Crash?

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neverfail
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Crash?

Post by neverfail » Mon Mar 09, 2020 4:57 am

Oil to hit $20 amid Saudi-Russian price war

OPEC+ unravels, prompting Saudi Arabia to flood the market

https://asiatimes.com/2020/03/oil-to-hi ... price-war/

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Sertorio
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Re: Crash?

Post by Sertorio » Mon Mar 09, 2020 5:08 am

neverfail wrote:
Mon Mar 09, 2020 4:57 am
Oil to hit $20 amid Saudi-Russian price war

OPEC+ unravels, prompting Saudi Arabia to flood the market

https://asiatimes.com/2020/03/oil-to-hi ... price-war/
That will do wonders for the US shale oil industry... :twisted:

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armchair_pundit
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Re: Crash?

Post by armchair_pundit » Mon Mar 09, 2020 6:12 am

It isn't just the US, Sertorio.

Most likely a lot of shale operations will be suspended, those in debt will be bled by their creditors/investors.

The world will benefit from the price collapse, until the price rises again, and shale will be back in production, maybe new players, maybe renamed players, maybe a lot of the same...


Peak Oil, are we there yet? at $20bbl?

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Milo
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Re: Crash?

Post by Milo » Mon Mar 09, 2020 1:55 pm

Lots of companies are vulnerable, Ford is notable.

Forget the Dow: Coronavirus Could Send Ford Stock to Zero

Ford Motor Company is in the middle of a massive restructuring. And China is the key to the automaker’s transformation.
The coronavirus has sent Chinese auto sales into freefall, and the United States could be on the verge of recession.
With deteriorating margins and massive debt, the legendary American automaker is running on fumes. It may not make it to the finish line.
In North America, wholesale unit sales fell 8% from 738,000 to 681,000. Revenue fell 2% from $25.9 billion to $25.3 billion.
In Europe, wholesale units fell 4% from 361,000 to 346,000. Revenue fell 4% from $7.4 billion to $7.1 billion.
In China, Ford saw wholesale units decline 7% from 171,000 to 159,000. Revenue collapsed by a staggering 38% from $1.6 billion to $1 billion.
https://www.ccn.com/forget-the-dow-coro ... k-to-zero/

neverfail
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Re: Crash?

Post by neverfail » Mon Mar 09, 2020 2:50 pm

It is not just US shale oil that will need to be mothballed at current world price:
The project can break even with U.S. crude prices of at least $53 a barrel, meaning right now Athabasca keeps losing money on Hangingstone production. Size is crucial in the oil sands; the more bitumen a company can squeeze out of a plant, the lower fixed costs per barrel will be.

https://www.reuters.com/article/us-cana ... SKBN1CN0FD
Canada's tar sands oil is important to the US to make up for shortfalls in domestic oil production but is just as important to Canada as it's biggest single source of export income.

It goes without saying, however, that with North America knocked out of oil production by non-profitability this region, even in recession, will be turned into a big importer of crude; thus ensuring a big future rise in the global price before resumed domestic production kicks in to moderate the global price.

Meantime, enjoy the cheap petrol even as you endure the rising unemployment.

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Milo
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Re: Crash?

Post by Milo » Mon Mar 09, 2020 6:49 pm

Is it time for me to coin the phrase “Trump slump”?

neverfail
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Re: Playing Russian roulette with Saudi Arabia?

Post by neverfail » Mon Mar 09, 2020 6:56 pm

Russia Can Live With $25 Oil For Years

After oil prices collapsed in the worst drop in nearly three decades—courtesy of the renewed Saudi-Russia rivalry on the oil market – Russia’s Finance Ministry said on Monday that Moscow had enough resources to cover budget shortfalls amid oil prices at $25-30 a barrel for six to ten years.
The price of the Russian export grade Urals dropped to below $42.40 a barrel on Monday as oil prices tumbled by 30 percent after Saudi Arabia launched an all-out price war with Russia following the collapse of the OPEC+ group with the ‘no deal’ outcome of talks on Friday.
The $42.40 Urals price is the price at which Russia’s budget is balanced, the Russian Finance Ministry said on Monday, noting that the country’s sovereign wealth fund, the National Wealth Fund (NWF), had as of March 1 liquid assets worth US$150.1 billion, or 9.2 percent of Russia’s gross domestic product (GDP).

Those assets are enough to compensate for lower oil revenues due to the drop in oil prices, the finance ministry said. Even if oil prices were to stay at $25-30 for a long period of time, the NWF has enough liquidity to maintain the macroeconomic and financial stability of Russia’s economy, the finance ministry says.
The liquidity at NWF is enough to compensate for oil prices at $25-30 for six to ten years, it added.

https://oilprice.com/Latest-Energy-News ... woP_5gD8aA
By contrast:
Saudi Arabia, whose economy depends largely on crude exports, needs oil prices in the region of around $80-$85 per barrel to balance its budget. Russia, however, requires oil prices to be around $42-$45 per barrel.

https://www.aa.com.tr/en/economy/oil-pr ... le/1759685
It seems that the Russians are trying to force the Saudis :lol: over a barrel.

neverfail
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Re: Crash?

Post by neverfail » Mon Mar 09, 2020 6:57 pm

Milo wrote:
Mon Mar 09, 2020 6:49 pm
Is it time for me to coin the phrase “Trump slump”?
Why not? He is bound to attract the blame.

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Doc
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Re: Crash?

Post by Doc » Mon Mar 09, 2020 8:07 pm

Milo wrote:
Mon Mar 09, 2020 6:49 pm
Is it time for me to coin the phrase “Trump slump”?
More like "CCP collective rump slump".
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

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Doc
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Re: Crash?

Post by Doc » Mon Mar 09, 2020 8:19 pm

$20 barrel oil? Time to take a road trip !!! No need to take those Coronavirus infested airplanes !!!

I have literally been waiting 50 years to see this. Maybe I will stow away and get off this god forsaken planet for good

https://www.spacex.com/starship
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

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