AngryAg is correct. Government employment has decreased under Obama. This chart is based on data taken from the BLS website:



Here's an official report employment and job growth by sector for those interested: http://www.bls.gov/web/empsit/ceshighlights.pdf

51s on oil, new low

Never let facts get in the way of a good rant.

Well, off to a rough start to 2015 boys.

How so?

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How so?

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http://www.bloomberg.com/news/2015-01-05/brent-oil-falls-below-55-a-barrel-for-first-time-in-5-1-2-years.html

WTI might get into the $40's by market close today.

Q2 is going to be interesting.

Production in the Permian Basin got hammered last week. Lots of power outages due to ice storms and downed power lines (most pumping units run on electricity). Plains shut their trucks down for 3 days (biggest oil purchaser in the Permian Basin) which caused many wells to be shut in to keep storage tanks from running over. Lots of salt water disposals were down for power, then frozen up once power was restored. This caused many other wells to be shut in because of inability to store produced water.

How long does it take for production to make it to the inventory reports? I wouldn't think more than a few weeks. I'm going to buy some slightly out of the money calls and bet on an "unexpected" draw in inventories.

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Production in the Permian Basin got hammered last week. Lots of power outages due to ice storms and downed power lines (most pumping units run on electricity). Plains shut their trucks down for 3 days (biggest oil purchaser in the Permian Basin) which caused many wells to be shut in to keep storage tanks from running over. Lots of salt water disposals were down for power, then frozen up once power was restored. This caused many other wells to be shut in because of inability to store produced water.

How long does it take for production to make it to the inventory reports? I wouldn't think more than a few weeks. I'm going to buy some slightly out of the money calls and bet on an "unexpected" draw in inventories.

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This also happened last year in a big way. You may be able to see some trends from then. Ice storm was late November IIRC.

I just talked to my commodities broker. He said it takes production about 1 week to hit inventory and inventory reports run 1 week behind, so 2 weeks total. He said traders expect a big draw for the last week of the year anyway as purchasers have to pay taxes on end of year inventory. He said lots of barrels magically disappear that week and work their way back in over the next couple of weeks. We figured Permian Basin production may have been down ~3 million barrels last week, which isn't hugely significant in the scheme of purchasers hiding barrels last week anyway for tax purposes. Any other time, a 3 million bbl draw would move the market a few dollars, but traders don't trust inventory reports at the beginning of the year. If we get a selloff today, I'll probably still buy some near the money March calls.

Oil stocks getting hit. There was no way they could all bounce 10-20% from lows while oil makes lower lows.

Glad I sold my feb puts for uso Friday afternoon...

i got in at $20....that's going to be a good stock in about two years

WTI <$50

http://www.bloomberg.com/video/energy-jpmorgan-s-feroli-on-oil-prices-texas-economy-RZHmYpzmRlaEI5GfhEtyYg.html

well piss

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http://www.bloomberg.com/video/energy-jpmorgan-s-feroli-on-oil-prices-texas-economy-RZHmYpzmRlaEI5GfhEtyYg.html

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Essentially, it's too late to do anything except grab some lube and hold on tight.

Granted, JP Morgan also said this in July:

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The U.S. oil boom is showing some signs of fatigue, which could mean higher prices in the coming years, according to J.P. Morgan Chase & Co.

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The bank upgraded its 2015 forecast for U.S. oil prices to $108 a barrel, from $85 a barrel previously. Lower oil exports from Iraq are likely to contribute to higher prices as well.

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Texas has been spending a lot. Time to see which politicians have balls to make cuts when we're not making as much.

That is going to present a problem as we already have so many uninsured and our education system is plunging to Mississipi and Louisiana levels. If the Texas economy stumbles, a lot fewer people will be able to afford private schools.

A near term issue is going to be Abbott taking the federal money to expand Medicaid coverage in Texas. So many rural hospitals are in danger of going under and economic pressures are only getting worse.

By Reuters 05 January 2015 17:25 GMT

The sell-off in global oil markets showed little signs of slowing in the new year with US crude breaking below $50 a barrel for the first time since April 2009 on fears of a supply glut.

Benchmark Brent crude tumbled about 6%, hitting new 5-1/2 year lows after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports at near 35-year peaks, Reuters reported.

US independent ConocoPhillips added to the bearish sentiment somewhat after announcing first oil at the Eldfisk 2 platform off Norway in the North Sea.

The euro's tumble to 2006 lows and slower-than-expected growth in US manufacturing, meanwhile, weakened prospects for the global economy.

"There's no doubt that we have a combination of supplies hitting their zenith at a time when demand is weakening," said Phil Flynn, analyst at Price Futures Group in Chicago.

US crude's front-month contract was down $2.46, or 5%, at $50.23 a barrel at 11:48 a.m. in New York, having fallen to $49.95 earlier.

Front-month Brent hovered at $53 a barrel, down more than $3, after dropping to $52.66, its lowest since May 2009.

Some traders appeared certain that US crude will hit the $40 region later in the week if weekly oil inventory numbers for the US on Wednesday show another supply build, Reuters reported.

"We're headed for a four-handle," said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York. "Maybe not today, but I'm sure when you get the inventory numbers that come out this week, we definitely will."

Open interest for $40-$50 strike puts in US crude have risen several fold since the start of December, while $20-$30 puts for June 2015 have traded, said Stephen Schork, editor of Pennsylvania-based The Schork Report.

Russia's oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day, up 0.7% thanks to small non-state producers, Energy Ministry data showed.

Iraq's oil exports were at their highest since 1980 in December, an oil ministry spokesman said, with record sales from the country's southern terminals.

The Russian and Iraqi data overshadowed reports of drops in Libya's oil output due to conflict. Libya's oil output has fallen to around 380,000 bpd after the closure of the Opec producer's biggest oil port Es Sider, along with another oil port Ras Lanuf.

I think ag2012 has a very good point. Just a short while ago they were predicting $108 for 2015. The fact is, these analyst have no idea and a lot of this feels like market manipulation.

Here is a better article in my opinion on where we are headed. "Oil Crisis in 2016"

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The last extended period of low oil prices was 1985 to 1990. In 1985, when oil prices collapsed similar to what's happening now, the world had 13 million bpd of spare capacity, with 7 million bpd in Saudi Arabia alone. OPEC was well-positioned to comfortably meet any increase in demand.

Today, just about all of the world's discretionary spare capacity resides in Saudi Arabia and amounts to an estimate 2 million bpd. Lou Powers, an EPG member and author of "The World Energy Dilemma," has said that Saudi Arabia will have difficulty maintaining production at over 10 million bpd for an extended period. If we do swing to a supply shortage, Saudi Arabia may find itself in the position of needing to run the taps full out for much of 2016. In such an event, the world will be headed right back into an oil shock and we will see much higher oil prices than $100/bbl.

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http://oilprice.com/Energy/Crude-Oil/Energy-Crisis-As-Early-As-2016.html

Total nightmare.

Luke Johnson 05 January 2015 18:38 GMT

The number of rigs drilling in the US continued to plummet, losing 29 for a total of 1811 in Baker Hughes' first tally of 2015.

Although the total number rigs was still 140 higher than the start of 2014, the steep decline to open the new year continues a sharply downward trend seen in recent weeks as operators drop rigs in a scramble to reduce exploration costs amid sinking oil prices.

US crude dipped below $50 on Monday for the first time since April 2009 and Brent crude was heading in the same direction, trading below $54. The Baker Hughes rig count has fallen by 93 in the past four weeks.

In the first tally of 2015, oil-directed rigs fell by 17 for a total of 1482 and gas rigs shed 12 for a total of 328. Oil rigs are still up in the past 12 months, by 104, while gas rigs are down by 44 over that time.
No states and no individual basin gained any rigs, according to Baker Hughes, with each region either flat or down for the week.

Texas took the biggest hit this week, losing 12 units for a total of 840. Texas oil plays such as the Eagle Ford and the Permian also led all basins in rig losses, shedding four and six rigs, respectively. The Eagle Ford now has 200 rigs drilling - 28 fewer than a year ago - and the Permian has 530, up 62 from a year ago.

California also lost a good chunk of rigs with six for a total of 22. That follows a 17-rig loss a week ago in California, where unconventional drilling is complex and returns are less guaranteed. The state is down 12 rigs from a year ago.

The Denver-Julesburg basin and the Cana Woodford were the only other multi-rig losers, shedding two and three rigs, respectively for respective totals of 58 and 45.
The Gulf of Mexico lost two rigs to total 54.

Canada lost 48 rigs for 208

Called it!

Called it!

Is Houston in total chaos? I have a business trip there soon and need to know what survival gear to bring.

Define "total chaos"

Houston is like New Orleans with Katrina 5 days out when the NOAA was predicting direct hit landfall, but everyone that should have known better waited until it was on top of them to evacuate.

I think the disconnect is that most people in the O&G sector thought and acted like things would never change, whereas most realized that was a statistical fallacy.

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Houston is like New Orleans with Katrina 5 days out when the NOAA was predicting direct hit landfall, but everyone that should have known better waited until it was on top of them to evacuate.

I think the disconnect is that most people in the O&G sector thought and acted like things would never change, whereas most realized that was a statistical fallacy.

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Big words.

The o&g industry is one of the hardest working industries. And we worked ourselves out of a job. For the moment. But it will be back.

I think we'll see a lot of "fat" getting trimmed soon. Hiring freezes are already being announced. Would be really really curious to see what type of presence recruiters will have at career days and job fairs over the next few months at your larger engineering schools. M&As will happen and more fat trimming. I see a lot of people in their early 20s-early 40s having their lifestyles reigned in significantly. I think real estate ITL will get pinched as well as areas near Energy Corridor.