Agree. There is a decent story for 75 wti. However, Capex will fill gaps sooner than later.

This opinion has probably already been stated someone in this long thread, but to me, stabilizing prices in the $60-80 range is a win-win for everyone. Producers, midstream, economy, etc. Not sure about refiners.

I work for a major midstream company and I know our internal target a 2 years ago was $55. A lot has changed in the past 2 years, but that was the number we needed to start making good $ again.

Refiners are pretty agnostic to the absolute price, it's mostly about the diffs, cracks, and marketing margins. Most of them, especially the ones integrated through to retail fuel marketing, made money hand over fist while crude was on the way down.

That said, elasticity is real and a lot of people believe that demand suppression starts to kick in around 70-80. Refiners will be the first to feel that as product inventories build and tighten the cracks, although that eventually works its way upstream.

Yesterday was a taste of reality IMO- $70 oil is now up to Saudi and Russia. Opening the spigot will push prices down quickly. Saudi can no longer send oil to $100 but they can send it lower (of course they could send it to $100 by shutting in a chunk of production but they can't afford to do that if you believe the pundits)

DRE06 said:

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This opinion has probably already been stated someone in this long thread, but to me, stabilizing prices in the $60-80 range is a win-win for everyone. Producers, midstream, economy, etc. Not sure about refiners.

I work for a major midstream company and I know our internal target a 2 years ago was $55. A lot has changed in the past 2 years, but that was the number we needed to start making good $ again.

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This. $100+ oil is only good for the producers and the shareholder class, so a very small percentage of people.

Those of us with stock grants in oil companies would love $100 oil. Daddy needs a new patio.

Lol. Okay. Anything over $80 and people go full ******

$100 seemed bad for the industry as well. Loss of cost discipline and more capital available than competent people to manage and execute projects. It also caused a production glut that lead to the crash in prices. Consistent $60-80 oil seems like the sweet spot but it's been a boom/bust industry and I'm sure history will continue to repeat itself. The boom will come.

I'm not going to delve too much into my profession. However, I was part of leveraged financing transactions in 2014 that were sold to institutional investors based off of insnase projections and prices

Somehow this thread fell off my watchlist so I'm really only replying for that. However after getting laid off in 2/16 hired in 3/17 I'm still going strong at my new place so there's that at least. Hope everyone else is still doing good out there too.

I like to think that we've got another 15-20 years before the industry overextends itself again. Not to say that oil couldn't crash for purely economic reasons, but right now every exec knows the consequences of overspending at the wrong time.

Congrats, that's a long time off. Did you end up doing what you did? Same seniority? I think my number is about to be called at my current employer. We are still reducing due to a buyout by a foreign entity and not being able to operate in the Gulf of Mexico. I'm struggling with the thought of moving companies but I know deep down they wouldn't hesitate if it improved the appearance of headcount. I've been looking and even though it is better than a few years ago it is still slim pickings. We'll see what happens from here.

Looking for work over a year is a great example for the rest of us. Way to go.

Southside AG said:

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Congrats, that's a long time off. Did you end up doing what you did? Same seniority? I think my number is about to be called at my current employer. We are still reducing due to a buyout by a foreign entity and not being able to operate in the Gulf of Mexico. I'm struggling with the thought of moving companies but I know deep down they wouldn't hesitate if it improved the appearance of headcount. I've been looking and even though it is better than a few years ago it is still slim pickings. We'll see what happens from here.

Looking for work over a year is a great example for the rest of us. Way to go.

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Yeah same position basically with a different service company. Better pay and I'm liking the corporate culture here better than Big Red. Good luck to you, hoping it works out for the best on your end Southside.

SLB?

"Big Red"...
just curious. Back in the 60 and 70's that was our name for Cameron Iron Works. One of the premier manufacturers in the biddness. People fought to work for those guys . Mostly gone or merged , renamed , and mongrelized into oblivion.
Who are y'all called Big Red today ?

All of HALs equipment is painted red... hence big red

The Original AG 76 said:

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"Big Red"...
just curious. Back in the 60 and 70's that was our name for Cameron Iron Works. One of the premier manufacturers in the biddness. People fought to work for those guys . Mostly gone or merged , renamed , and mongrelized into oblivion.
Who are y'all called Big Red today ?

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I believe Big Red is Halliburton

The Original AG 76 said:

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"Big Red"...
just curious. Back in the 60 and 70's that was our name for Cameron Iron Works. One of the premier manufacturers in the biddness. People fought to work for those guys . Mostly gone or merged , renamed , and mongrelized into oblivion.
Who are y'all called Big Red today ?

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Yeah I'm referring to Halliburton when I say Big Red. I'm with Newpark now though.

Quote:

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Yesterday was a taste of reality IMO- $70 oil is now up to Saudi and Russia

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Lol no it's not. We've been hitting record-setting demand despite an unusually long and snowy winter and higher gas prices. Now the driving season has officially begun and we're going to see even more demand. The global stockpile surplus has been wiped out, Venezuela is in catastrophically bad shape and the Iran sanctions are being reimposed, and pretty much the only two OPEC agreement countries with spare capacity are Saudi Arabia and Russia. Those two countries are just trying to claim the production allocated to Venezuela and Iran before American E&Ps fill the gap.

The global crude market is tight and the Saudis are trying to keep it from getting drastically tighter. They aren't trying to undercut the US and drive prices down because they already fought that battle and they lost it badly.

Lots of brand new bass boats and trucks at the lake this weekend. We had never seen it so crowded bc normally its fairly remote. It then dawned on me it was the Midland oil crowd from keeping up with this thread. Mr. Diesel didnt think that was it until everyone we spoke to was from Midland .

Beckdiesel03 said:

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Lots of brand new bass boats and trucks at the lake this weekend. We had never seen it so crowded bc normally its fairly remote. It then dawned on me it was the Midland oil crowd from keeping up with this thread. Mr. Diesel didnt think that was it until everyone we spoke to was from Midland .

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You at lake Brownwood?

Amistad.

COTC

I know I'm a bit late to the party and had to catch up to reading, but I felt affirmed after a recent conference I was at. This announcement was made while I was at the AIChE conference in Orlando.

The future growth for oil demand will be chemicals. Several industry people, those that have been in for 30+ years, plus C-suite people, essentially reading the tea leaves saying that oil demand will come from chemicals and the related products. Saudi is finally trying to get in on the growth with their announcement for a refinery that is mostly geared towards chemical, not fuel, production.

Some estimates for that job, which I think is 300-500 bpd, is about $20-$30 billion. Not sure if that is just the on-shore portion or if that includes both on-shore and off-shore.

Some thoughts from the conference were independent refiners looking to integrate the chemicals aspect if they do not have one already. With a perceived lack of (future) demand for liquid fuels, gotta have some place for the liquids to go. Remote refiners (like in Montana or Utah) should be fine, but if you operate in the USGC and don't have an outlet for liquid fuels, you could have issues in a few years with reduced demand (or overall flat demand).

There were some interesting takes on how projects will proceed. One interesting bit was that the US overall has the 2nd most current project CAPEX; Asia is the most. Of which 65% is the USGC (95% of that TX and LA) and 87% of that is petrochemicals and LNG/gas processing.

I think the bigger issue for liquid fuels and inflation will be diesel, not gasoline. At least this time (as compared to 2003-2006), we aren't burning 2 MM+ bpd of diesel, running around the mideast. Some of that can stay in the states for 18-wheelers....


~egon

Nice article on the current state of the industry:
https://www.wsj.com/articles/the-new-tech-that-terrifies-opec-1527845401?tesla=y&mod=article_inline

Interesting

Interesting

Did we ever reset the "Oil-Price is Right" guesses? I can't recall....

Fuzzy Dunlop said:

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$64.66

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Winner for Q1

On 3/30 it ws 64.87

See page 446

So what will WTI be on 30 June?


My guess - stagnation: $66.42

SpreadsheetAg said:

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So what will WTI be on 30 June?


My guess - stagnation: $66.42

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Depends on what OPEC does. One day the reports come out and say that nothing will be done, the next is that OPEC/Russia will increase supply. Just last week and now today, the story changed 3 times, seriously. That alone moved the arrow up/down.

SpreadsheetAg said:

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Fuzzy Dunlop said:

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$64.66

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Winner for Q1

On 3/30 it ws 64.87

See page 446

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Nice! You know what they say about blind hogs and acorns.

Fuzzy Dunlop said:

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SpreadsheetAg said:

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Fuzzy Dunlop said:

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$64.66

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Winner for Q1

On 3/30 it ws 64.87

See page 446

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Nice! You know what they say about blind hogs and acorns.

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They put a lot of nuts in their mouth?

Interesting.

Brent crude nears one-month low after report US asked OPEC to raise supply

https://www.cnbc.com/2018/06/04/oil-climbs-but-record-us-crude-output-and-higher-opec-supplies-drag.html