Brent crude drops below $59 - should we stop selling it

[XJSJohn]

XJ Flyer said:

Willy Nilly said:

Good thing Scotland voted No, cheap oil would have buggered Alex's accounts up no end.

No he would have followed the advice here by shutting down all production and leaving it in the ground until the price doubles.

do you have any idea of the costs involved in shutting down and capping wellheads, and then the subsequent costs of re-mobilization and restoring said well ...



Anyway, Alex would have fked up his own accounts anyway, wouldn't have needed a drop in the price of oil

[TwoLeadFeet]

saaby93 said:

The price of Brent Crude drops below $59 per barrel
http://www.bbc.co.uk/news/business-30491801

It's a particularly fine oil. Should we stop selling it when the price is too low?

No. Once in production the costs to suspend and keep the platform in a usable condition would almost certainly far outweigh any gains from selling at a higher price.

This has some good background information http://www.oilandgasuk.co.uk/cmsfiles/modules/publ...

[BoRED S2upid]

If it's going to hit 90p a litre I'm buying a V8! Keep pumping I say as fast as you can.

[knitware]

I was reading this this morning:

http://www.bbc.co.uk/news/business-30525539

Why are investments and projects being stopped and why the job losses? Will the demand for oil not return and in greater volume? I don't understand? Does the world have a glut of oil with no end in the supply?

[neelyp]

Silverbullet767 said:

I'm one of the contractors affected. The mood here is as you would expect. Rumour is a further cut or a reduction in hours is in the pipeline. Morale is non existent. I'm hoping the BP contract we just won will soften the blow.

I finish up tomorrow, heading back to the wee engineering and design house I've been seconded from.
Fortunately they tend to operate more in the chemical and pharma sectors so I'm hopeful of enough work to keep me going.
My mate works in the Grangemouth refinery, he thinks they will be spending over the next few years but who knows??

[andymadmak]

knitware said:

I was reading this this morning:

http://www.bbc.co.uk/news/business-30525539

Why are investments and projects being stopped and why the job losses? Will the demand for oil not return and in greater volume? I don't understand? Does the world have a glut of oil with no end in the supply?

Its the price. All oil costs money to get out of the ground. Some of it is more expensive to extract than other. As the oil price rose it became financially viable to extract oil from "more expensive" wells. But equally, as the price falls, it can easily be the case that the cost of extraction is higher than the price you can sell it for. Certainly, with oil at around $60 per barrel there are lots of fields in production right now that are simply not economic - hence the title of this thread.
If you're in Saudi you can, in theory turn the taps down a bit, and tighten supply. This should nudge the price back up and is, after all, is what the middle east has been doing for years. However there is lots of oil about now, especially with the move to shale oil and shale gas in the USA. And much of it is very very cheap. Fling in the fact that many petro economies (including Russia) simply cannot afford to turn the taps down because they need those petro dollars NOW!!!!! and you have perfect conditions for prices to fall. A global economy still stubbornly refusing to grow, (especially in Eurozone) , greater energy efficiency and even those pesky renewables add the icing on the pricing cake.
I think it will be some time before oil climbs back into 3 figures. And until then, opening up new fields, especially expensive hard to reach ones in places like the North Sea are going to stay uninvested.

[saaby93]

Its edging back up again
http://www.bbc.co.uk/news/business/market_data/com...

[Art0ir]

saaby93 said:

Its edging back up again
http://www.bbc.co.uk/news/business/market_data/com...

Pretty meaningless when you look at the 3 or even 6 month charts.

[XJ Flyer]

XJSJohn said:

XJ Flyer said:

Willy Nilly said:

Good thing Scotland voted No, cheap oil would have buggered Alex's accounts up no end.

No he would have followed the advice here by shutting down all production and leaving it in the ground until the price doubles.

do you have any idea of the costs involved in shutting down and capping wellheads, and then the subsequent costs of re-mobilization and restoring said well ...

Absolutely in addition to the lost tax revenue which is why I'm saying cut the tax in line with the price reduction.Demand increases supply increases to meet demand,inflation drops or reverses,the economy grows like a Saturn 5 on launch,less tax needed while net oil revenues and tax revenues increase,what's not to like.Or we take the the OP's advive and all those who disagree with me more than likely based on the usual eco agenda of the Green trolls who are getting worried that their plans to rid the world of fossil fuel use will go off the rails in a pre 1973 oil price environment.

[McWigglebum4th]

XJSJohn said:

XJ Flyer said:

Willy Nilly said:

Good thing Scotland voted No, cheap oil would have buggered Alex's accounts up no end.

No he would have followed the advice here by shutting down all production and leaving it in the ground until the price doubles.

do you have any idea of the costs involved in shutting down and capping wellheads, and then the subsequent costs of re-mobilization and restoring said well ...



Anyway, Alex would have fked up his own accounts anyway, wouldn't have needed a drop in the price of oil

No they would of sold the oil at $300 a barrel and anyone who didn't buy it that were price were english scum who were oppressing scotland...............again

[hidetheelephants]

neelyp said:

I finish up tomorrow, heading back to the wee engineering and design house I've been seconded from.
Fortunately they tend to operate more in the chemical and pharma sectors so I'm hopeful of enough work to keep me going.
My mate works in the Grangemouth refinery, he thinks they will be spending over the next few years but who knows??

Ineos will no doubt be pleased that their raw materials are becoming cheaper and their energy costs lower so I imagine there will be positive effects there, not negative. The markets for Grangemouth's products will also benefit from cheaper oil, stimulating demand.

[westtra]

Silverbullet767 said:

Where are you seeing this? The e-mail I received from WG Corporate was up to 10%.

The people I have been sitting next to in the PSN office in dyce for the last week and a bit.

[Dalmahoy]

This is the 2nd - 10% pay cut from Wood Group in 6 months.

[neelyp]

hidetheelephants said:

neelyp said:

I finish up tomorrow, heading back to the wee engineering and design house I've been seconded from.
Fortunately they tend to operate more in the chemical and pharma sectors so I'm hopeful of enough work to keep me going.
My mate works in the Grangemouth refinery, he thinks they will be spending over the next few years but who knows??

Ineos will no doubt be pleased that their raw materials are becoming cheaper and their energy costs lower so I imagine there will be positive effects there, not negative. The markets for Grangemouth's products will also benefit from cheaper oil, stimulating demand.

It's the BP punters at Kinneil that are worrying, they've spent money like it was going out of fashion over the past few years, think there will be big changes there.
Have heard some rumours about Ineos buying Kinneil terminal and the FPS, now would be the ideal time to do it.

[steveatesh]

My sons on a drilling rig in the North Sea, the rig has been given notice of closure, to happen in April.

He has no idea what happens after that