Oil: how low can it go?

Author
Discussion

Pan Pan Pan

9,777 posts

110 months

Saturday 13th February 2016
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It looks like oil prices could be going back up again owing to production restrictions which may be applied by OPEC, along with mining (Gold prices it seems) which are apparently going to start going back up again
I wonder how long the oil companies will take to start increasing prices at the pumps? will take as long as it did for pump prices to fall I wonder? Sorry, that is a daft question.

emicen

8,558 posts

217 months

Sunday 14th February 2016
quotequote all
Pan Pan Pan said:
It looks like oil prices could be going back up again owing to production restrictions which may be applied by OPEC, along with mining (Gold prices it seems) which are apparently going to start going back up again
I wonder how long the oil companies will take to start increasing prices at the pumps? will take as long as it did for pump prices to fall I wonder? Sorry, that is a daft question.
Seeing as the "current" oil price is based on 3 month futures, any immediate price rises are profit margin moves by the retailers.


OzzyR1

5,694 posts

231 months

Sunday 14th February 2016
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emicen said:
Pan Pan Pan said:
It looks like oil prices could be going back up again owing to production restrictions which may be applied by OPEC, along with mining (Gold prices it seems) which are apparently going to start going back up again
I wonder how long the oil companies will take to start increasing prices at the pumps? will take as long as it did for pump prices to fall I wonder? Sorry, that is a daft question.
Seeing as the "current" oil price is based on 3 month futures, any immediate price rises are profit margin moves by the retailers.
I can categorically state that fuel prices will take a steep hike in the near future as I bought an older s/c 4.2 V8 yesterday hehe



RDMcG

19,093 posts

206 months

Monday 15th February 2016
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Well. Chinese stock market taking another hit, so will e interesting to see how oil fares tomorrow...........

NRS

22,079 posts

200 months

Monday 15th February 2016
quotequote all
RDMcG said:
Well. Chinese stock market taking another hit, so will e interesting to see how oil fares tomorrow...........
It was playing catch-up as it were, since it was closed (holiday) when there was some big drops over here in Europe and the US. The question is did it fall the "expected" amount or go down more, potentially pulling the other markets down with it today.

sooperscoop

408 posts

162 months

Monday 15th February 2016
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Here at the new construction end, we've never seen anything like it. None of the big three shipyards in Korea took a single order in January, unheard of, Seadrill are parking their new drillships until possibly 2019, redundancies and firings by the hundred, projects cancelled or being half completed then made watertight and layed up, brand new LNG carriers and container ships going into layup, and the Eric Raude possibly being scrapped at <15 years old?

I can only imagine the ststorm in Aberdeen.

Pennyroyal Tea

26,140 posts

213 months

Monday 15th February 2016
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Well, it's old news now, but Dolphin Group have filed. Wonder who's next?

http://www.wsj.com/articles/norways-dolphin-group-...


NRS

22,079 posts

200 months

Monday 15th February 2016
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sooperscoop said:
Here at the new construction end, we've never seen anything like it. None of the big three shipyards in Korea took a single order in January, unheard of...
It might also be because they had a big backlog of projects which have been delayed, resulting in big cost and time overruns for the companies that ordered them.

Mario149

7,750 posts

177 months

Monday 15th February 2016
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OzzyR1 said:
I can categorically state that fuel prices will take a steep hike in the near future as I bought an older s/c 4.2 V8 yesterday hehe

This^^. Every time without fail petrol gets more expensive when I have a thirsty car. Sometimes i think I'm actually controlling the market somehow.

sooperscoop

408 posts

162 months

Monday 15th February 2016
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NRS said:
It might also be because they had a big backlog of projects which have been delayed, resulting in big cost and time overruns for the companies that ordered them.
Yeah, it seems most most offshore projects are a minimum of 1 year and 00's millions behind. I hear the shipping backlog is only 1.8 years now, so it might sort itself out. Jeez, people wait longer than that for a Porsche.

NRS

22,079 posts

200 months

Monday 15th February 2016
quotequote all
sooperscoop said:
NRS said:
It might also be because they had a big backlog of projects which have been delayed, resulting in big cost and time overruns for the companies that ordered them.
Yeah, it seems most most offshore projects are a minimum of 1 year and 00's millions behind. I hear the shipping backlog is only 1.8 years now, so it might sort itself out. Jeez, people wait longer than that for a Porsche.
It's a little different between what is effectively a expensive toy and a multi-billion dollar project that you have been planning to create cashflow for the business from year x, plus having to cover the cost overruns during the delayed time. It will sort itself out, but it's certainly not been looked at in good light from operators (although obviously some delays are the fault of the operators too for late changes etc).

London424

12,826 posts

174 months

Tuesday 16th February 2016
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http://www.bloomberg.com/news/articles/2016-02-16/...

Interesting, but doesn't involve the countries that are going to want to increase production so could be a complete waste of time.

R8Steve

4,150 posts

174 months

Tuesday 16th February 2016
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London424 said:
http://www.bloomberg.com/news/articles/2016-02-16/...

Interesting, but doesn't involve the countries that are going to want to increase production so could be a complete waste of time.
This has a huge impact on sentiment imo.

Pennyroyal Tea

26,140 posts

213 months

Tuesday 16th February 2016
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How accurate are Iran's figures, though? Yes, sanctions have been lifted, but I understood their production capability was very limited, at least for the time being.

1mb/d sounds very optimistic.

Pan Pan Pan

9,777 posts

110 months

Tuesday 16th February 2016
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NRS said:
RDMcG said:
Well. Chinese stock market taking another hit, so will e interesting to see how oil fares tomorrow...........
It was playing catch-up as it were, since it was closed (holiday) when there was some big drops over here in Europe and the US. The question is did it fall the "expected" amount or go down more, potentially pulling the other markets down with it today.
A restriction in oil production, by OPEC combined with increasing demand from China (when China starts increasing output at some time in the future) will cause prices to rise. It seems that it is only the `current' slow down in Chinas economy which has caused a glut of oil and steel amongst others things, on the market at the moment. that position will no doubt change.

anonymous-user

53 months

Tuesday 16th February 2016
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GT03ROB said:
My apartment overlooks the loading jetties & buoys for around 3% of the worlds production. Whats actually surprising is how small an amount it really is!!
Sounds lovely wink

RYH64E

7,960 posts

243 months

Tuesday 16th February 2016
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Pan Pan Pan said:
A restriction in oil production, by OPEC combined with increasing demand from China (when China starts increasing output at some time in the future) will cause prices to rise. It seems that it is only the `current' slow down in Chinas economy which has caused a glut of oil and steel amongst others things, on the market at the moment. that position will no doubt change.
China's economy isn't slowing it's just the rate of growth that's declined, GDP growth is down to a far from disastrous +6.8% in January 2016, and industrial growth at around 6%ish.

Pan Pan Pan

9,777 posts

110 months

Tuesday 16th February 2016
quotequote all
RYH64E said:
Pan Pan Pan said:
A restriction in oil production, by OPEC combined with increasing demand from China (when China starts increasing output at some time in the future) will cause prices to rise. It seems that it is only the `current' slow down in Chinas economy which has caused a glut of oil and steel amongst others things, on the market at the moment. that position will no doubt change.
China's economy isn't slowing it's just the rate of growth that's declined, GDP growth is down to a far from disastrous +6.8% in January 2016, and industrial growth at around 6%ish.
I think what I meant was, that up until recently China was absorbing oil, minerals and other materials at a prodigious rate to feed its growing economy, but it is so big, that even a slight reduction in the rate of growth is the equivalent of water hammer when a tap which was flowing at full bore, is suddenly closed down a bit. There will be a slight over abundance of the materials oil, minerals etc (which China has reduced its take up off slightly) for a while, then when these are used up, things will go back to where they were.

RYH64E

7,960 posts

243 months

Tuesday 16th February 2016
quotequote all
Pan Pan Pan said:
RYH64E said:
Pan Pan Pan said:
A restriction in oil production, by OPEC combined with increasing demand from China (when China starts increasing output at some time in the future) will cause prices to rise. It seems that it is only the `current' slow down in Chinas economy which has caused a glut of oil and steel amongst others things, on the market at the moment. that position will no doubt change.
China's economy isn't slowing it's just the rate of growth that's declined, GDP growth is down to a far from disastrous +6.8% in January 2016, and industrial growth at around 6%ish.
I think what I meant was, that up until recently China was absorbing oil, minerals and other materials at a prodigious rate to feed its growing economy, but it is so big, that even a slight reduction in the rate of growth is the equivalent of water hammer when a tap which was flowing at full bore, is suddenly closed down a bit. There will be a slight over abundance of the materials oil, minerals etc (which China has reduced its take up off slightly) for a while, then when these are used up, things will go back to where they were.
Not really, no. When a tap is closed down a bit flow reduces, China's economy isn't reducing, it's growing at about 6% year on year, so in your analogy the tap would be opened up still further. It's the rate of growth that's slowing, their economy is bigger than it was this time last year and will be bigger still in a years time.

anonymous-user

53 months

Wednesday 17th February 2016
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RYH64E said:
Not really, no. When a tap is closed down a bit flow reduces, China's economy isn't reducing, it's growing at about 6% year on year, so in your analogy the tap would be opened up still further. It's the rate of growth that's slowing, their economy is bigger than it was this time last year and will be bigger still in a years time.
Quite. Scary how a drop in the rate of growth is interpreted as a slow down. I blame GCSE maths.