Posted on 04/21/2015 3:17:19 PM PDT by bananaman22
When oil prices recover—and plenty of analysts think the climb back up will start soon—Canada’s western frontier of Saskatchewan and neighboring Alberta will ‘still have the edge’, according to a report from TD Economics.
Depressed oil prices may have skewed the view from Canada’s oil-producing west, but this will be one of the better places to bet on the oil rebound.
Saskatchewan remains the last highly accessible onshore North American oil frontier and it is home to part of the prolific Williston Basin.
And as the industry gears up for the Williston Basin Petroleum Conference (WBPC) on 28 April, the message is clear: Saskatchewan is still alive and kicking.
Those companies who overleveraged themselves based on $90-$100 oil may be in trouble, but those who prepared for the possibility of an oil price downturn, and those who have made acquisitions on this downturn are poised for bigger long-term gains.
(Excerpt) Read more at oilprice.com ...
What does “recover” mean? Reach ridiculous prices based on the greed of 100 traders on the commodities exchange and some powerful countries and people.
Good article.
“What does “recover” mean? Reach ridiculous prices based on the greed of 100 traders on the commodities exchange and some powerful countries and people.”
Traders and speculators reduce the price of oil by removing the producer’s risk. Let’s say you’re an oil speculator. Assume the price today is $60 per barrel. You decide that the price in January will be $100 per barrel. You offer to buy 100,000 barrels at $65 per barrel for delivery in January. The driller now has a guaranteed price of $65 in January so he can arrange financing and other deals based on this guarantee.
Now, two things can happen. Come January the price has gone up or down from the $65 you agreed to pay. If it went up you sell oil that did not exist for sale prior to January at the higher price and pocket the profit. Or, you sell your oil at less than $65 and accept the loss.
At no point did your speculation affect the price. The price is set by market conditions.
Now, Saudi Arabia, which has the world’s lowest cost of production, has set the market price as low as possible. This was to force Russia to abandon its support of Syria and to hurt Iran (which has a much higher cost of production) for their support of Syria. Saudi Arabia is doing this so they can eventually build a pipeline through Syria to the Mediterranean. This will hamper Iran’s efforts to affect SA’s production once Iran becomes a nuclear power. At which point Iran will be able to close off SA’s access to the sea lanes with impunity.
“What does “recover” mean?”
Being sold over the cost of production comes to mind.
There is a glut, but it is only 1% and there was a massive slow down in drilling.
There will be a massive uptick as the glut subsides.
I’ve traded futures and stand corrected. It is a hedge and a way to make a lot of money with options on major swings, although the safe money is writing puts and calls.
You point about the Saudis is also well taken
I wss on the floor during the Gulf War!!!! The swings were incredible!! millions made and lost in a single hour by the big players.
really? wow. How did it happen so quickly? I thought we were drowning I oil? Thank goodness that goofy gas tax didn’t happen because “prices were so low”
“What does “recover” mean? Reach ridiculous prices based on the greed of 100 traders on the commodities exchange and some powerful countries and people.”
When the prices gets up to where we can drill and complete and still make a profit. Many are still drilling but are waiting on completions.
If all it takes is “greed” the price would never have gone down.
Supply up, price down.
As a result a lot of drilling rigs have shut down due to non-profitability. How long do you keep working when you aren’t getting paid anymore?
The rig shutdowns will eventually lower the supply, leading to higher prices. This has happened in the energy industry and every industry throughout history.
It’s called supply and demand. They used to teach how it works in schools, but not anymore. Now they call building wealth “greed” and achievement “privilege.
By “they” I mean socialists. You’ve been well educ....I mean indoctrinated.
Yeah, I’ve been schooled on my rush to judgment response and deservedly so. I should have known better having worked on the exchange. Got caught up in a populist moment plus fell in love with 2.07 gas!!
No. Read my five responses to get slaughtered lol. I rushed to judgment in a moment of populist rage and the love of 2 buck gas. I will sin no more!!
I question your claim of trading futures, especially as a floor trader.
You’re relatively new here and you may not understand that “Populist rage” doesn’t go very far among the more seasoned.
NYMEX echange. Futures/options/puts/calls/spreads/strangles/straddles, I apologized im not going to beg.
and don’t ASSUME thngs. I was on the floor as a COMPLIANE ANALYST.
Traded through Lind Waldock on my own
Good for you, all is forgiven. Nothing wrong with appreciating a temporary great deal. I’m on a road trip right now enjoying the low prices myself.
thanks!! I’m going through the inquisition right now on this board :) I just liked the 2 buck gas is all!!!
Enjoy your trip!!!
and don’t ASSUME thngs. I was on the floor as a COMPLIANE ANALYST.
That’s easy for you to say.
That’s cool dude.
Relax.
I must admit that your use of certain words (workers), never mind the misspellings, and your first post lead me to think you are both really young and have no idea how or why we have markets to begin with.
Best of luck
I don’t think there will be a strong recovery. Saudi Arabia needs low prices now, in order to discourage increasing efforts to use renewables and fuel economy.
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