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

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

  1. Dr_Fandango44

    Dr_Fandango44 Road Train Member

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    Don't be surprised if oil drops as low as $40 barrel. It's all about supply and demand. The oil price is in free fall and the bottom hasn't hit yet.
    the supply has outstripped demand so the price has dropped and it's certainly helped that the Saudis have refused to cut production.
    The US has pretty much doubled its production in around 8 yrs and could double again in the next 7.
    The thing is, this could spell trouble for some countries who are heavily in debt and depend on oil revenues to pay back that debt.
    venezuela is one of them. 2015 could be an interesting year. If you have investments especially in stocks I think you should be ready for a rocky ride. I'm certainly watching carefully. Good luck.
     
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  3. Driver5

    Driver5 Light Load Member

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    Could happen. The Saudis just announced they won't even call a meeting to discuss cutting production levels until oil drops to $40/barrel for 3 straight months:

    http://www.zerohedge.com/news/2014-...e-after-arab-emirates-hint-40-oil-coming-next

    No, it's not. A HUGE part of the price drop is due to speculation (investors, banks, etc). It's a lot more complicated than basic supply and demand.

    As it is, the small uptick in oversupply doesn't nearly correlate to the drastic drop in pricing... the market is going to self-correct long before all the rigs here get shuttered.
     
  4. Arky

    Arky Heavy Load Member

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    Yeah...it's really, REALLY complicated.

    Anyone who couldn't see this one coming must have had their head buried...somewhere.
     
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  5. Driver5

    Driver5 Light Load Member

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    Yup, their heads might even be buried in that same place as those who think the 07 economic collapse was directly caused by "high gas prices". lol
     
    TLeaHeart and RocketmAAn Thank this.
  6. flightwatch

    flightwatch Road Train Member

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    You hit the nail on the head. Fortunately, I was able to get on with a company that has been in the area for over 40 years, is 100% debt free, and has plenty of cash reserves to stay afloat for a long time. There is still plenty of work going on down here, but people are definitely nervous. Apache seems to be the most ambitious in this area. They have 9 rigs on one lease out here (2-3 wells per location,) and they have stated that they are going to continue drilling. Everybody is hoping that this will be short term, but they are buttoning down the hatches just in case.
     
  7. kemosabi49

    kemosabi49 Trucker Forum STAFF Staff Member

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    Back then the economy took hits from many directions. One of the bigger hits wasn't from "high gas prices". It was due to the price of oil dropping like a rock. Hmmm. I wonder....
     
  8. MP3 > CB

    MP3 > CB Medium Load Member

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    I doubt this is about supply and demand, just like precious metal, I suspect the price of oil can be rigged.

    Sure, I know all about theoretical free markets, but I also know about predatory pricing.

    The fact that this major drop in prices coincides with the Ukraine/Crimea struggles and economic sanctions against Russia, I suspect the fall in prices is designed to damage Russia.
     
  9. 4x4_Welder

    4x4_Welder Medium Load Member

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    The Ruble is at a record low-
    Maybe I should actually buy some this time. If I had bought back when Russia was in their massive economic crisis like I planned to, I wouldn't have had to work. Instead, my mother "managed" my account, and day-traded all my money away on AOL like I told her not to do.
     
  10. MP3 > CB

    MP3 > CB Medium Load Member

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    Interesting. I made my comment before reading the thread.
     
  11. MP3 > CB

    MP3 > CB Medium Load Member

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    You're one exotic trucker/investor. :)
     
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