Johnaut46

It is a very adversarial relationship between the service companies and the E&P side. You as a rental / service company want the most for the tools / service. Prices go up on your products. E&P Companies want it at the cheapest and best price. Some where in the middle is the agreement. As an example and not related to ANY pricing: E&P did their cost cost analysts at 1.50. E&P's released their P&L statements they made XX Billion of dollars. Rental / Service companies went up in price. But the cost analysts was still for 1.50. Now Goods & Service are 1.85 that is a .15 Cent loss. No one likes losses or write offs. People like them Right On's and making money.

This is when I got in the biz: 1998 Semisub 4000' that I worked on had a day rate was a low of 50,000USD a day. 2014 The same Semisub 4000' day rate is avg 440,000USD.

That is one heck of a mark up in 16yrs. It was a good run. It is just plain economics. What go up must come down.

If you are a young guy < 40 I say stay with it if you can. It will swing again in 10 to 15yrs and you will be sitting pretty for the next boom.

Crude Intentions

iTrader: (1)

The oilfield is a huge roller coaster. Has been since day 1. High highs and low lows. The price will recover and it will pick up again. Also it likely shoot up at some point. My guess is those of us who can ride out the majority of this year will be very happy next year.

The Saudis make a ton more money at higher prices and they want to do that. It's business and you always wanna make the most you can. Right now they are not happy with Russia's agreement with china. They are basically bankrupting Russia. A little bit has to do with us but we can not export crude oil.

When they feel they have the market back in their favor they will raise it again.

Wildman_grafix

Just to be clear Russia was forced into the deal with China becuase of sanctions put on them. They got more by selling to Europe but they screwed that one up.

Suadi dosent like that russia is helping Syria.

j21black

And at the same time, they got a deal to Supply the fast growing/heaviest populated market on the planet...Most of Europe is broke....

This whole thing is to bring Russia to it's knees with hopes that it somehow puts a strain on China's economy....The Saudi's may be doing it, but the US government is pulling the puppet strings.

The King was probably told let the bottom fall out on crude prices, it will slow US internal production and exploration. US Oil companies will stop investing in new ventures. Our internal production will drop drastically. It will kill the Keystone pipeline project (sounds like what our current administration wants huh). Russia's Economy will implode. Once all that occurs drive the prices to new highs, recoup all losses, and record new record profits while it takes the US another 10-15 years to increase internal production.

Hell, someone probably handed them an ROI on the entire thing...

1MOSES1

i have actually been tossing around the idea of investing a few thousand into oil these past few weeks...my rationale:

from a boating persepctive and someone whom consumes a fair bit of petroleum. there are a couple scenarios:

1. if oil prices stay put, i have substaintial savings at the pump compared to last year; but my money in the market remains flat. although im out the money i invested (until i pull it back out), hope it doesnt drop any further...its money i can probably re-coupe down the road. somewhat of a risk but not a big one in my opinion. although the market seems pretty volatile.

2. if oil shoots back up, i get killed at the pump. meanwhile im making money in the market to help compensate my losses.

i guess its a question of risk with scenario 1...thinking more about it i would have to evaluate how much gas i actually consume vs. savings and potential market gains. just thinking outloud. anyone else have similar thoughts?

sprink58

We have a lease for high quality crude and natural gas on our property in Alabama with BP. We have a contract minimum with BP and we are approaching that now. They are cut back on what they are pumping about 35% since last year but are letting us know that an increase in volume pumped is on the horizon...about 90 days out.

We are seeing a BIG increase in domestic output over the past 3 years that many never predicted. I hope it does hurt the Russians...those SOB's have to learn that his is the 21st century and they can't hide their crap any more from the world!!

j21black

Depending on how much you have to invest it may or may not make sense.

If you have a large sum now is the time to get in....Buy low Sell high....

If you are talking a small money investment the potential payback may not be worth it in the end...

We told our lease holder to fill the tanks and let it sit....I only wish it was that easy...

performancems

bingo. Bad for people in the oil industry used to making a **** ton, but good for everybody else everywhere else

SummerObsession

I can't speak much on crude prices nor can I even guess the world oil and gas market (if I could I wouldn't be typing this, I would be on my mega yacht drinking tequila and planning my next destination haha), but I can say a a small gasoline retailer that gas prices will always go up quicker than they come down.
Simple reason....let's say you bought 10,000 gallons of gas last week at $2.00 and this week it is selling for $1.70. Doesn't take a mathematician to see there is no money selling that gas. Any little excuse to sell higher and get your money back and you will take it.