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OPEC deal collapse sparks price war: ‘$20 oil in 2020 is coming’

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herm0016

Diamond Member
Feb 26, 2005
7,312
375
126
or anything lifted with big chrome wheels. we will see. give it a few weeks.

lots of divorces too, when the dudes stay home and don't have that oil money flowing.

if you want a ford raptor now is the time to pick one up with low miles
 

Fenixgoon

Lifer
Jun 30, 2003
27,121
1,898
126
well shit. anyone want to buy my stuff?

its not about Russia trying to control the price of fuel or get us to buy more large cars.

it's about them hating that we are on a path to export crude and NG. they still want to kill our production, last time they tried, they did not think we would be able to cut the total production cost 30% in a matter of months by getting better and more efficient at it. we are close to our efficiency limits on production. they can still beat us on price if they really want to. they REALLY dont want us to start exporting NG, Russia supplies most of Europe with NG and ours is way way cheaper. wholesale NG is more than 50% cheaper in the US than it is in Europe.

hopefully because I am a one man team I can just expand the scope of my job to include other people who get let go.

yes, i work in o&g. more than 11 years now.
what are our options this time around? i know a little bit about O&G, but not enough to even have a remotely knowledgeable opinion
 

UNCjigga

Lifer
Dec 12, 2000
22,532
4,699
136
Let's stay on topic here. Oil stocks closed down about 30% across the board today. Chevron and Exxon Mobil are down 33% and 40% YTD respectively. Who wants to guess what's going to happen next?
Significant capital infusions from Gazprom/Lukoil?
 
Nov 8, 2012
17,655
3,414
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I think M&A is going to happen very, very fast. Free money, a friendly DOJ, and banks with nothing better to do will grease the skids. But, yes, layoffs are coming to oil patch. The U.S. is the biggest producer of oil but it is a high price producer will will bear the brunt of the price collapse (which benefits both the Sauds and the Russians long term).
I mostly agree with this - but only if it is so drastic (and drawn out) for this to occur. Plenty of companies aren't going to die over a month of slight losses.

What I have to ask is this.... There's going to be tons of production here in the states, REGARDLESS of if some smaller upstream companies get bought out... If an area has been tapped, it's not going to just be abandoned. So my point being, if Russia (and/or Saudis) are trying to drive down production in the US, I don't see how they can win that.
 
Nov 8, 2012
17,655
3,414
126
what are our options this time around? i know a little bit about O&G, but not enough to even have a remotely knowledgeable opinion
Were capitalism vs. authoritarian that can command how much oil is produced.

Our government can only control it (slightly) with regulations. (e.g. no drilling in x location because y legitimate reasons).

This is definitely a disadvantage of capitalism, because while we can have a robust economy from citizens, we can't easily command the market.



Ultimately, I can't think of anything that we can do from the perspective of helping American oil companies if that is what you mean?
 

herm0016

Diamond Member
Feb 26, 2005
7,312
375
126
what are our options this time around? i know a little bit about O&G, but not enough to even have a remotely knowledgeable opinion
we cant stop importing. it would be worse, as we need the crude to keep our refined products export business strong, we are a huge net exporter of refined products. so when you see a huge import number, know that a lot of it goes back out as refined products.


there is a lot of production, but companies do sell off or just shut in wells and wait for prices to come back. if the oil is not being sold, and the pipes are full, there is just no where for it to go. it is still a physical product, and you cant just put it in a warehouse.
 
Nov 8, 2012
17,655
3,414
126
well shit. anyone want to buy my stuff?

its not about Russia trying to control the price of fuel or get us to buy more large cars.

it's about them hating that we are on a path to export crude and NG. they still want to kill our production, last time they tried, they did not think we would be able to cut the total production cost 30% in a matter of months by getting better and more efficient at it. we are close to our efficiency limits on production. they can still beat us on price if they really want to. they REALLY dont want us to start exporting NG, Russia supplies most of Europe with NG and ours is way way cheaper. wholesale NG is more than 50% cheaper in the US than it is in Europe.

hopefully because I am a one man team I can just expand the scope of my job to include other people who get let go.

yes, i work in o&g. more than 11 years now.
My main question from all of this is if it's going to drive consumer decisions on their vehicles or are people already declared what they prefer?

For instance, does anyone honestly look at the price of gas and say "Yeah, I better not buy an SUV... I have 3 kids and a ton of shit, but I'll just try to make due with a sedan"?
 

herm0016

Diamond Member
Feb 26, 2005
7,312
375
126
My main question from all of this is if it's going to drive consumer decisions on their vehicles or are people already declared what they prefer?

For instance, does anyone honestly look at the price of gas and say "Yeah, I better not buy an SUV... I have 3 kids and a ton of shit, but I'll just try to make due with a sedan"?

i kind of doubt it makes a huge difference until the price is 5 or 6 bucks a gallon. we are hedged. One truck and one plug in.
 

vi edit

Elite Member
Super Moderator
Oct 28, 1999
60,951
4,481
126
My main question from all of this is if it's going to drive consumer decisions on their vehicles or are people already declared what they prefer?

For instance, does anyone honestly look at the price of gas and say "Yeah, I better not buy an SUV... I have 3 kids and a ton of shit, but I'll just try to make due with a sedan"?
I think the more important statistic to look at is an overall shift away from driving in general and total miles driven by your average American annually. That number isn't going up.
 

BUTCH1

Lifer
Jul 15, 2000
19,392
1,058
126
I have a 2018 F-150 supercrew. 3.5l eco-boost twin turbo, 10 speed transmission, 4x4. It's our daily driver. We've gotten as much as 24 mpg on flat open highway...but average closer to 20.
And that sounds about right.
 
Nov 8, 2012
17,655
3,414
126
I think the more important statistic to look at is an overall shift away from driving in general and total miles driven by your average American annually. That number isn't going up.
Interesting. Never thought of it that way... But does that really mean anything?

Might just mean less road trips, more flights?
Or more working from home (for the affluent upper middle class)?
....But overall if the average mileage isn't going up, that doesn't necessarily mean it SHOULD be going up? Majority of folks commute to work and go to stores on occasion - so why from year to year would it be expected to go up?
 

vi edit

Elite Member
Super Moderator
Oct 28, 1999
60,951
4,481
126
Interesting. Never thought of it that way... But does that really mean anything?

Might just mean less road trips, more flights?
Or more working from home (for the affluent upper middle class)?
....But overall if the average mileage isn't going up, that doesn't necessarily mean it SHOULD be going up? Majority of folks commute to work and go to stores on occasion - so why from year to year would it be expected to go up?
Don't look at it so myopically. Teenage license rates are dropping in half from what they were in the 80's. And a lot of them aren't converting that into car purchases as they get older. Telecommutes, a push to urban density and public transit/biking/walking reduce demand. Some people just completely skip the vehicle at all (or greatly reduce it's need) and our overall per capita fuel use is on a 10 year sustained downtrend.
 

alcoholbob

Diamond Member
May 24, 2005
6,164
270
126
Oil may be $20 in today's dollars but the dollar index is already moving down and will continue to do so as the fed cuts rates. That help keep oil prices more elevated even as demand crashes.
 

dawp

Lifer
Jul 2, 2005
10,312
1,527
126
Actually road damage increases dramatically with extra weight in greater than linear manner. It’s what Michigan roads are pulverized to shit because we have highest allowed weights in the country.
that and road salt doesn't help any either.
 

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