Fuel up/down again

Loved watching the diesel go up faster than the cost!

But considering all my ex work colleagues work in oil and gas and are looking at massive redundancies in february i would rather pay a bit more to keep their jobs safe.
 
PhillyDee said:
But considering all my ex work colleagues work in oil and gas and are looking at massive redundancies in february i would rather pay a bit more to keep their jobs safe.
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Indeed, these low prices aren't going to last. The oversupply is in large part built on the massive recent investment paid for from >$100 oil and low interest rates. What we're seeing now are small oil/gas companies losing their shirts and the majors massively cutting back on exploration/production expenditure:
BP cuts 4000 jobs in face of falling oil prices ...and Petrobras will reduce investment by $32bn, 25%, over the next four years, its third cut in six months.

US Oil Rig Count Lowest Since 2010 As Drillers Step Up Cut

Oil Plunge Sparks Bankruptcy Concerns
 
I see we now have predictions oil could go as low as $10 per barrel then there is the potential of a scuffle between Saudi and Iran. Interesting times...
 
[TW]Fox;29049065 said:
Low oil price? Check.
clv101 returning to Motors from seemingly nowhere to doom-monger about peak oil? Check.

:D
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Lol, but his points are fairly valid. The oil price tends to react quite significantly to under/over supply even if supply and demand aren't that far apart. I wouldn't be surprised to see prices drop to near $20 a barrel, but it would significantly affect future production as fields are decommissioned and projects shelved.
 
[TW]Fox;29049065 said:
Low oil price? Check.
clv101 returning to Motors from seemingly nowhere to doom-monger about peak oil? Check.
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Nothing to do with peak oil, Wood Mackenzie just ran the numbers. Some $380bn of capital expenditure, which would have delivered a close to 3 million barrels per day has been deferred.

http://www.ft.com/cms/s/0/50bbaec2-ba0e-11e5-bf7e-8a339b6f2164.html#axzz3xEtcPcvu

Low oil prices are good for many, and good for (Western) economies in general. However, they have deprived the oil industry of hundred of billions of dollars in profits - that equates to far less drilling and infrastructure expenditure. Although the price of oil is low, the cost of developing new projects, brining new oil to market is anything but.
 
The real problem with oil prices is that demand is weak and hasn't grown as fast as supply. Pretty simple and don't really need anyone to tell us that.

We have limited oil reserves and they would have eventually run out with past trends (however far in the future you believe that to be).

What's happening now is that the high price caused everyone to produce loads of it to cash in on that price, supply soared. Now governments around the world are screwed as they have budgets to run and need to sell more of it to make up for budget shortfalls. Budgets which were made on higher oil prices.

Shale oil prevents OPEC from taking any action to restore revenues instead through price by squeezing the market. Russia won't necessarily coordinate action with OPEC either as they also have serious budget problems. The low price should squeeze the market partially (as in the above post) but governments do have very low lift costs.

https://en.wikipedia.org/wiki/List_of_countries_by_oil_production

The glut will reduce investment in alternative fuels, but technology will advance even without significant investment. It may make fossil fuel demand fall even further because of alternatives or more efficient use of it. In which case, if you hold massive reserves, fill your boots while it lasts.
 
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Am I the only one that is a little worried (well not worried worried) that too cheap oil will ruin the industry? For a normal commodity the price / demand would fluctuate and eventually settle but with oil, considering the entire western world relies on it, we can't really get away with peaks and troughs of supply/price?
 
almoststew1990 said:
Am I the only one that is a little worried (well not worried worried) that too cheap oil will ruin the industry? For a normal commodity the price / demand would fluctuate and eventually settle but with oil, considering the entire western world relies on it, we can't really get away with peaks and troughs of supply/price?
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It will always be volatile. Since so much of supply is dependent on long term projections of supply and demand, it will often end up being wrong. Only OPEC/Russia have any meaningful ability to squeeze or increase supply at will and they aren't this time. Largely because they are screwed with their national budgets.
 
[TW]Fox;29057741 said:
Like it ruined the industry throughout the 1990's and early part of the 2000's?
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There was another slump around 2009 / 2010. Albeit not as bad as the two you mentioned. The only real reason I know of it is because I was in the industry, and it was part of the reason I was laid off in early 2010.

Traditionally there has been a 5-10 cycle between boom and bust in the oil industry. It'll bounce back, but at least in the UKCS, it wont be the same as it was. There has been far deeper cuts than initially expected, and it's projected to get worse. Those that survive this time round wont have it so good going forward.
 
almoststew1990 said:
I was 10 or so back then so I wouldn't know- I've only ever known petrol over £1. Is it not a bit different now that this is a result of low demand AND high supply?
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Demand is higher now than it's ever been before as far as I'm aware, but demand growth is very low, so supply growth has greatly outpaced it, particularly as a result in the boom of shale oil in the US, which is easy to bring on production very quickly.
 
Despite the price of oil being so low prices in my 'manor' from Shell and the BP that I never use have stayed resolutely above £1 a litre @ 101.9p. Only the local Sainsburys has it for under a pound. Last week the price went UP by a penny for a few days!
 
MissChief said:
Despite the price of oil being so low prices in my 'manor' from Shell and the BP that I never use have stayed resolutely above £1 a litre @ 101.9p. Only the local Sainsburys has it for under a pound. Last week the price went UP by a penny for a few days!
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It takes a while for oil to get from the ground to a fuel station
 
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