Crude oil is $86 today.... beginning of the end?

Discussion in 'Oilfield Trucking Forum' started by kogaFX, Oct 9, 2014.

  1. kogaFX

    kogaFX Light Load Member

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    I remember being told a few years back that the boom would bust if crude oil went below 90 dollars. It went below 90 dollars today, and down some more to 86. I don't wanna be all gloom and doom but do we got any knowledgable folks here as to how this will impact drilling? I heard north dakota is the most expensive crude on us soil so it will be the patch to die first.


    I think we need some more arab uprisings and wars in the middle east to kick that price back up :biggrin_25524:
     
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  3. orangepicker

    orangepicker Road Train Member

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    yes we are headed back down to a buck a gallon soon ....freight rates will drop to .80 cents a mile
     
  4. xsetra

    xsetra Road Train Member

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    Next week it will be back up.
     
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  5. Driver5

    Driver5 Light Load Member

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    Lol sorry OP, but the key part of your worries, "someone told me" and "a few years ago" are exactly why said worries are unfounded.

    BTW, anyone employed in the oil industry should be doing at least basic research into industry economics regularly, rather than relying on an outdated rumor mill or what their coworker's friend's mailman's cousin's dog overheard from someone else.

    FYI- While oil dropping below say $80-ish can slow down production in some areas, crude can go waaaaaaaaay below that and fracking will still be massively profitable in many areas ($53/barrel average current break even in the Eagle Ford and $59/barrel average current break even in the Permian, for example).

    That average break-even number is higher in the Bakken and the Northeast US, but a combination of technology, tax incentives, corporate consolidation, and other major factors are bringing that number lower and lower every fiscal quarter.

    In layman's terms, there's nothing to worry about any time soon. (seriously)

    Don't take my word for it though, do your own research and alleviate your concerns for good.
     
  6. Eninety2

    Eninety2 Medium Load Member

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    I read $43 for Permian a few months ago.
     
  7. Driver5

    Driver5 Light Load Member

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    Where did you read that the average break-even in the Permian is $43? I'd LOVE to see their sources because as low as it's gotten, that sounds like some serious number-fudging going on there.
     
    Chinatown Thanks this.
  8. Arky

    Arky Heavy Load Member

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    Personally, I believe that we'll see $60/barrel oil soon. I don't have a thing to back up my opinion and I'm not a debater. I do know what cycles are though and feel one coming on. I don't think the price drop will last long and global events could easily prevent the drop. But, I'm sticking with me 60 bucks.

    Long term? I wish I had a bank roll to invest if it does hit 60.
     
    Chinatown Thanks this.
  9. Dr_Fandango44

    Dr_Fandango44 Road Train Member

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    Obviously oil prices are trending down. It broke through the $85 barrel support which is significant for the techies. It could fall further so the next number will be $77. If it falls through that then who knows.
    it could very well fall to $60.
    Theres a massive glut and this fall has been on the cards for awhile. I saw a fuel price of $3.24 the other day just south of St. Louis. Should keep falling, so it's all negative. Time will tell if prices will reverse. I doubt it will happen anytime soon. Could see diesel go below $3.00 gal. Now that will be something.
     
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  10. Chinatown

    Chinatown Road Train Member

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    Looks like the KeystoneXL pipeline is doomed. Canada is tired of fooling with American politicians and First Nations and is planning to use existing unused gas pipelines to ship the tar sands oil Eastward to the Atlantic side of Canada for shipment overseas.

    Quebec will make money since the pipeline runs through that province.
     
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  11. Dr_Fandango44

    Dr_Fandango44 Road Train Member

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    I guess Obama can't make his mind up because of carbon emissions that the pipeline will create. I don't think the Chinese or the Russians are too concerned about this issue.
     
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