Author Topic: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.  (Read 253728 times)

Cardboard

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Joe689

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1101 on: September 15, 2019, 05:14:47 AM »
This could be the big one, the ME meltdown, the 100 oil situation.     Would fit a bad situation with lowering rates and no inflation.  Oil spikes coincide with recessions.  Feds are running out of tools.  Iran may be taking the rest of the world with it

SharperDingaan

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1102 on: September 15, 2019, 07:10:15 AM »
The ME is where an ‘eye-for-an-eye’ was invented, and goes back to Hammurabi’s Code and the Babylonian Empire;
start a conflict, and there will be no winners. Take out my oil facilities, and I will take yours.; WTI spikes, inflated US and EIA inventory reserves on stand-by to mitigate?

Notable is that Iran needs (short-term) higher crude prices (to discount from), and the US/SA/etc. needs lower ones (long-term) to prevent demand collapse and a resurgence of US shale production. WTI at maybe USD 55-60 for the US, USD 65-75 for the Iranians?

Iraq used to have Hussein, Iran used to have Khomeini? SA used to have King Abdullah/MBS?
 

Sadly, selected quotes from a previous post .. that would seem somewhat precscient today.
The reality is that oil facilities cannot be protected against against attack, no matter how mighty your weaponry. The real protection was an 'eye for an eye', now being tested. SA needs the Aramco IPO to go through, and the new oil minister (MBS) needs to demonstrate strength. Not a healthy combination. 

SA will allready be sucking hard on global inventory, and WTI prices will reflect it. Most would expect additional sucks as retallitory strikes take place, and daily draws continue for longer than anticipated. The US/SA will have itchy fingers; and it is not hard to launch additional strikes on previously damaged facilities, and/or sever pipelines to prevent egress from Red Sea loading facilities.

The long-term 'plan' may be 'regime change' in Iran. But today; most would argue that it's really 'regime change' in BOTH Iran and SA.
They are each others Yin/Yang, take one and the other collapses as well.

Interesting times.

SD

« Last Edit: September 15, 2019, 11:12:48 AM by SharperDingaan »

Joe689

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1103 on: September 15, 2019, 10:22:08 AM »
Iran might be playing "if we go down, everyone goes down" in relation to the economies.  Iran may calculate that a spiking oil price could easily lead to world recession.  Historic low rates and spiking consumer gas prices is a dangerous combination.  Iran may play that card. 

Spekulatius

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1104 on: September 15, 2019, 05:30:20 PM »
I think the spike in crude will be relatively contained and short lived.Aramco is probably going to restore the destroyed facilities in a few weeks and the release from the strategic reserve will compensate for any short term restrictions. If we indeed go into a recession, crude prices will go down anyways.
« Last Edit: September 17, 2019, 06:57:19 PM by Spekulatius »
To be a realist, one has to believe in miracles.


SharperDingaan

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1106 on: September 17, 2019, 12:30:02 PM »
We think that KSA has to reply in weeks versus months, and do it before the strip goes into contango in any major way.
As long as the focus stays on the physical spot, and successful ability to meet the on-demand draw through global inventory/reserves; WTI can stay at around 55-65. Start delaying, and it is hard to see how pricing on the future months does not go up. If/when the strip goes into significant contango; the whole world starts hedging again, and US shale starts back up.

Aramco is already delaying Chinese October loadings by up to 10 days, and short-loading light crude. 1 VLCC/day x 10 days is only 20M boe. Rationing because Aramco just does NOT have it in inventory? And future months on the strip are NOT going to reflect this?
https://oilprice.com/Latest-Energy-News/World-News/Aramco-Delays-Some-Oil-Loadings-For-PetroChina-After-Attacks.html

It's still early days.

SD




SharperDingaan

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Re: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.
« Reply #1108 on: September 30, 2019, 02:19:41 PM »
Shale isn't going away. While bankers may foreclose on current players, they aren't in the business of running o/g assets - and will do everything they can to get rid of them. New players simply buy cheap, wait for prices to turn, then borrow to the max again. Rinse and repeat.

Different story for KSA.
2,500 Saudi troops captured/killed over the weekend, the east-west pipeline is now unprotected, and the UAE is withdrawing troops from Yemen. The Saudis also haven't repaired their facility, they've just replaced production - from inventory & others excess capacity; a large portion of which can only be 're-branded' Iranian oil. Captive Saudis are being pressured to support the domestic tranche of the Aramco IPO, and the Saudi military has been unable to respond to the Houthi attacks. MBS is dripping blood in the water - amidst a lot of very unhappy people. And lots of people playing with matches .....

https://www.theguardian.com/world/2019/sep/29/houthis-claim-killed-hundreds-saudi-soldiers-captured-thousands

SD

Joe689

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Now Iraq chaos is brewing.  This middle east powder keg is getting worse.