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

Well, solid huge corporations that pay dividends and are multinational are not the same as the oil boom in the Dakotas and Texas. Dividend aristocrat companies like Exxon Mobil are usually pretty darn safe, but I would wait to see if stock market goes down a lot before putting any money in. Nice thing about real estate is you can live in it, or rent it.

 

I do agree with your first statement to an extent. In the past, most booms lasted 5-6 years. However that was before the fracking technology came into play. I really think that we are now at a point where there isn't really an end in sight with drilling and production. The amount of oil that is now accessable with fracking is staggering. Of course, supply and demand will play a huge role in drilling, as it always has, and that could cause slow downs.

 

Here is an interesting article from about a year ago from Energy & Capital.

http://www.energyandcapital.com/articles/west-Texas-oil/4108

 

https://fortune.com/2014/10/10/could-the-shale-oil-boom-be-ending-it-all-depends-on-oil-prices/

Most analysts predict that companies will stay the course for the short-term as prices of West Texas Intermediate crude, the U.S. benchmark, briefly dipped below $85 Friday before recovering to $86. In June, a comparable barrel cost as much as $105.
But if oil prices fall below $85 and remain there for several months, analysts predicted companies would start taking a hard look at next year’s drilling plans. Should they fall below $80, then mid-sized and small producers may cut back their spending and suspend some of their operations.
“If it falls below $80, the companies start having the conversation of slowing down their drilling activity,” said Daniel Katzenberg, an analyst with Robert W. Baird. “It would have to be there for several months for them to actually follow through and reduce drilling plans.”
David Pursell, managing director at advisor Tudor Pickering. Holt & Co. concurred that $80 is a point when U.S. oil industry may start reassessing its shale production. It would unlikely have any impact on the big oil companies like ExxonMobil XOM 0.26% because most of their projects are planned far in advance.

 

Sorry, but the technology created this boom, and the production fall off has been staggering, quicker than expected, and now most of the drilling is just to keep production even, not increase it. And 3 of the major players in drilling, are all selling off land, at 1/3 to 1/4 what they paid for it, so they can afford to keep drilling.
For 2014 NONE of the drilling companies announced plans to expand drilling, only to maintain. Some in their last quarterly statements have not even reached that goal.
This boom is over.... we are at the plateau stage.

 

http://www.msn.com/en-us/money/ins...market-what-the-fall-in-oil-means/ar-BB96a6m

http://www.msn.com/en-us/money/mar...l-market-get-used-to-lower-prices/ar-BB90FE2

 

Good articles. It would be nice to get someone in the White House that is more open to domestic production. If that were to happen, they may be able to get more pipelines, refineries and storage facilities in the works.

 

even if we become self sustaining, with current laws, oil companies can NOT export crude oil... stupid legislation, to supposedly protect our "limited" supplies...

even if the boom continued, it would still tank the price, with the ban against exporting crude.

 

What this will do is expose poorly ran drillers/companies and this will be fatal for them. The estimates are just that, guesses though experienced its still a guess. For those of us in the field, you will begin to see it take hold shortly. There are already moves in my company that brings me to conclude that the slowdown is coming. Watch for the rigs folding, and you will soon get the picture of who were the weak hands.

This happened with the last big dip in price. Some companies folded them back up and others stayed down and moved on at times. I suspect the competition here and the cut throats of prices will begin after the first few rigs fold down. I suspect it will be ugly and get uglier the lower the price. Besides Greece Needs another bailout

 

I'll tell you exactly why the Keystone pipeline is being blocked.

BNSF owns ALL of the rail lines between western Canada and the US.

BNSF charges $30/bbl to haul that oil(the KPL could do it for about $10).

BNSF is owned by a company chaired by Warren Buffett.

Warren Buffett donated a crap ton of money to the political party of the current administration over the last couple of election cycles.

No one gives money to politicians without wanting something in return.

The maths. Do them.