Crude prices below $80 a barrel - what does this mean for the oil haulers?

[pickup driver]

With crude prices dropping, what are your opinions on the effect it will have on oil-haulers? Some are saying crude could go down to $75/barrel.

Also, have you heard the EPA is levying fines against oil companies that have failed to include a certain additive to their fuels. The additive is cellulosic biofuel. The problem is that cellulosic biofuel doesn't exist! The EPA set a 2011 quota for production of this but nobody produced it...so the EPA raised the quota for 2012. These people are soooo intelligent!!! What do you think will happen with this situation?

Thank you for your opinions and knowledge.

[stanman63]

just like anything in the oil and gas ind. they could start stacking out rigs and not drilling this summer and every thing will slow down!! oil and gas is up and down work its feast or famin! people come out here thinking there going to make all this money and they shut the spicket off. if your not a saver it could get a littl rufff. me i want it i dont like the idea of all these companys hiring new drivers with no exprience.jmo!!!!

[RickG]

I hope you realice most of the oil being pumped from these wells is being exported . It would take years to build enough refineries to process enough domestic oil to reduce the amount we import .
China is building more refineries so guess where the oil in those booming oilfieds is going .

[stanman63]

NEW YORK (AP) — Shares of oil services company slid on Monday, as tumbling oil and natural gas prices point to tougher times for well drillers and other companies working with the petroleum industry.Companies like Ensco PLC, National Oilwell Varco Inc. and Noble Corp. make money by mapping underground reservoirs, drilling wells, fixing equipment and providing a host of other services to oil and gas companies. Demand for those services has declined as prices fall and companies idle operations at some U.S. wells.
The price of benchmark U.S. crude has dropped by 23 percent since peaking in February above $109 per barrel. Prices fell this year on growing concerns of a European financial crisis that could reduce demand. On Monday afternoon the price of crude was down 30 cents at $83.73 a barrel.
Natural gas also has been on the decline this year, falling to a 10-year low in April, as a jump in domestic production and a relatively mild winter boosted supplies.
Raymond James analyst J. Marshall Adkins expects the number of active U.S. land-based rigs to fall by 500, or roughly 25 percent, from now until the end of 2013. With fewer rigs operating, service companies will have a tougher time finding work and they'll likely cut prices to get business. That means lower profits are likely across the industry.
"We believe that U.S. drilling activity must eventually come down in order to rein in supply growth to help balance the market," Adkins said in a research note on Monday.
He downgraded 10 service companies. Ensco, National Oilwell, Noble Corp., Ocean Rig UDW Inc., Patterson-UTI Energy Inc., and Superior Energy Services Inc. were dropped to "Outperform" from "Strong Buy." Hercules Offshore Inc. and Key Energy Services Inc. were downgraded to "Market Perform" from "Outperform." He moved Basic Energy Services Inc. and Global Geophysical Services Inc. to "Underperform" from "Market Perform."
In afternoon trading Ensco shares were down about 1 percent at $43.51, National Oilwell fell 2.1 percent to $66.44, Noble Corp. was off almost 3 percent at $30.67 and Ocean Rig lost 2.3 percent at $13.02. Patterson-UTI, fell about 1 percent to $13.91, Superior Energy dropped 4 percent to $18.81, Hercules Offshore was down about 10 percent at $3.11, Key Energy down 5.5 percent at $8.97, Basic Energy off 4 percent at $9.46 and Global Geophysical fell about 7 percent


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[pickup driver]

Thanks for the replies and info...weighing our options so I appreciate the input. It is a complex industry...so many variables. Thank you again!

[Gorgeous George]

I hope you realice most of the oil being pumped from these wells is being exported . It would take years to build enough refineries to process enough domestic oil to reduce the amount we import .
China is building more refineries so guess where the oil in those booming oilfieds is going .

Yeah....the train that just left this railyard is headed to Eden MN. Must be a tanker sitting there to haul to oil to China.

[Guntoter]

Time to sell the oil trailer and buy a step deck or an RGN to move equipment from The Dakotas to the Port of Houston. Then in 6 months when oil is $140 we can haul it all back north.

[MNdriver]

and the price of fuel is still high at the pumps.....


Go figure...