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

[saaby93]

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?

[gibbon]

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?

Sorry what? Do you mean should OPEC reduce supply?

Its a political play against Russia by the west. So no, they wont.

[Ayahuasca]

gibbon said:

Sorry what? Do you mean should OPEC reduce supply?

Its a political play against Russia by the west. So no, they wont.

Don't you mean, it's an economic play against US shale oil producers?

[Dan_1981]

How do you invest in oil?

Surely the price is going back up at some point?

[saaby93]

gibbon said:

Sorry what? Do you mean should OPEC reduce supply?

Its a political play against Russia by the west. So no, they wont.

No I meant should the UK stop selling its meagre oil reserves until the price picks up again.

The other oil producers should be able to fill the gap

[BoRED S2upid]

Is it that simple? Turn off the taps, go home for 6 months maybe a year or two then go back and start pumping again? I doubt it very much.

[TwigtheWonderkid]

BoRED S2upid said:

Is it that simple? Turn off the taps, go home for 6 months maybe a year or two then go back and start pumping again? I doubt it very much.

I doubt it too. For a start, you have hundreds of employed people under contract. They will still need paying.

I know nothing about oil platforms but would guess they need ongoing maintenance.

[onyx39]

I am sure that there will become a point if the price does stay this low that producers will consider mothballing infrastructure if its not viable to carrying on pumping though.

[saaby93]

TwigtheWonderkid said:

I doubt it too. For a start, you have hundreds of employed people under contract. They will still need paying.

I know nothing about oil platforms but would guess they need ongoing maintenance.

I guess the contracts could depend on there being work
In my mind I had the idea of a great big tap that could turn off the oil until the price rose again

[XJ Flyer]

onyx39 said:

I am sure that there will become a point if the price does stay this low that producers will consider mothballing infrastructure if its not viable to carrying on pumping though.

There's a difference between the cost of developing and drilling for new reserves as opposed to just flogging what is already there and coming out of the ground.Which is obviously profitable enough when the costs of extraction and exploration etc have already long ago been covered and paid back.What is needed is a large taxation cut on road fuel to match the fall in oil price to get the economy moving and in which extra sales compensate for the lower unit price.The fact is we aren't running out of the stuff any time soon and it is time to stop looking at oil as a precious mineral and more as just another form of cheap fuel which it was always meant to be.Which then just leaves the question of dealing with the global warmist religion by putting it in its place.

[XJ Flyer]

saaby93 said:

In my mind I had the idea of a great big tap that could turn off the oil until the price rose again

Which shows the stupidity in British thinking v American.The idea of putting more supply into the market is to try to get back as near as possible to where we were before 1973 in real terms regarding the cost of fuel.Then the British want to screw all that up by doing the same thing as the Arabs did in 1973 thereby crashing the western economies.

[Ayahuasca]

Low oil prices could shaft the economy. The issue is that the banks (bless them) have lent such vast sums to oil producers, that if the oil producers don't make enough profit to pay them back, the banks could fail (again) and need baling out (again).

[BlackLabel]

Dan_1981 said:

How do you invest in oil?

Surely the price is going back up at some point?

A few years old but the principles remain the same.

http://www.telegraph.co.uk/finance/personalfinance...

[Ilikebeaver]

Dad works on the rigs. It's likely that this trip will be his last from his current contract. (Not a bad thing IMO)

Rig will get shut down and will end up getting recommissioned when price of oil increases again

[Justayellowbadge]

Ilikebeaver said:

Dad works on the rigs. It's likely that this trip will be his last from his current contract. (Not a bad thing IMO)

Rig will get shut down and will end up getting recommissioned when price of oil increases again

I did some work for O&G in Aberdeen a few years ago, very much backroom, and over the course of a few years the project changed from decommissioning a couple of rigs, to maintaining to refurbing, as the price of crude changed.

For big firms their thinking can be surprisingly flexible. Guess they are accustomed to volatility.

[Guybrush]

Good news about the price though; I'm sure the windmill huggers are sweating.

[Jimbeaux]

TwigtheWonderkid said:

BoRED S2upid said:

Is it that simple? Turn off the taps, go home for 6 months maybe a year or two then go back and start pumping again? I doubt it very much.

I doubt it too. For a start, you have hundreds of employed people under contract. They will still need paying.

I know nothing about oil platforms but would guess they need ongoing maintenance.

Oil platforms once shut down will be moved. They are individually owned rigs that move to where a paying customer sends them; and moving then ain't quick. Therefore, once shut down, it is not easy to just start back up because it is very likely there will be no platform to re-start. Oil sands / fracking is a bit different in setup. Those sites are more able to be started and stopped as needed without much shuffling of infrastructure. Being an "oil state", we grow up learning about such things.

[JungleJim]

Ilikebeaver said:

Dad works on the rigs. It's likely that this trip will be his last from his current contract. (Not a bad thing IMO)

Rig will get shut down and will end up getting recommissioned when price of oil increases again

Which field/platform?

[Some Gump]

XJ Flyer said:

There's a difference between the cost of developing and drilling for new reserves as opposed to just flogging what is already there and coming out of the ground.Which is obviously profitable enough when the costs of extraction and exploration etc have already long ago been covered and paid back.What is needed is a large taxation cut on road fuel to match the fall in oil price to get the economy moving and in which extra sales compensate for the lower unit price.The fact is we aren't running out of the stuff any time soon and it is time to stop looking at oil as a precious mineral and more as just another form of cheap fuel which it was always meant to be.Which then just leaves the question of dealing with the global warmist religion by putting it in its place.

XJ, comments on punctuation aside - that is even more bks than your "contributions" to the Le Mans forum.

[XJ Flyer]

Some Gump said:

XJ Flyer said:

There's a difference between the cost of developing and drilling for new reserves as opposed to just flogging what is already there and coming out of the ground.Which is obviously profitable enough when the costs of extraction and exploration etc have already long ago been covered and paid back.What is needed is a large taxation cut on road fuel to match the fall in oil price to get the economy moving and in which extra sales compensate for the lower unit price.The fact is we aren't running out of the stuff any time soon and it is time to stop looking at oil as a precious mineral and more as just another form of cheap fuel which it was always meant to be.Which then just leaves the question of dealing with the global warmist religion by putting it in its place.

XJ, comments on punctuation aside - that is even more bks than your "contributions" to the Le Mans forum.

I'd imagine those who'd prefer to leave the stuff in the ground rather than use it and the green/global warmist cause at least would say that.Meanwhile the fact that the oil suppliers seem happy enough to keep putting oil on the market at lower ( hopefully reducing ) prices from existing sources,while cutting back on 'new' extraction projects,suggests that I'm not a million miles off the truth.

Edited by XJ Flyer on Tuesday 16th December 21:50