Oil: how low can it go?

[R8Steve]

fido said:

I have the same feeling. Made a killing on a short position but my BP shares are floundering (bought them around 375p). Would take some balls to add to that position, which I seem to be lacking .. but I still can't see where the extra demand is going to coming from - not the BRICS or Europe for sure.

Edited by fido on Tuesday 12th January 10:57

It's not so much that extra demand is required, simply less supply.

I am long on oil and have bought physical shares this morning in a few of the mid level oilies. Ithica, Genel, Premier and Tullow. When the turn happens i can see big upwards corrections across the sector.

I could be wrong of course and it's pretty much going against every analysts thoughts but such a thought process has worked for me in the past.

[fido]

R8Steve said:

I could be wrong of course and it's pretty much going against every analysts thoughts but such a thought process has worked for me in the past.

Well I agree there is some scaremongering going on. And there isn't much point in even Saudi Arabia pumping oil at $20 a barrel - they'll be making hardly any profit! So there is a floor - just not sure if we're there yet.

[Corpulent Tosser]

fido said:

Well I agree there is some scaremongering going on. And there isn't much point in even Saudi Arabia pumping oil at $20 a barrel - they'll be making hardly any profit! So there is a floor - just not sure if we're there yet.

Saudi and Iraq can produce at around $10 but few other countries can, the US is at or below break even costs and Britain is already selling at way below operating costs.

Unfortunately I think we could see oil in th elow 20s before it sees any recovery. I hope I am wrong.

[number 46]

I still think $25 ! made a nice little profit last night whilst asleep!! I have got caught out abit this morning on the pull back though!

[Mr Sandman]

R8Steve said:

It's not so much that extra demand is required, simply less supply.

I am long on oil and have bought physical shares this morning in a few of the mid level oilies. Ithica, Genel, Premier and Tullow. When the turn happens i can see big upwards corrections across the sector.

I could be wrong of course and it's pretty much going against every analysts thoughts but such a thought process has worked for me in the past.

I think the swing will take a long time though, not like the overnight price rockets of yonder.

[R8Steve]

Corpulent Tosser said:

Saudi and Iraq can produce at around $10 but few other countries can, the US is at or below break even costs and Britain is already selling at way below operating costs.

The reality is that it is a LOT higher than this, more like $20 per barrel once you work out the weighted average cost of capital and other expenses (transport/DD&A/etc/etc).

Now, add to the fact that Saudi Arabia is a petrostate with close to 50% of their GDP coming from oil profits (the majority of which comes from the state owned Aramco (which they are now looking at doing an IPO for - struggling a bit perhaps?). The countries budget deficits are increasing sharply (3 fold from last year alone!) and they actually need a brent crude price of over $100 per barrel to balance this!

There is a lot more to the bigger picture than how much it costs to get a barrel out the ground, they cannot sustain these prices and they will cut production/output to raise prices soon.

[Mr Sandman]

anonymous said:

[redacted]

Where do I sign?

[Mr Sandman]

R8Steve said:

Corpulent Tosser said:

Saudi and Iraq can produce at around $10 but few other countries can, the US is at or below break even costs and Britain is already selling at way below operating costs.

The reality is that it is a LOT higher than this, more like $20 per barrel once you work out the weighted average cost of capital and other expenses (transport/DD&A/etc/etc).

Now, add to the fact that Saudi Arabia is a petrostate with close to 50% of their GDP coming from oil profits (the majority of which comes from the state owned Aramco (which they are now looking at doing an IPO for - struggling a bit perhaps?). The countries budget deficits are increasing sharply (3 fold from last year alone!) and they actually need a brent crude price of over $100 per barrel to balance this!

There is a lot more to the bigger picture than how much it costs to get a barrel out the ground, they cannot sustain these prices and they will cut production/output to raise prices soon.

Indeed. And the cost of capital is only set to creep up with all the instability. Hence, all these super low extraction costs in the GCC are to be taken with a pinch of salt. Simple fact is, we're hurting out here.

[hornetrider]

halo34 said:

It's dire - I work in the industry and frankly we count days and hours I am employed rather than months or weeks and have to be thankful.

Hope you're alright. BP to shrink workforce by a fifth, 4000 to go

http://www.theguardian.com/business/2016/jan/12/bp...

[number 46]

[quote

As i'm sure we've discussed on other threads, it's all a gamble at the end of the day, I've made a load of money on it on the way down, i now feel the tide is turning and, as you say, i am now long on oil. You pays yer money, you take yer chances

Oil now in positive terms intraday as i type this.

[/quote]

Good luck with that Long, I Think that you will need very deep pockets before you make money on that bet!!

[jonah35]

How do you best invest in oil?

Not shares but the physical oil.

Is etf securities any good to simply buy an etc/etf?

[irocfan]

jonah35 said:

How do you best invest in oil?

Not shares but the physical oil.

Is etf securities any good to simply buy an etc/etf?

try spread betting....

[Fittster]

hornetrider said:

halo34 said:

It's dire - I work in the industry and frankly we count days and hours I am employed rather than months or weeks and have to be thankful.

Hope you're alright. BP to shrink workforce by a fifth, 4000 to go

http://www.theguardian.com/business/2016/jan/12/bp...

4000 is a fifth of BP workforce? I'd have thought they would have a far larger workforce than that.

[R8Steve]

Fittster said:

hornetrider said:

halo34 said:

It's dire - I work in the industry and frankly we count days and hours I am employed rather than months or weeks and have to be thankful.

Hope you're alright. BP to shrink workforce by a fifth, 4000 to go

http://www.theguardian.com/business/2016/jan/12/bp...

4000 is a fifth of BP workforce? I'd have thought they would have a far larger workforce than that.

84.5k according to wiki, nothing like a good bit of exaggeration for a good news story though.

Eta - it's a 5th of the North Sea workforce, just cleverly worded for better effect.

[TTmonkey]

Who here remembers the first few posts of "Goldenboy".

Sounded like a nutter.

[R8Steve]

number 46][quote said:

As i'm sure we've discussed on other threads, it's all a gamble at the end of the day, I've made a load of money on it on the way down, i now feel the tide is turning and, as you say, i am now long on oil. You pays yer money, you take yer chances

Oil now in positive terms intraday as i type this.

Good luck with that Long, I Think that you will need very deep pockets before you make money on that bet!!

Thanks, I make numerous trades a day so have already made some on a long bet and my overall net position is long at the moment. I have left sufficient margin to ride out any significant drop should it happen. I believe there is more upside than downside at the current price hence my position.

[number 46]

R8Steve said:

Thanks, I make numerous trades a day so have already made some on a long bet and my overall net position is long at the moment. I have left sufficient margin to ride out any significant drop should it happen. I believe there is more upside than downside at the current price hence my position.

Yea, I guess longer term you are right, only another $30 to go before it's worth nothing!!! It's crazy that only 6 months ago it was over a $100! I'm more day to day trading at the moment, but I'm thinking once it gets mid 20's then things may well change. I've got some longs that are hurting me at the moment but looking longer term they will be a nice earner!

[number 46]

When I say 6 months I really mean over a year ago ! Too much Graves!!!

[NRS]

R8Steve said:

84.5k according to wiki, nothing like a good bit of exaggeration for a good news story though.

Eta - it's a 5th of the North Sea workforce, just cleverly worded for better effect.

I thought it was pretty clear from the title that it was just north sea jobs? Unless they edited the title afterwards? I would guess quite a lot of the worldwide jobs are people working in petrol stations. I know when we sold our petrol stations it was around 1/3 of the employees in the company that moved with them.

[Charlie1986]

R8Steve said:

It's not so much that extra demand is required, simply less supply.

I am long on oil and have bought physical shares this morning in a few of the mid level oilies. Ithica, Genel, Premier and Tullow. When the turn happens i can see big upwards corrections across the sector.

I could be wrong of course and it's pretty much going against every analysts thoughts but such a thought process has worked for me in the past.

Premier Oil suspended, As a newbie is this good news or bad news?