Posted on 03/13/2015 6:43:03 AM PDT by thackney
We keep waiting for the bust, the gigantic rollover of oil companies that just plain collapse under their own weight and the $50 price that you get for West Texas Intermediate.
It hasn't happened.
We keep waiting for the junk bond market that is riddled with $200 billion in oil and gas paper to be crushed by defaults and restructurings.
It hasn't been.
In fact, the iShares iBoxx $ High Yield Corporate Bd, the high-yield exchange-traded fund that includes a lot of this suspect paper, is pretty much unchanged for the last three years and has enjoyed a sustained rally since the bottom back when most of the major oil stocks hit lows, rallying from $86 to $91 before falling back to $90 where it is now.
Hardly catastrophic.
We keep seeing stories that indicate that this quarter represents the peak of production and that it is all downhill from here. Nope. I think the first quarter's going to show extraordinary growth, despite the reduced drilling, with oil from the Permian, the Eagle Ford, the Bakken, the Gulf of Mexico, Mexico itself and Canada, where new pipe has brought tons of crude to market, all vying for precious refinery space because of the export ban for our own crude that the federal government isn't about to abandon.
So why hasn't it happened? Why have we only seen Whiting Petroleum put itself up for sale, despite billions of dollars in loans and debt taken down by dozens of now stretched U.S. producers? And is Whiting only giving up, so to speak, because it made the last -- and dumbest -- buy, the purchase of Kodiak, a second rate Bakken producer, for $3.8 billion in stock plus an assumption of $2.2 billion in debt?
(Excerpt) Read more at msn.com ...
I think he greatly ignores the lag in production drops the follow months after the rig counts drops. And ignores the assets sales that have already happened.
I think he also forgot that our reserve capacity is practically 100% topped off. At that point oil will have to be dumped unto the market. I don’t think $30 a barrel is far off
CVX selling $15 bil for starters.
The dollar right now is the wild card. The Euro could dip to 0.90 or less. Each dip of the Euro is a drop in oil price in the last two weeks.
As noted, the spread to Brent for WTI is historical and indicates shortage there and excess here...and the dollar?
What is “interesting” is that how the price at the pump keeps going up.
Panic is the order of the day. They say it is always darkest before the dawn. I wonder it is midnight yet.
I keep waiting for the failure of multiple private equity investment firms; hasn’t happened either.
Suspicious, imho.
I’ve been waiting for the predictions of the utter collapse of our financial system since the 1970s, to happen ... :-) ...
Yes, that 'is' interesting. More so if you consider the causation for that this time around is entirely predictable.
It would have happened this time around if not for all the fingers in the federal cookie jar...
I heard that too about our reserve/storage being full. They also said the only reason the prices were going up was a fire or something at a refinery. That seems to happen every time there is drop in crude prices.
He ignores a lot of things. He’s only good at running his mouth.
I think this is kept going by some majors able to buy assets from smaller players deeper in debt.
Best investment those with solid finances can make today is leases with proved reserves but owned currently by those who don’t have the money to bring to production.
I think this is kept going by some majors able to buy assets from smaller players deeper in debt.
Best investment those with solid finances can make today is leases with proved reserves but owned currently by those who don’t have the money to bring to production.
I think there has been some speculation on the refinery strike having a bigger impact. But it looks like that may be over now.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.