Canadian dollar sinks below 88 cents as Saudis cut oil to $77

[Dan02]

Originally Posted by blankall

The only reason they are underwater is due to the low oil prices.... Which is exactly my point. If oil prices were at their natural levels the shale fields would be profitable.

Instead OPEC is using the same simple and dirty trick all monopolists use. Sell at artificially low prices, drive the smaller and developing competition out of business, and then jack up the price.

Your post confuses me, how do you exactly determine the natural price level for oil? Or is the "natural price level" what you want it to be to turn a profit for you?

Does supply and demand not dictate the price in the oil world anymore? and why should the saudis and opec cut production to prop up the natural price of oil for you?

Instead of the Saudis taking the hit and cutting production they are letting the inefficient producers take it on the chin and eventually it will result in less production and the supply and demand situation will tighten and prices will go back up yet the Saudis won't have given market share away.

There doesn't seem to me to be any cheap or dirty tricks involved here at all just good business even though it might not seem like it from your perspective.

[ExiledFlamesFan]

This is the complete opposite of a monopoly. The reason we have such low oil prices is because of competition. Which is great as a consumer but terrible as an Albertan

[blankall]

Ummmm OPEC is the definition of an oligopy. Oil markets are in no way governed by competition. A few large suppliers openly collude to control prices by artificially throttling or increasing supply.

[ExiledFlamesFan]

Originally Posted by blankall

Ummmm OPEC is the definition of an oligopy. Oil markets are in no way governed by competition. A few large suppliers openly collude to control prices by artificially throttling or increasing supply.

OPEC in not an oligopy. OPEC is a cartel. There are other players in the global oil market. OPEC controls a percent of the market, not the entire market. And over the last 5-10 years this market share had dropped significantly

[Dan02]

The Oil market is certainly not a oligopoly outside of a few countries like Venezuela.

[macker]

Originally Posted by Flash Walken

Opec are putting pressure on Iran and Russia, that's the reason this is happening.

Yes, a big part of this is Sunni-Shi issues and Saudi Arabia wanting to hurt
Iran (Shi Muslims) as much as possible.

[stampsx2]

Saudis today saying low oil prices are temporary. They're not making money at $55/barrel and decreasing demand by weakening the global economy. Oil production is more than just for gas.

[combustiblefuel]

Another reason to get of the dependency of oil.

[stampsx2]

Originally Posted by combustiblefuel

Another reason to get of the dependency of oil.

Because we're at the mercy of opec?

[T@T]

Originally Posted by stampsx2

Saudis today saying low oil prices are temporary. They're not making money at $55/barrel and decreasing demand by weakening the global economy. Oil production is more than just for gas.

LOL, complete BS. The Saudis could stick a straw in the sand and have a $10.00 hooker suck oil from it and make money.

[chemgear]

http://www.bloomberg.com/news/2014-1...it-bottom.html

Oil Investors Keep Betting Wrong on When Market Will Bottom


Investors betting on a rebound in oil prices are nothing if not tenacious.

They have poured the most money in more than four years into exchange-traded products that track oil as prices fell 18 percent this month. It’s the third consecutive month that the four biggest U.S. funds have received money, during which time futures have plunged 41 percent.

“It’s a testament that after such a wild selloff people are more and more eager to step in and wait for this eventual rebound,” said Stoyan Bojinov, a Chicago-based analyst at ETF Database. “Oil looked cheap a month ago and it’s even cheaper today, that’s why we continue to see these inflows.”

Oil prices have tumbled by half since June amid surging production and slower than expected demand growth. Output in the U.S. is the highest in three decades, and OPEC, responsible for about 40 percent of global supply, maintained its output target at a Nov. 27 meeting. The U.S. Energy Information Administration said last week that consumption around the world next year will be 390,000 barrels a day less in 2015 than it forecast in October.

[stampsx2]

Originally Posted by T@T

LOL, complete BS. The Saudis could stick a straw in the sand and have a $10.00 hooker suck oil from it and make money.

If there's a post that's complete bs it would be yours. A straw? Really? They could put a straw in the ground? Where's your source?

Production costs by region:

[Krovikan]

Originally Posted by stampsx2

If there's a post that's complete bs it would be yours. A straw? Really? They could put a straw in the ground? Where's your source?

Production costs by region:

What do they mean by oil prices? Are you sure it's cost because 108 for light crude makes no sense. I read that title more as average sale price. Everything I've heard there production cost is around $20

[ranchlandsselling]

Originally Posted by stampsx2

Saudis today saying low oil prices are temporary. They're not making money at $55/barrel and decreasing demand by weakening the global economy. Oil production is more than just for gas.

I'm sorry - this post is a bit confusing. "They're (the Saudis) not making money at $55/barrel and decreasing demand by weakening the global economy,"

The Saudi's are weakening the global economy? Low oil prices are weakening the global economy? Or did you mean "They are not making money at $55 and the decreasing demand (of oil) caused by a weakening global economy"?

[GP_Matt]

That chart is the cost to balance the budget, not the cost to extract oil. They aren't going to shut in wells because they are running a budget deficit.

[ExiledFlamesFan]

Originally Posted by GP_Matt

That chart is the cost to balance the budget, not the cost to extract oil. They aren't going to shut in wells because they are running a budget deficit.

Saudi Arabia has 745 billion in reserve assets. The Saudis can outlast any country or major oil corporation.

http://mobile.bloomberg.com/news/201...iscipline.html

While Russia is collapsing as we speak the Saudis are sitting pretty.

[T@T]

Originally Posted by stampsx2

If there's a post that's complete bs it would be yours. A straw? Really? They could put a straw in the ground? Where's your source?

I didn't think you would take the hooker with the straw literally

But fact remains middle east oil is cheap very very cheap compared to ours.

[edslunch]

The Saudis are playing a dangerous game here. If they keep the price low they could send some of the their OPEC partners such as Nigeria and Venezuela into chaos. Worse, if they do the same to Russia, Russia has the power to strike back.

Suppose Putin orders up a couple of subs to take out Saudi shipping terminals like Ras Tanura, crippling their ability to ship. World markets are thrown into chaos. Of course NATO retaliates, but wait, China can't allow both of it's main energy sources to go down..... Far fetched for sure, but when economies reach the tipping point anything can happen.

[TurdFerguson]

Originally Posted by edslunch

The Saudis are playing a dangerous game here. If they keep the price low they could send some of the their OPEC partners such as Nigeria and Venezuela into chaos. Worse, if they do the same to Russia, Russia has the power to strike back.

Suppose Putin orders up a couple of subs to take out Saudi shipping terminals like Ras Tanura, crippling their ability to ship. World markets are thrown into chaos. Of course NATO retaliates, but wait, China can't allow both of it's main energy sources to go down..... Far fetched for sure, but when economies reach the tipping point anything can happen.

And I thought exhaledflamesfan was a rainy cloud, now WW3 is coming. Dammit.

[edslunch]

Originally Posted by TurdFerguson

And I thought exhaledflamesfan was a rainy cloud, now WW3 is coming. Dammit.

Just doing my part to spread Christmas cheer. Chances of that scenario happening are next to nil