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ancona

Praying Mantis
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It appears as though oil is ready to take a 53 handle. It will be interesting to see the follow on effects of this in a few months. In a natural environment, price changes like this should result in lower air fares, drops in prices for nearly everything we use or buy, and in the longer view, I suspect that if left to equilibrium, rather than algo's, a better overall economy.

Of course we all know that won't happen. At least not until I become Emperor.:rotflmbo:
 
I've been "living under a rock" lately - haven't got out much or followed the news much. I got out and about yesterday for the first time in a while and was shocked when I stopped to fill the gas tank at how much the price of gas has dropped at the pump. It's almost a dollar less than the last time I hit the pump.
 
check out zero hedge. 9 trillion in derivitives is going to blow up. basically dollars invested to produce energy- now these loans will not be able to be repaid.

my reply- is that an average person can buy gas food and clothes now
 
It always takes a lot longer for prices to drop when oil goes down than it does for them to go up when oil shoots up. Lots of things have been coming down. The last few weeks aroun here a 2 liter of coke is down 50 cents per liter. They've been saying the one lagging the farthest behind is air fares which haven't dropped a lot. I just hope it doesn't get below $50/barrel cause apparently our state worked out some deal with the frackers that if oil gets below $50 they don't have to pay any taxes for a year. I want the insanity in the state to taper off, but if the frackers get let off the hook for a year of taxes cause oil drops below $50 then their cost to produce is lower so they will probably drill like crazy for that year unless it gets below $35. So I'll cross my fingers that it goes down to $50.01 and hold there for a long time.
 
The price of oil is KILLING me. Best estimate is that it will cut my cash flow by at least 25%. I am beginning to wonder if I can survive. I have already been hit by a $1000 reduction in cash flow in the last month and saving $3.50 per day at the gas pump does not even come close to offsetting the loss. Current price around here is $2.39 per gallon, down over 60 cents in the last month. As long as gas stayed around $3.50/gallon I was happy. Not happy at all now.

Also, scrap prices are very soft. Aluminum today is at 60 cents, down from 64 just a few weeks ago. Iron is down from $240/ton a few months ago - Mine is going in tomorrow and I hope I can still get $200/ton.

And to top it all off, the phone is simply not ringing, which means very few sales of any kind. It is getting SCARY. Rent, phone, lights, taxes, etc never drop regardless of how bad things get.

Everything else around here seems to still be rising - OJ at $5.99/jug as opposed to $4.59/jug one month ago. Bread up about 20% in the last month. Dried fruit up 28%. Canned goods are holding steady, though, as are milk and some other items. Nothing seems to be dropping, and not much of anything of value on sale either.

No idea about clothing, electronics, furniture, etc as I simply cannot afford any of it at any price.
 
MMerlin,
OJ will continue to rise I am afraid to say. Florida is in a bad way right now, since a citrus disease started spreading through groves across the state. Citrus greening is a pathogen that causes green fruit to drop from the tree, and there currently is no known defense against it. Trees are dying off by the millions right now. It is estimated that on this current trajectory, there will be no commercial citrus in just a handful of years.
 
Lower oil prices are wreaking havoc in Russia:
The ruble fell for a sixth day Tuesday, continuing to drop despite efforts by Russia's central bank to halt the historic slide.

The ruble fell to 70 per dollar for the first time, slumping further hours after Russia's central bank raised a key interest to an eye-popping 17% in an effort to halt a steep slide in the currency and avert a perilous bout of inflation.

The Bank of Russia increased its benchmark rate to 17% from 10.5% Monday after the ruble's value had fallen 10%. That move followed U.S. Congress authorization of tougher sanctions against Russia and further drops in oil prices.

The central bank's move followed a 1 percentage point increase in the rate on Thursday.

"The decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks," the central bank said in a statement.

The ruble has fallen 50% against the dollar since September as oil prices have plummeted. Oil accounts for about two thirds of the country's exports and about half of government revenue, according to Charles Movit of IHS Global Insight.
...

http://www.usatoday.com/story/money...central-bank-key-rate-to-17-percent/20455833/

...
In Russia, investors are growing increasingly worried that the Kremlin has in effect decided to print money to address a growing debt problem. Traders are also raising concern that the cronyism and opaque insider dealings that have plagued business here have now spread to monetary policy.

According to analysts, the ruble’s fall on Monday was sparked by word of an opaque deal involving the central bank and the state-controlled oil company, Rosneft. The well-connected business executive running the company, Igor I. Sechin, a longtime associate of Mr. Putin, had apparently persuaded the central bank to effectively issue billions of new rubles to his company to help cover debts.
...
Rosneft, for example, had been clamoring for months for a government bailout to refinance debt the company ran up while making acquisitions when oil prices were high. Because of sanctions, those loans cannot be rolled over with Western banks. Debt payments are coming due later this month.

Relying only on the company’s own cash reserves would disrupt oil development projects that Russia is relying on for future revenue. With the oil giant in a bind, the central bank ruled that it would accept Rosneft bonds held by commercial banks as collateral for loans.

Rosneft issued 625 billion rubles about $10.9 billion at the exchange rate at the time, in new bonds on Friday. The identities of the buyers were not publicly disclosed, but analysts say that large state banks bought the issue.

When these banks deposit the bonds with the central bank in exchange for loans, Rosneft will have been financed, in effect, with an emission of rubles from the central bank. The deal roiled the ruble on Monday, according to analysts.
...

http://www.nytimes.com/2014/12/17/business/russia-ruble-interest-rates.html?_r=1
 
Theres a fairly strong view that Putin is the master chess player and will have anticipated a drop in oil price.

Even a not too smart person in Putins gang ought to have seen an attack on oil price coming, if it is in fact a US led attack ?

So while significant price increases are going to annoy ordinary Russians, it can be sold as financial warefare and not Putins fault and when you dont really have much debt and can print to fix the problem in the short term and your currency is still an unbacked fiat, then is it such a big problem for Russia ?
 
I don't foresee wheat getting a lot cheaper soon either. Although we had record crop yields this summer, most of it had high levels of vomitoxin so it couldn't be used for human consumption. Piggies have had a disease that made bacon go up, and beef prices are still high as well. The cost of shipping the product will go down but the effect on crops overall prices near term will have little to do with the price of oil. If it stays down for 6 months+ then the input costs for crops & livestock will go down and can start to have an effect on prices, if there are no more widespread crop/livestock disasters.
 
Theres a fairly strong view that Putin is the master chess player and will have anticipated a drop in oil price.

Even a not too smart person in Putins gang ought to have seen an attack on oil price coming, if it is in fact a US led attack ?
I think the rumors of Putin's genious are overrated. His cult of personality has managed to penetrate much of the stacker/prepper/libertarian/gun crowd; a crowd that tends to think everything they see in US news is a triple layer conspiracy (lizards!) all the while going to Kremlin-backed RT for the "real truth" (truthful when truth benefits Russia). I guess all that shirtless horseback riding pays off.

No matter how smart Putin's gang is, they still have a 1-dimensional economy and dwindling population. Dangerous, but not in control. In fact, nobody is in control.
 
MM- isnt there insurance for that?

Business interuption insurance
 
Also, scrap prices are very soft. Aluminum today is at 60 cents, down from 64 just a few weeks ago. Iron is down from $240/ton a few months ago - Mine is going in tomorrow and I hope I can still get $200/ton.

So much for my hope. Iron is $145/ton, meaning that on 3 tons I lost about $150. Ouch!

The only possible positive is that now I may be better able to compete with the big guys since now the scrap aluminum/iron price ratio is better at 8.2:1 as opposed to 6:1. Historically the ratio has held around 20:1, so it still has a long way to go, but will probably get back there in the next few months. The worst ratio was a few years ago at 3.4:1, which darn near did me in.
 
I dont think putin is a genious.


We control the money. We own the computer code. ....only a smarter algorhythm can bump us. very few guys are going to rock the boat. it is too easy to be killed or have a family member killed.

I been thinking- what if we have a collapse here- at some point it might be wise to go shopping with all the credit cards- assuming that the system will work for that.
If you think we reach that point please post a thread on this board.

I am sorry MM, that you are taking a beating. I do think it is done on purpose to shake down russia
 
...
And that, ladies and gentlemen, is what the great oil collapse of 2014/2015 is all about. For those who want to know when to buy oil, the answer is simple: just after (or ideally before) Putin announces he will no longer support the Assad regime. If, that is, he ever does because that act will effectively destroy all leverage Putin may ever have over Europe, and in the process, also end - quite prematurely - his career.

Until then, every single HFT-induced spike in oil is one to be ultimately faded, because as the past few months have shown, it is the Saudis who set the price, and they will not take no for an answer, even if it means crippling the entire US shale, and energy, industry in the process.

http://www.zerohedge.com/news/2015-...entire-oil-collapse-all-about-crushing-russia

Exec. summary: US & Saudis want Qatar oil/gas to flow through Syria (pipeline) to Europe which would damage/destroy Russia's leverage over Europe's oil/gas markets. Oil price crash engineered to pressure Putin/Russia economically. Putin can't cave on this issue though. So politics will ensure the price of oil stays low for the forseeable future.
 
... and here we see the cost of this gambit:
Now that oil prices have dropped by half to $50 a barrel, Saudi Arabia and other commodity-rich nations are fast drawing down those “petrodollar” reserves. Some nations, such as Angola, are burning through their savings at a record pace, removing a source of liquidity from global markets.

If oil and other commodity prices remain depressed, the trend will cut demand for everything from European government debt to U.S. real estate as producing nations seek to fill holes in their domestic budgets.

“This is the first time in 20 years that OPEC nations will be sucking liquidity out of the market rather than adding to it through investments,” said David Spegel, head of emerging markets sovereign credit research at BNP Paribas SA in London.

Saudi Arabia, the world’s largest oil producer, is the prime example of the swiftness and magnitude of the selloff: its foreign exchange reserves fell by $20.2 billion in February, the biggest monthly drop in at least 15 years, according to data from the Saudi Arabian Monetary Agency. That’s almost double the drop after the financial crisis in early 2009, when oil prices plunged and Riyadh consumed $11.6 billion of its reserves in a single month.
...
Excluding Iran, whose sales are subject to some sanctions, members of the Organization of Petroleum Exporting Countries are expected to earn $380 billion selling their oil this year, according to U.S. estimates. That represents a $350 billion drop from 2014 — the largest one-year decline in history.

“The shock for oil-rich countries is enormous,” Rabah Arezki, head of the commodities research team at the IMF in Washington, said in an interview.

Oil-rich countries will sell more than $200 billion of assets this year to bridge the gap left between high fiscal spending and low revenues, Spegel said.
...
The potential impact of the selloff has divided analysts and officials.

One argument is that petrodollars and other commodity- linked foreign reserves are not a large enough force in an ocean of investments from pension funds, asset managers, insurers and individuals to make a real impact in asset prices and overall liquidity. Plus, bond purchases by central banks involved in so- called quantitative easing mitigates the impact of sales.

The other school of thought, broadly backed by the IMF, says that petrodollars matter because they’re significant enough to turn market sentiment as flows switch direction.
...

http://davidstockmanscontracorner.c...etrodollar-assets-at-record-200-billion-pace/
 
Oil reports detail that Saudi Arabia has jacked up production by the equivalent of 50% of all Baaken production. What is going on now is what did in Venezuela. They are trying to desperately boost income so they pump like mad. In turn, prices drop to levels that require even more pumping to meet income goals but at lower prices paid. It is a self realizing feedback loop. It cannot go on for long.
 
Drilling is plummeting here, also they aren't fracking several drilled holes, waiting to see if the price stays below $55 iirc, then they will get a huge tax break and make the holes more profitable to pump. I am very much ready for all the oil field trash to blow out the state and take the crime, littering, traffic, pollution with them. I would pay $4 gas for $30 oil, just so they leave.
 
Drilling is plummeting here, also they aren't fracking several drilled holes, waiting to see if the price stays below $55 iirc, then they will get a huge tax break and make the holes more profitable to pump. I am very much ready for all the oil field trash to blow out the state and take the crime, littering, traffic, pollution with them. I would pay $4 gas for $30 oil, just so they leave.

The stories that I've heard from the oil worker shanty towns sound terrible. Kind of crazy that guys pulling 6 figures are sharing campers and motel rooms since there is literally nowhere to live. Well, at least that was the story before the recent price drop.
 
If oil stays around $50 a barrel, most countries in the region will run out of cash in five years or less, warned a dire report from the International Monetary Fund this week. That includes OPEC leader Saudi Arabia as well as Oman and Bahrain.
...
Saudi Arabia, the world's largest oil producer, needs to sell oil at around $106 to balance its budget, according to IMF estimates. The kingdom barely has enough fiscal buffers to survive five years of $50 oil, the IMF said.

...

151022160934-cheap-oil-middle-east-780x439.png


...
Iran's break-even oil price is estimated at $72 and it could survive cheap oil for less than 10 years, the IMF estimates. It's a rosier outlook compared to its neighbors. But Iran's outlook is clouded by potential sanctions relief (which hasn't come yet) and a surge in oil production from its nuclear deal with the West.

Iraq has virtually no fiscal buffer remaining, according to the IMF. The country is grappling with internal strife and has lost large swaths of land to ISIS.

"Violence increasingly affects civilians, and has a particularly adverse effect on confidence and expectations, and consequently on economic activity," the IMF warned.

Bahrain is also under great financial pressure, with the likelihood of also running out of options in less than five years. The country already has lots of debt and has been running deficits for several years in a row.

"They are in a relatively tight spot. They are going to have to undertake a more significant tightening," said Jason Tuvey, a Middle East economist at Capital Economics.

However, a handful of countries are well positioned to face the storm. Topping that list are Kuwait, Qatar and the United Arab Emirates. That's partially because these countries don't need sky-high oil prices to balance their budgets.

Kuwait's break-even oil price is estimated by the IMF at just $49, or just a tad higher than current levels. The magic number is believed to be $56 in Qatar, the host of the 2022 World Cup, while the UAE needs $73 oil.

But these three countries have built up mountains of oil money that protect them during the leaner times. The IMF said the UAE has enough fiscal buffers to withstand $50 oil for nearly 30 years. Qatar and Kuwait can sustain cheap oil for almost 25 years.

http://money.cnn.com/2015/10/25/investing/oil-prices-saudi-arabia-cash-opec-middle-east/

Assuming the theory posited earlier re: Saudi & US driving the price down to pressure Iran/Russia is correct, this IMF report is missing a key data point - how long can Russia endure these prices?
 
When the ME runs out of cash, that's when we see the SHTF. That my friends is when we see all out war. Those rag heads will burn the middle east to the ground when the sheiks stop handing out goodies and it will happen all of a sudden. Then, they will set Europe on fire.

Wait for it, because it will happen sooner than later.

All they have to do to raise oil prices back up to a hundred a barrel is stop a quarter of their wells for a while. That's it. But they won't do it. Why? Greed.
 
Oil Price

Well Oil is drastic. I say primarily Saudi Arabia because they are the one member of OPEC that has enough money to wait out low oil prices. Beleaguered member countries like Iran, Iraq, Venezuela, and Nigeria are begging for oil production cuts to raise prices. Looking at the OPEC behaviour I think we can expect a raise in oil price keeping in mind major oil producing countries trying to do the same. Any way to go around that will be a boost to US. Keeping in mind analyst prediction they are dicey about the oil price forecast 2016. It may raise to 65$ as per the predictions by next year.
 
Sunction, Saudi Arabia is not going to be in a position for very much longer to support those low prices. They have an enormous social network with very generous benefits. There is also a huge extended royal family, all of them sucking cash from the same straw. That is rapidly depleting their cash reserves, so much so that they have already expressed concerns about it. We'll se how long they let this go on, but I suspect it isn't to be for long.
 
They can always print to keep the show on the road

I mean .......

why is it so important that any nation balances its budget in todays crazy world ?

It makes no sense to me that some can print and others seem not to have this option.

I would stop the pumps and start the printers till the whole thing falls over, then be in a position to still have some oil to sell, rather than give it away at less than cost for paper that is becoming increasingly worthless.

Easy enough to make your oilco's 'too big to fail' and push free money at them.

Hey, vote for me, I can fix everything :judge:
 
Oil rise

Oil will rise to $70 in the end of 2016. :rotflmbo:
These are the words of perma oil magnate T. Boone. What do you think?
 
I'd be very surprised if he is correct.
 
I been into more charge cards. Oil charge cards were hard to get- I got a few pretty easy tho.

Sunoco even lets you take cash out of ATM- i assume it is a high fee. It is nice it is there tho.
 
One of the great unknowns facing the US shale industry, and threatening the recurring rumors of its imminent demise, is how it is possible that despite the collapsing number of oil wells, and despite the plunge in crude prices which supposedly are well below all-in shale production costs, does production not only refuse to decline, but in fact has been largely increasing in the past 6 months, with just a modest decline in recent weeks.
...
According to a report by the Bloomberg Intelligence analysts William Foiles and Andrew Cosgrove, ... a break-even model for the Permian Basin and Eagle Ford shows that oil production across five plays in Texas and New Mexico may remain profitable even when WTI prices fall below $30 a barrel, according to a 55-variable Bloomberg Intelligence model for horizontal oil wells.
...

More: http://www.zerohedge.com/news/2016-...ter-many-shale-plays-found-have-far-lower-bre

I imagine SRSRocco will have a response to this at some point as it's a subject he's written about a lot.
 
I reckon the fed have instructed lenders to roll over / extend any current loans and the Fed will 'see em right'

The price of oil is not the issue, its breaking Russia and / or Saudi with a few other trouble makers thrown in.

So a few US oilcos may be allowed to fail in order to show market forces are prevailing whilst quietly underwriting US oil.

The bloomberg 'intelligence' is just more bollox cos people are starting to wonder why US oil is still pumping product at a loss.
 
Oil will rise to $70 in the end of 2016. :rotflmbo:
These are the words of perma oil magnate T. Boone. What do you think?

Just four days ago, on Monday afternoon, "legendary" oilman T Boone Pickens said that crude has hit bottom at $26 per barrel, and predicting that prices should double within 12 months.
...
Earlier today, literally days after he predicted oil would double from its $26 "bottom", Pickens told Bloomberg that he has cashed out.

But, but, what happened to oil prices will double from their bottom? And did he just liquidate all his holdings just $4 above this so-called bottom?

Well... yes.
...

More: http://www.zerohedge.com/news/2016-...double-t-boone-pickens-sells-all-oil-holdings

So, was he sincere in his prediction, or just trying to move the market?
 
hah yeah

he cashed out at or close to a low and 'is looking for a good re entry point' !

So he thinks the low is not yet in .........

Cushing storage apparently brim full and everyone still pumping flat out.
They really need a ME / Russia war so some of the flows can be disrupted )-:
 
...

But, at some point, oil companies (anything oil really) will become a BUY. Oil will not be going away, and it is likely that at the right time, investments in the oil sector will do far better than "average investments".

When? Hmm, beats me. Perhaps 6 months, more likely after the bankruptcies... The oil sector would be very risky now, less so after the banks foreclose on some oil companies / properties. Similarly, property in Texas will likely do better than other real estate once oil comes back. And oil will come back! At higher prices than ever most likely (and THAT is the good case scenario!).

Almost all hyperinflations happen AFTER a deflation...
 
...
But, at some point, oil companies (anything oil really) will become a BUY. ...

Almost all hyperinflations happen AFTER a deflation...

This is what concerns me. I can't shake the feeling that when oil makes it's move to the upside, it's going to be disorderly (and gold/silver are going to follow). Hope I'm wrong.
 
As they loose control of all the controlled markets ?

Fundamentals should quickly put the price back down as world trade shudders to a halt and demand for oil is hugely reduced.

Its actually hard to wrap your head around how it might unravel as there are so many variables ........
 
* bump *

So currently in world affairs, Venezuela is swirling the toilet drain, US sanctions are set to begin on Iran in a couple weeks and a there is a potential breakdown in US-Saudi relations brewing over the Khashoggi assassination - all of which could strain the global oil trade.

That might be a good thing for the US shale oil industry...

... (based on the shale industry’s very own breakeven prices)...

... the shale industry may have to sell a quarter of its oil production (1.5 million barrels per day) just to service its debt by the end of 2019. ...

https://srsroccoreport.com/u-s-shale-oil-industry-catastrophic-failure-ahead/
 
I read all of Steve St Angelo's articles and while I cannot fault his research, I do struggle a bit with his projections and conclusions.

The USG cannot let the US oil industry fall apart and would seem to have already had a quiet word with their lenders.
If the big banks are TBTF then the US oil companies will also fall into this category.
 
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