming months.

Whatever I have read indicates that the price of oil will remain the same, or go down a bit lower due to the following factors
1. OPEC not reducing the amount they produce in order to gain market share
2. Cost of producing shale gas via tracking is reducing (their marginal cost is about $35-40 now). If you have more info on this, please share with me.
3. Iran having its sanctions removed can produce more and lead to the oil glut. Its estimated that Iran can produce 1 million barrels (a day/a year??? Can some one please clarify?)

If you have any other opinion, or info, I would really appreciate if you could share it with me

Working across the MENA region in corporate finance and advisory - it's quite clear that Saudi stance is they are not going to reduce their production even if the prices continue to decline. They have such a massive surplus that they are more comfortable digging into their reserves than to lose market share.

 

[Strike Rate]

That seems awfully optimistic for the first year market penetration no?

Now the million dollar question is how Russia sees it because Iran is a very dear friend of Russia but there are no real friends or enemies when it comes to business. Russian economy is heavily dependent on gas/oil and heavy supply by Iran means more lower prices that's going to hurt Russia.

 

[Saqs]

Another world war around the corner then. Perfect.

 

[Slog]

I need some general info on predictions on the Oil price in the coming months.

Whatever I have read indicates that the price of oil will remain the same, or go down a bit lower due to the following factors
1. OPEC not reducing the amount they produce in order to gain market share
2. Cost of producing shale gas via tracking is reducing (their marginal cost is about $35-40 now). If you have more info on this, please share with me.
3. Iran having its sanctions removed can produce more and lead to the oil glut. Its estimated that Iran can produce 1 million barrels (a day/a year??? Can some one please clarify?)

If you have any other opinion, or info, I would really appreciate if you could share it with me

1. Mantain market share and drive away shale producers. Till few months ago most shale oil needed a $60 WTI to be profitable with only some fields in Eagle ford and North Dakota being profitable at a lower price. OPEC strategy in a sense worked because the rig count in the US dropped by more than half as producers saw it was just not economic to drill anymore in such fields.

2) Your figures are wrong but yes the costs are coming down everyday and the differential on the spot price has also reduced by a couple of dollars per barrel (which doesnt sound a whole lot but is significant.) But I dont expect the drilling to go up till atleast price hits $70. The cost of drilling is reducing and also the servicing and transport costs will be reduced when a few pipeline projects in the Bakken and the Rockies are finished. The American drillers seem pretty bullish though and have a lot of CAPEX planned for the second half of 2015 and also 2016 so lets see

3) Honestly dont know much about it.

 

[nish_mate]

Now the million dollar question is how Russia sees it because Iran is a very dear friend of Russia but there are no real friends or enemies when it comes to business. Russian economy is heavily dependent on gas/oil and heavy supply by Iran means more lower prices that's going to hurt Russia.

Russia is already dealing and trading with Iranian oil. Russian banks were the only ones who in the sanction era were happy to route payments for Iranian oil. Russia will look to iran to contain the Azeri oil IMO.

 

[Slog]

Apparently Saudis only need a $20 per barrel price to mantain their cashflows

 

[JaDed]

Good thread are you dealing with commodity futures?The price fall before occurred due to Shale production increase in USA.The massive oil production will cause a loss of many jobs as already oil companies are cutting down in exploration(Cairn India) being one.
Plus sanctions being removed from IRAN would cause adverse effects to Indian economy good for some and bad for some but the price is defn going to reduce unless we see another ISIS war or Yemen like situation which can't be predicted.

From Indian point of view IRAN sanction effects:
Positive:
Oil importer or marketers: HPCL,Indian Oil and BPCL
Aban Offshore: Has dealings in IRAN almost 35%

Negative:
ONGC and CAirn India basically companies that are into exploration
Basmatic Rice companies as due to sanctions India was charging them 20% higer (Kohinoor i guess)

 

[Modest]

- Strong, focused, growth oriented leader.
- Low oil prices

= Great times for India.

 

[JaDed]

- Strong, focused, growth oriented leader.
- Low oil prices

= Great times for India.

Not for all, extremely low oil prices could be bad for many.

 

[Modest]

Not for all, extremely low oil prices could be bad for many.

I have heard this. Though my thinking is low oil price would be due to greater production, newer exploration, not due to lack of demand.

There may be some pockets which may suffer:
1. Low oil price => strong currency, pressure on exports.
2.Low oil price => pressure on local oil exploration cos.

Overall I think it is a huge positive for India. In absence of an extreme scenario, the lower the price, the better it is for India.

 

[Saqs]

Apparently Saudis only need a $20 per barrel price to mantain their cashflows

Originally the analysts said 50. Then 42. Then 40. Now it's dropped even lower. Saudis have billions in their reserve that they'll continue digging into without reducing production levels.

 

[Sidilicious]

Working across the MENA region in corporate finance and advisory - it's quite clear that Saudi stance is they are not going to reduce their production even if the prices continue to decline. They have such a massive surplus that they are more comfortable digging into their reserves than to lose market share.

DO you work in M&A?

 

[ahmedzee]

Things not looking good for us in Oil & Gas. Price of Oil goes below $50. It needs to hover above $70 to be profitable to our companies in Canada. Oil & Gas Capital of Canada, Calgary, is all doom and gloom these days. Know so many people who left the city for good.

 

[Sidilicious]

Things not looking good for us in Oil & Gas. Price of Oil goes below $50. It needs to hover above $70 to be profitable to our companies in Canada. Oil & Gas Capital of Canada, Calgary, is all doom and gloom these days. Know so many people who left the city for good.

On the other hand, its working well for the huge Oil importing countries like India (and Pakistan, I guess - are they oil importing?). Only Japan seems to be the oil importing firm that is struggling as it was using high oil prices to boost inflation.

 

[JaDed]

Time to buy oil for India and Pakistan, hopefully can further help in controlling inflation.

Crashed massively!

 

[JaDed]

Exxon Mobil dropped from the Dow after nearly a century

Exxon Mobil, which joined the Dow Jones Industrial Average in 1928, is being removed from the blue-chip stock market index. Its replacement: enterprise software company Salesforce.com.

Also leaving the index are drug company Pfizer and airplane and defense contractor Raytheon Technologies. They are being replaced by biotech Amgen and manufacturing conglomerate Honeywell. S&P Dow Jones Indices, the company that administers the index, announced the changes, which will take place August 31, on Monday. The index provider said the changes were necessary to make up for Apple's impending stock split, which becomes effective the same day.

The Dow Jones is a stock-price-weighed index. Apple's stock split, which will take the company's shares to roughly $120, from $500, would have cut the Dow's exposure to the technology sector. Monday's changes would also help the Dow "add new types of businesses that better reflect the American economy," the index company said

Energy giant Exxon Mobil joined the Dow 92 years ago as Standard Oil of New Jersey, and it's the oldest member of the index. The Dow's last original member, General Electric, was removed in 2018.

Exxon Mobil was the most valuable company in the United States for much of the early 2000s and as recently as 2011, when it hit a market value of just over $400 billion. Apple overtook Exxon in 2012, and much of the technology sector followed.

Earlier this month, Apple's market value topped $2 trillion, making it the first U.S. company to reach that milestone. Meanwhile, Exxon's market value has sunk to $175 billion. The company has been plagued in part by claims that it deliberately concealed the damage that the oil it has long extracted and refined into gasoline was doing to the planet.

Oil plays a much smaller role in the U.S. economy today than it did 50 years ago. While fracking has helped revive and grow the energy sector in the U.S., demand for fossil fuels and has flatlined — and has dropped during the COVID-19 economic slowdown. In the 1980s, energy companies made up as much as a quarter of the Dow. After Exxon's exits on Monday, energy will account for just 2% of the index.

Salesforce.com, Exxon's replacement, sells software that allows large companies to track sales and other information. It has a market value of just under $190 billion, and its CEO Mark Benioff, who also owns Time magazine, is widely seen as one of the nation's most influential executives.



https://www.cbsnews.com/news/dow-jones-exxon-mobil-pfizer-raytheon-replaced-salesforce-amgen-honeywell/


Looks like Tech long with climate change activists have killed Big Oil.
Salesforce is pretty good addition, has deep pockets as well.

 

[JaDed]

Things not looking good for us in Oil & Gas. Price of Oil goes below $50. It needs to hover above $70 to be profitable to our companies in Canada. Oil & Gas Capital of Canada, Calgary, is all doom and gloom these days. Know so many people who left the city for good.

What are Calgary plans? Does it atleast have an alternate plan like Texas(started in 80s got Apple,Tesla now) to lure in tech?

 

[ahmedzee]

What are Calgary plans? Does it atleast have an alternate plan like Texas(started in 80s got Apple,Tesla now) to lure in tech?

I don't see much of tech in texas. Seattle and California are the main hubs. Texas though has access to ports, has a great chemical industry and has a massive population and market which keeps them moving.

As discussed possibly a trillion times by me on this forum, both Oil & Natural Gas are here to stay. The thing about Solar, Wind, Bio Gas is just blown out too much. World energy can't be sustained through low efficiency battery powered cars, solar and Wind. Infact some may argue (including a leftist Micheal Moore) that battery powered cars, solar and bio gas is worse. Most of hte process requires mining for rare earth metals (usually involved detonation) and compressing these metals to form batteries and solar panels under extremely high temperatures (3000C +). Anyways, so with all that being said, IEA still predicts rise in demand for both Oil and specially natural gas. Coal may be a dead industry though as Natural Gas plants have proven to be a lot cleaner and higher in efficiency. Infact, NG powered cars could be a the one to phase out ICE cars.

In regards to Calgary, well overall Alberta now has more renewable plants than anywhere else in Canada. But it does require a lot of federal govt subsidy and other funding (thanks to Green capitalists running the show). However I foresee some of these facilities to shut down int he next 5 years (same thing happened in California and Nevada). Reason being it might still not be feasible without govt grants to run these facilities. As for Gas, Shell has a $40B LNG project going on right now along with pipeline to Kitimat BC for export to Asia. As mentioned before, this is the energy for the future.

Oil industry took a toll on those who deal with WTI. Some companies who deal in brent are still doing well. Cost reduction is the main goal and sale of end products (or refined products) is making them money. Unfortunately rest of Canada didn't help alberta as much when it came to getting this oil with least amount about Carbon emissions behind it in the world to tidewater. TMX pipeline is the only positive thing which is under construction right now. The energy east pipeline was killed thanks to Quebec who cited "environmental" concerns, yet are willing to dump raw sewage in St. Lawrence river and buy Saudi Oil (that has more CO2 behind it than any NA oil blend). CSIS reports indicate Montreal mayor getting paid under the table by Saudi to keep doing this. Because of this, we raw Crude derailments in Quebec few years ago and also shipment to Saint John's NB refineries of Alberta oil through BC and Panama Canal.

This was the exact divide that O'Toole just recently mentioned. Canadian provinces not being on the same page.

Anyways, I can go on and on about his. Maybe I should hold a podcast on this if anyone wants to learn more about Canadian Politics and its effect on Canada's natural resources, or an info session on "the lies about renewable technology" lol

 

[JaDed]

I don't see much of tech in texas. Seattle and California are the main hubs. Texas though has access to ports, has a great chemical industry and has a massive population and market which keeps them moving.

As discussed possibly a trillion times by me on this forum, both Oil & Natural Gas are here to stay. The thing about Solar, Wind, Bio Gas is just blown out too much. World energy can't be sustained through low efficiency battery powered cars, solar and Wind. Infact some may argue (including a leftist Micheal Moore) that battery powered cars, solar and bio gas is worse. Most of hte process requires mining for rare earth metals (usually involved detonation) and compressing these metals to form batteries and solar panels under extremely high temperatures (3000C +). Anyways, so with all that being said, IEA still predicts rise in demand for both Oil and specially natural gas. Coal may be a dead industry though as Natural Gas plants have proven to be a lot cleaner and higher in efficiency. Infact, NG powered cars could be a the one to phase out ICE cars.

In regards to Calgary, well overall Alberta now has more renewable plants than anywhere else in Canada. But it does require a lot of federal govt subsidy and other funding (thanks to Green capitalists running the show). However I foresee some of these facilities to shut down int he next 5 years (same thing happened in California and Nevada). Reason being it might still not be feasible without govt grants to run these facilities. As for Gas, Shell has a $40B LNG project going on right now along with pipeline to Kitimat BC for export to Asia. As mentioned before, this is the energy for the future.

Oil industry took a toll on those who deal with WTI. Some companies who deal in brent are still doing well. Cost reduction is the main goal and sale of end products (or refined products) is making them money. Unfortunately rest of Canada didn't help alberta as much when it came to getting this oil with least amount about Carbon emissions behind it in the world to tidewater. TMX pipeline is the only positive thing which is under construction right now. The energy east pipeline was killed thanks to Quebec who cited "environmental" concerns, yet are willing to dump raw sewage in St. Lawrence river and buy Saudi Oil (that has more CO2 behind it than any NA oil blend). CSIS reports indicate Montreal mayor getting paid under the table by Saudi to keep doing this. Because of this, we raw Crude derailments in Quebec few years ago and also shipment to Saint John's NB refineries of Alberta oil through BC and Panama Canal.

This was the exact divide that O'Toole just recently mentioned. Canadian provinces not being on the same page.

Anyways, I can go on and on about his. Maybe I should hold a podcast on this if anyone wants to learn more about Canadian Politics and its effect on Canada's natural resources, or an info session on "the lies about renewable technology" lol

Thanks for the detailed reply.

Texas Tech is more like secondary to Cali,Seattle, am currently in Texas and see a huge upside to it due to its labor laws and upcoming "hipster" hubs like Austin.

Calgary and Quebec issues are what I hear a lot and so many comments about online as well, tbh good percentage of my savings are in Oil companies although am not very hopeful but i usually hold long term.

Natural gas has a lot going for it including Warren B, Oil not too sure but time would tell probably in an year.

My fav Quebec - Alberta skit.

 

[Stewie]

Texas is pretty big in tech. I don’t know why people think it’s just oil and gas there. It’s no Silicon Valley but we have Dell, Samsung, Apple, Google, Intel, IBM, Cisco, Facebook in just Austin. Then there are bigger metro areas like Houston and Dallas who have plenty of tech employers.

 

[Slog]

Texas is pretty big in tech. I don’t know why people think it’s just oil and gas there. It’s no Silicon Valley but we have Dell, Samsung, Apple, Google, Intel, IBM, Cisco, Facebook in just Austin. Then there are bigger metro areas like Houston and Dallas who have plenty of tech employers.

Austin’s Tech capital of Texas

Also healthcare is huge here

 

[Bigboii]

Austin’s Tech capital of Texas

Also healthcare is huge here

All of tham big Macs and BBQs working their magic

 

[JaDed]

Austin’s Tech capital of Texas

Also healthcare is huge here

You are in Texas? Somehow assumed you were in NY.

 

[JaDed]

All of tham big Macs and BBQs working their magic

Healthcare has so many aspects but most people dumb it down coz junk food, I'm employed in that domain currently and its unique..

From Insurance,Urgent Care,Occupational Healthcare,Hospitals ,Clinical(group of clinics belonging to a certain corp) to EHR software companies--.. its not as straightforward as other countries...

Also the reason why Google,Microsoft with Healthcare APIs and Amazon Alexa becoming HIPAA compliant have all dived into it.. Google has specific cloud consultant openings with Healthcare experience(domain and tech)

I have not mentioned another and that is Pharmacy..which am still not sure about as to how it works technically.(software wise)

 

[ahmedzee]

Thanks for the detailed reply.

Texas Tech is more like secondary to Cali,Seattle, am currently in Texas and see a huge upside to it due to its labor laws and upcoming "hipster" hubs like Austin.

Calgary and Quebec issues are what I hear a lot and so many comments about online as well, tbh good percentage of my savings are in Oil companies although am not very hopeful but i usually hold long term.

Natural gas has a lot going for it including Warren B, Oil not too sure but time would tell probably in an year.

My fav Quebec - Alberta skit.

Yeah, you are right about Austin. I heard a lot about it, and yes lots of tech companies are starting up there.

In regards to your oil companies' investments, don't worry about it. Production in US is at an all time low and with Laura coming, a lot of production has been forced to shut down. You are going to see oil rise back up a bit now and a lot more once Covid situation improves (US has been producing more hence the lowering of oil prices, demand has steadily still increased). Once you see $65-70 oil, your investments will bring some fruit.

As I said, it is fashionable to be green these days, but there is no comparison to oil & NG as a fuel.

The thing about Quebec is, this alberta industry, both Oil & Gas, employs the likes of SNC Lavalin, ABB and so many other companies based in quebec. The workers were laid off due to oil crash in 2016 and even now. This is 70% of Canada's exports, and supports the steel and manufacturing as well in Ontario. So it is in everyone's (Canadians) best interest to support this. The pioneers of "Green Energy" Norway did unite behind their oil industry and ensured the whole country is on the same page when it comes to exporting it to the rest of europe. They don't advertise it as much (Stat Oil is their national company) but they only advertise how many wind turbines they've built. Under the table everything is going on, and infact their environmental record is not as stringent as that of Canada. So in the same way, Canada should be united as well, seeing that Oil and gas is going to be used for Decades (if not centuries) to come. Only a strong leader can now do this. Media also has a responsibility to uncover these corruption cases of getting paid under the table from Saudis. Actually, you never know. Maybe media is also getting paid under the table lol.

 

[Slog]

You are in Texas? Somehow assumed you were in NY.

I am in Texas as I write this. But yea based primarily out of nyc

 

[JaDed]

Yeah, you are right about Austin. I heard a lot about it, and yes lots of tech companies are starting up there.

In regards to your oil companies' investments, don't worry about it. Production in US is at an all time low and with Laura coming, a lot of production has been forced to shut down. You are going to see oil rise back up a bit now and a lot more once Covid situation improves (US has been producing more hence the lowering of oil prices, demand has steadily still increased). Once you see $65-70 oil, your investments will bring some fruit.

As I said, it is fashionable to be green these days, but there is no comparison to oil & NG as a fuel.

The thing about Quebec is, this alberta industry, both Oil & Gas, employs the likes of SNC Lavalin, ABB and so many other companies based in quebec. The workers were laid off due to oil crash in 2016 and even now. This is 70% of Canada's exports, and supports the steel and manufacturing as well in Ontario. So it is in everyone's (Canadians) best interest to support this. The pioneers of "Green Energy" Norway did unite behind their oil industry and ensured the whole country is on the same page when it comes to exporting it to the rest of europe. They don't advertise it as much (Stat Oil is their national company) but they only advertise how many wind turbines they've built. Under the table everything is going on, and infact their environmental record is not as stringent as that of Canada. So in the same way, Canada should be united as well, seeing that Oil and gas is going to be used for Decades (if not centuries) to come. Only a strong leader can now do this. Media also has a responsibility to uncover these corruption cases of getting paid under the table from Saudis. Actually, you never know. Maybe media is also getting paid under the table lol.

Yeah I mentioned the Norway Tesla sales somewhere and how people of Norway are aware when interviewed that their country exports oil to subsidize EVs.

Scandinavian countries have been smart for about 100 years now, they know what's important unfortunate Canada seems to be going the left way(economically) in some states probably because it wants to be a poster boy for righteous Liberals.