Cardboard Posted September 30, 2015 Share Posted September 30, 2015 The situation for the Saudis is getting worse by the day. http://www.theguardian.com/world/2015/sep/28/saudi-royal-calls-regime-change-letters-leadership-king-salman And Putin is wasting no time after receiving authorization to use military force: http://www.theguardian.com/world/2015/sep/30/russia-launches-first-airstrikes-against-targets-in-syria-says-us Cardboard Link to comment Share on other sites More sharing options...
Jurgis Posted September 30, 2015 Share Posted September 30, 2015 In the spirit of Mauboussin forecaster thread, I'll go with the following predictions: - 10% chance of regime change in Saudi Arabia by the end of 2016. - 5% chance of civil war inside Saudi Arabia by the end of 2016. - 80% chance of oil price over $60 by the end of 2016. - 30% chance of oil price over $70 by the end of 2016. - 10% chance of oil price over $80 by the end of 2016. Link to comment Share on other sites More sharing options...
rb Posted September 30, 2015 Share Posted September 30, 2015 lol I shall continue in the same spirit: 10% chance we have flying cars by the end of 2016 5% chance we have clean energy by the end of 2016 :) Link to comment Share on other sites More sharing options...
Jurgis Posted September 30, 2015 Share Posted September 30, 2015 lol I shall continue in the same spirit: 10% chance we have flying cars by the end of 2016 5% chance we have clean energy by the end of 2016 :) You realize that you are actively killing your Brier score? ;) http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/mauboussin-sharpening-your-forecasting-skills/ Link to comment Share on other sites More sharing options...
rb Posted September 30, 2015 Share Posted September 30, 2015 Wow I have a Brier score? :o lol Link to comment Share on other sites More sharing options...
Jurgis Posted September 30, 2015 Share Posted September 30, 2015 Wow I have a Brier score? :o lol Now you do. ;D Link to comment Share on other sites More sharing options...
wescobrk Posted October 1, 2015 Share Posted October 1, 2015 hilarious, I'll join in. .0000000111111111111% I get a date with Scarlett Johansson in 2016. Link to comment Share on other sites More sharing options...
Cardboard Posted October 2, 2015 Share Posted October 2, 2015 The amount of sheer stupidity that I read in some of the bearish articles related to oil are amazing. http://www.bloomberg.com/news/articles/2015-10-01/oil-drillers-bet-choking-wells-will-keep-shale-from-going-bust “You’re losing a barrel today to get two or three barrels tomorrow,” A non-careful reader thinks that somehow this choking technique is doubling or tripling the amount of oil that a well will produce over its life! "Choke management is among a number of strategies -- including moving to richer parts of fields, completing wells with more sand and water, and refracking -- that U.S. drillers have used to stave off a collapse in production. Output has fallen just 5 percent from its peak even though companies have shelved more than half their rigs amid a price slump." Just 5%... In just 5 months... While Alaska has not declined and other conventional sources not much. That is almost a 10% decline for shale or a 20% annualized decline!!! And how is choking new wells increasing immediate production and slowing that decline??? When you read about Citigroup analysts in an article beware. When is the next time that this bank goes bankrupt? Here is a fact: a rig creates direct employment for 225 people. It means that since last year the U.S. has lost 250,000 jobs and I should add good paying jobs. On top of that, Caterpillar, GE, U.S. Steel and a myriad of others are no longer busy producing goods that will serve the oil and gas sector. Is that a surprise that U.S. employment is now looking weak? Cardboard Link to comment Share on other sites More sharing options...
Cardboard Posted October 2, 2015 Share Posted October 2, 2015 26 oil focused rigs removed in the U.S. this past week according to Baker Hughes: http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother Cardboard Link to comment Share on other sites More sharing options...
goldfinger Posted October 2, 2015 Share Posted October 2, 2015 26 oil focused rigs removed in the U.S. this past week according to Baker Hughes: http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother Cardboard Are we heading towards a huge miss in forecasts (Goldman especially) and a historic collapse of production in NA? Link to comment Share on other sites More sharing options...
sculpin Posted October 2, 2015 Share Posted October 2, 2015 26 oil focused rigs removed in the U.S. this past week according to Baker Hughes: http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother Cardboard Are we heading towards a huge miss in forecasts (Goldman especially) and a historic collapse of production in NA? Yes and also a drop in world wide supply as well at the same time demand is ratcheting up throughout the world due to lower prices. Rigs will not be able to come back quickly after the personnel and equipment attrition in the service sector that has taken place in the last 12 months. Link to comment Share on other sites More sharing options...
Cardboard Posted October 5, 2015 Share Posted October 5, 2015 Things are starting to shake up... http://www.debka.com/article/24926/Chinese-warplanes-to-join-Russian-air-strikes-in-Syria-Russia-gains-Iraqi-air-base http://www.themoscowtimes.com/news/article/saudi-clerics-call-for-jihad-against-syrian-government-russia-iran/537207.html Cardboard Link to comment Share on other sites More sharing options...
sculpin Posted October 6, 2015 Share Posted October 6, 2015 Libya & Brazil & Chinese demand oh my With thanks to members of the IV BRY board....http://www.investorvillage.com/smbd.asp?mb=4288&mn=203901&pt=msg&mid=15360575 U.S. oil output on brink of "dramatic" decline, executives say Oct 6 2015, 15:28 ET | By: Carl Surran, SA News Editor Oil industry execs speaking at the Oil and Money conference in London warn of a "dramatic" decline in U.S. production that could pave the way for a future spike in prices if fuel demand increases. Libya's oil output down to 300,000 bpd Oct 5 (Reuters) - Libya's oil production has dropped to 300,000 barrels per day, less than a quarter of what it produced before the 2011 fall of Muammar Gaddafi, mostly because of insecurity and closed pipelines, a top official said. http://www.reuters.com/article/2015/10/05/libya-energy-idUSL8N12536220151005 Oct 5 (Reuters) - State-controlled Petróleo Brasileiro SA , struggling with the biggest debt load among global oil firms, on Monday cut capital spending plans for this year and next by $11 billion in the wake of a slump in Brazil's currency and in oil prices. In a securities filing, the company, commonly known as Petrobras, said planned investments will be cut to $25 billion and $19 billion for 2015 and 2016, respectively, from $28 billion and $27 billion previously. Budgeted costs plus operating expenses excluding purchases of raw materials were trimmed for this year and next as well, the filing said. WoodMac also had a blog entry this morning about why Chinese oil demand is holding: Analysing each oil product and exploring the drivers for each product, we find that gasoline, aviation fuel, and chemical feedstock related products such as LPG and naphtha are expected to grow robustly due to China's growing need for consumption-oriented products. Specifically, we estimate that around 90% of oil demand growth will stem from consumer-related oil products this year, underpinned by rising household income and urbanisation. China's growing middle class will drive the demand for consumer related oil products – of that there is no doubt. Notably, we have seen growth in air passenger traffic expand at a pace of almost 15% in the first seven months of this year compared to the same period in 2014. As such, our view of jet fuel remains optimistic and demand is expected to expand just over 13% through the rest of 2015. http://www.woodmac.com/analysis/oil-demand-China I am not sure when we gonna finish with the media message that Chinese oil demand is slowing, if anything Chinese oil demand is accelerating compared to last year (unlike other commodities): Link to comment Share on other sites More sharing options...
Cardboard Posted October 9, 2015 Share Posted October 9, 2015 http://news.investors.com/business/100915-774938-despite-house-support-obama-may-keep-crude-ban.htm?ven=yahoocp,yahoo&src=aurlled Yup. Let`s starve American oil producers to death along with the jobs that come with it while we feed our worst enemies such as Iran. This will certainly reduce global fossil fuel production. What a clever strategy! Cardboard Link to comment Share on other sites More sharing options...
Cardboard Posted October 21, 2015 Share Posted October 21, 2015 Can`t believe the lies or incompetence from the EIA! Their report claims that Lower 48 States production is once again exactly flat this week! This makes zero sense compared to their own statements about production having come down in September and recent statements from EOG. And how could something like that be exactly flat? Moreover, propane/propylene inventories have not declined in ages. Yet, they are down this week for the first time in months. While I realize that delivery of propane to customers may have increased in preparation for the coming winter, the decrease seems pretty large considering that production from shale wells has overwhelmed demand for a very long time. IMO, it can only mean one thing: U.S. shale oil production along with condensates is indeed coming down. For some reasons, they don`t want to admit that U.S. production has fallen below 9 million barrels per day. I suspect that we will have one more of these "one-time" large adjustment to weekly production as we have had in August. Other than that, the report makes sense on the inventory side with gasoline and diesel/fuel inventories declining while crude inventories are going up along with refineries maintenance which will end shortly. Finally, OPEC is meeting today with 8 non-OPEC producers in Vienna. Let`s see if they can put enough pressure on the Saudis to make them see the light. If not, then I think that Putin will become a little less gentle. Cardboard Link to comment Share on other sites More sharing options...
sculpin Posted October 21, 2015 Share Posted October 21, 2015 Patience. Fundamentals will win out with supply dropping and demand continuing to rise. From Core Labs today followed by Nawar's comments below.... Global demand for hydrocarbon-based energy continues to improve, while worldwide crude oil supply has peaked and fallen in the second half of 2015 and will continue to do so for the remainder of the year. U.S. production continues to fall from its peak in April 2015 and the Company now believes production could fall by over 700,000 barrels of oil per day ("bopd") from that peak by year-end 2015. Internationally, second half 2015 crude oil production is also likely to decline. Core is increasing its estimate of the net worldwide annual crude-oil production decline curve rate to 3.1% from 2.5%. The further decline by 60 basis points is due to sharper decline curve rates for tight oil reservoirs and the significant decline in maintenance capital expenditures for the existing crude-oil production base. At current North American activity levels, Core predicts 2016 crude-oil production to be lower year-over-year; perhaps falling over 900,000 bopd in 2016. If Core numbers are accurate the shortfall in terms of global supplies in 2016 will be substantially larger then what I am expecting, for the US I am expecting a 600K decline in 2016, however CLR is pointing to 900K decline. If prices do rebound in 2H-2016 we may end up with a decline that is closer to my number. Most importantly, I find their 60 basis points increase in the net decline rate to 3.1% (this is after infill drilling) extremely important. At 3.1% net decline (or managed decline) from existing fields in addition to 1.3m expected growth in demand translate into 4.3m barrels of new production the needs to come from new projects, this compares to 3.7m using their previous 2.5% net decline rate. Such subtile yet crucial data point is completely ignored by the media. While traders are fretting about a handful of million barrels in the EIA weekly oil storage report, CLR just removed 219m barrels from 2016 supplies due to accelerating decline rate (something that I have touched upon before on BRY) Regards, Nawar Link to comment Share on other sites More sharing options...
sculpin Posted October 23, 2015 Share Posted October 23, 2015 $130 Brent Oil by 2017 http://www.bloomberg.com/news/videos/2015-10-22/why-crude-oil-prices-may-hit-130-a-barrel-in-2017 Link to comment Share on other sites More sharing options...
investor-man Posted October 23, 2015 Share Posted October 23, 2015 $130 Brent Oil by 2017 http://www.bloomberg.com/news/videos/2015-10-22/why-crude-oil-prices-may-hit-130-a-barrel-in-2017 Heh, who should be believe? This guy or Goldman Sachs or this guy: http://www.bloomberg.com/news/videos/2015-10-21/are-oil-prices-on-the-verge-of-another-major-selloff- C'est la vie Link to comment Share on other sites More sharing options...
valueorama Posted October 27, 2015 Share Posted October 27, 2015 Yup. Let`s starve American oil producers to death along with the jobs that come with it while we feed our worst enemies such as Iran. This will certainly reduce global fossil fuel production. What a clever strategy! Cardboard According to Munger, USA should be last to use up its oil. It gives a strategic advantage long term. Link to comment Share on other sites More sharing options...
randomep Posted October 27, 2015 Share Posted October 27, 2015 $130 Brent Oil by 2017 http://www.bloomberg.com/news/videos/2015-10-22/why-crude-oil-prices-may-hit-130-a-barrel-in-2017 Heh, who should be believe? This guy or Goldman Sachs or this guy: http://www.bloomberg.com/news/videos/2015-10-21/are-oil-prices-on-the-verge-of-another-major-selloff- C'est la vie Come on, nobody knows what the price of oil will be next year, everyone is just making a guess. Link to comment Share on other sites More sharing options...
investor-man Posted October 27, 2015 Share Posted October 27, 2015 $130 Brent Oil by 2017 http://www.bloomberg.com/news/videos/2015-10-22/why-crude-oil-prices-may-hit-130-a-barrel-in-2017 Heh, who should be believe? This guy or Goldman Sachs or this guy: http://www.bloomberg.com/news/videos/2015-10-21/are-oil-prices-on-the-verge-of-another-major-selloff- C'est la vie Come on, nobody knows what the price of oil will be next year, everyone is just making a guess. yeah, that's what I implied 8) Link to comment Share on other sites More sharing options...
John Hjorth Posted October 27, 2015 Share Posted October 27, 2015 A 100B budget shortfall is not sustainable. The forthcoming Iranian production is also no where near what many people thought it might be. SD http://www.telegraph.co.uk/finance/oilprices/11847268/Low-oil-price-forces-Saudi-Arabia-to-cut-spending-amid-record-budget-shortfalls.html Saudi Arabia has projected an official budget shortfall for this year of $39 billion, but the IMF and other institutions believe the actual deficit will be much higher. The IMF forecast in July that the deficit will be 20pc of Gross Domestic Product (GDP), while Saudi Arabia's Jadwa Investment firm said on Wednesday it expects the shortfall to be around $109bn http://www.moneycontrol.com/news/commodities/saudi-arabia-reassuresoil-prices-strategist_2930801.html Croft thinks that Iran's supply likely won't come online until the end of the second quarter of 2016 because of "the types of modifications the Iranians are going to have to do to their facilities to be compliant with the deal." She also doesn't think the output will be 1 million barrels a day, as has been suggested, and instead will fall somewhere between 375,000 to 500,000 barrels per day. http://www.independent.co.uk/news/world/middle-east/saudi-arabia-could-be-bankrupt-within-five-years-imf-predicts-a6706821.html A "coronation party" at the cost of USD 32B! [My immediate thought was of a lot of good food, booze and new fine clothes to all, but I found out by reading somewhere else it was about giving 2 months extra salary to all public employees etc.] Extraordinary dividend from Saudi Arabia Inc. to all! Really makes sense - better pay the extraordinary dividend while there is still some cash there... So much for traditions in a different culture. Link to comment Share on other sites More sharing options...
Cardboard Posted October 27, 2015 Share Posted October 27, 2015 Here is the latest to make oil plunge: http://finance.yahoo.com/news/crude-oil-tumbling-132214670.html The SPR selling part of its oil reserves starting in 2018! While the Chinese are building up their own oil strategic reserve, the U.S. would be selling his in the face of mounting tensions with China (Spratly Islands, soon Taiwan) and Russia (bases being built in Arctic, submarines lurking around undersea cables, bombers regularly defying British airspace, Syria and on and on). Very smart! And while U.S. production is declining pretty fast with no sign of moving back upward. Regarding Munger, it would be very good for me if the U.S. stopped all development of its own oil. However, I think it is not wise. Other countries have reserves for decades and there are mounting signs that oil won`t be needed for energy in about 50 years: fusion and solar. In terms of other usage such as plastics, fertilizer and other, I think that human ingenuity will find substitute in a 50 year timeframe. The problem with U.S. oil development was this gold rush approach that we have seen. Although, this is being corrected fast and won`t come back any time soon. Sure, wells that have been drilled but, not fracked will be completed in the not too distant future. However, no company will be assuming $60 or even less $80 oil in their forecast which will make new project/spending budgets much smaller than they were even if oil was to rebound to the $60 level. Confidence is important in any market and this one is no different despite what the media keeps saying or that shale can come back in a hurry. Cardboard Link to comment Share on other sites More sharing options...
StevieV Posted October 27, 2015 Share Posted October 27, 2015 "Here is the latest to make oil plunge: http://finance.yahoo.com/news/crude-oil-tumbling-132214670.html The SPR selling part of its oil reserves starting in 2018!" Maybe it is making oil move, but I don't see why it would. If I am reading it right, they are talking about 5-10 million barrels/year. That makes it about 14-27 thousand barrels/day and that is in a couple years yet. Doesn't seem particularly material to me. Link to comment Share on other sites More sharing options...
Uccmal Posted October 27, 2015 Share Posted October 27, 2015 Cardboard, I am a bit confused as to what you are getting at. It strikes me that the US machine is responding appropriately. Strategic oil is partly held in old wells. They know the oil is underneath texas, north dakato, etc. If the US military machine needed oil in the event of war, they could very easily drill, and frack, at a rate that would supply years/decades of oil. Wartime tends to accelerate time frames. If anything It appears to be another arsenal in the US economic war to put their potential adversaries into financial duress. 80 million barrels of oil added to the system over a few years is going to severely damage the biggest producers, one of which is Russia. Welcome to cold war part 2. It will also help North Americas oil dependent oil allies. Isn't going to do much for my oil holdings. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now