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

[Frequitude]

Originally Posted by polak

Need help cheating for my job interview with an finished fuel distribution and marketing company. How does this drop in price effect them? I mean doesn't there small chunk of profit remain the same?

My guess is that their business model is based on throughput, i.e. a fixed $/L markup for their services multiplied by the number of litres sold. So they really just pass on any prices increases/decreases to the customer.

So where it hits them is on volume. I can't say for sure if the price drop would have translated to higher volumes. Of course in theory a lower price means higher demand (and therefore higher volumes) but not sure if the market actually reacts that fast as a whole. Its not like the refineries are choosing to run any faster to increase supply. They were already running flat out.

So in summary...I don't know! At very least hopefully their days receivable takes a friendly drop.

[firebug]

Originally Posted by gladaki

read some where that 50$ in 2015 is possible.

Read some where that $150 in 2015 is possible.

What's your point? People can speculate all they want, but all that really counts is where people are willing to put their money on the line and for 2015 the low is US$75.79/bbl (~ C$86bbl) in February and a high of US$76.30 in December. What either of us have read is largely irrelevant.

Any company that wants to can hedge their production for next year and receive those prices.

http://www.cmegroup.com/trading/ener...s_futures.html

[chemgear]

OPEC meets on the 27th. Doubt we'll get any certainty about production reductions until then. And even after the meeting . . . if no formal cutbacks from that meeting then it'll REALLY get interesting.

[Table 5]

Where do you guys see the Canadian dollar in relation to the US Dollar in the next few months? I tend to get paid in USD (but have expenses in CDN) and thus need to exchange a chunk every few months. I'm wondering if I should do it now, or see if I can wait it out for a few more months to see if it can go down a bit more.

[agulati]

Don't know if it will continue to be at this exchange rate, but the longer the oil stays low, the better it is for the oil and gas and export industry for the dollar to be weaker

[macker]

Jeff Rubin kinda admits his $200 oil call was wrong Won't be making any such calls in the future.
http://www.bnn.ca/News/2014/12/2/Rub...ng-prices.aspx

[SeeGeeWhy]

http://seekingalpha.com/article/2730...e-drivers-seat

Always look to understand fundamentals.

Summary
• The oil markets have hit multi-year lows on unsubstantiated theories about a supply glut and fears of cooling demand.
• Meanwhile, the geopolitical risks around the world have oddly disappeared in H2 2015.
• Nevertheless, the facts prove that the real thing is way too far from evaporating geopolitical risks or a material deterioration of the global supply-demand fundamentals that can justify a slump.
• The unprecedented downward pressure on oil prices is a headline-driven and sentiment-driven event.
• The oil price will definitely rise significantly in 2015.

[dino7c]

Originally Posted by Table 5

Where do you guys see the Canadian dollar in relation to the US Dollar in the next few months? I tend to get paid in USD (but have expenses in CDN) and thus need to exchange a chunk every few months. I'm wondering if I should do it now, or see if I can wait it out for a few more months to see if it can go down a bit more.

I am in the same boat...make USD but live in Canada. Personally I am holding off a bit although I just did a large exchange. How do you exchange your money? If its a large sum you can get much better rates from a broker

[ExiledFlamesFan]

Originally Posted by SeeGeeWhy

http://seekingalpha.com/article/2730...e-drivers-seat

Always look to understand fundamentals.

Summary
• The oil markets have hit multi-year lows on unsubstantiated theories about a supply glut and fears of cooling demand.
• Meanwhile, the geopolitical risks around the world have oddly disappeared in H2 2015.
• Nevertheless, the facts prove that the real thing is way too far from evaporating geopolitical risks or a material deterioration of the global supply-demand fundamentals that can justify a slump.
• The unprecedented downward pressure on oil prices is a headline-driven and sentiment-driven event.
• The oil price will definitely rise significantly in 2015.

This is absolute garbage by an anonymous dude. If you are going to make claims like "oil price will definitely rise significantly rise in 2015" at least back it up with economics.

That's great that "value digger" (actual cited author) has these opinions but this is akin to getting life advice from a hobo on the streets.

[Slava]

Originally Posted by ExiledFlamesFan

This is absolute garbage by an anonymous dude. If you are going to make claims like "oil price will definitely rise significantly rise in 2015" at least back it up with economics.

That's great that "value digger" (actual cited author) has these opinions but this is akin to getting life advice from a hobo on the streets.

Did you read the article? What parts did you disagree with? Not just the bullet points, but the whole article...

[ExiledFlamesFan]

Originally Posted by Slava

Did you read the article? What parts did you disagree with? Not just the bullet points, but the whole article...

I read up until being forced to register to read the rest of "value digger"s article.

If there is some actual data to back up his/her claims feel free to post it.

[Slava]

Originally Posted by ExiledFlamesFan

I read up until being forced to register to read the rest of "value digger"s article.

If there is some actual data to back up his/her claims feel free to post it.

I'm not doing your work for you. You took a shot at the guy and frankly he has tonnes of economic data in the piece. I don't think you read much further than the bullet points or you'd have known that as well.

[Table 5]

Originally Posted by dino7c

I am in the same boat...make USD but live in Canada. Personally I am holding off a bit although I just did a large exchange. How do you exchange your money? If its a large sum you can get much better rates from a broker

I tend to use Calforex, and do it in relatively large chunks a couple of times a year...the last few times Ive gotten my bank to match the Calforex rate which takes some hassle out of it.

I'm pretty terrible at "timing" the market, but even a 1% fluctuation can be worth hundreds of dollars in the end, so its nice to get things right. Either way, it's a pretty good situation to be in right now for people like us...basically a nice 10%+ bonus in income.

[Slava]

I know exiledflamesfan won't like this article, but it explains why lower prices aren't necessarily the end of the world for Alberta: http://www.bnn.ca/News/2014/12/05/En...e-Alberta.aspx

[ExiledFlamesFan]

Originally Posted by Slava

I know exiledflamesfan won't like this article, but it explains why lower prices aren't necessarily the end of the world for Alberta: http://www.bnn.ca/News/2014/12/05/En...e-Alberta.aspx

Lol. So your argument is "it's gonna be bad, but not catastrophic"
http://business.financialpost.com/20...ecision-today/

“Things were going pretty well until oil prices collapsed,” said Benjamin Reitzes, a senior economist at BMO Capital Markets in Toronto. The policy rate will remain frozen until October 2015, he said.
Oil sands deposits in Alberta are among the world’s most expensive to produce, and a quarter of such projects globally are at risk from falling prices, according to the International Energy Agency. Calgary-based Canadian Natural Resources Ltd., which has a capital budget of $8.6 billion for 2015, may cut investment if oil prices stay around $70 a barrel, President Steve Laut said in an interview last month.

[bizaro86]

Originally Posted by Table 5

I tend to use Calforex, and do it in relatively large chunks a couple of times a year...the last few times Ive gotten my bank to match the Calforex rate which takes some hassle out of it.

I'm pretty terrible at "timing" the market, but even a 1% fluctuation can be worth hundreds of dollars in the end, so its nice to get things right. Either way, it's a pretty good situation to be in right now for people like us...basically a nice 10%+ bonus in income.

If you're doing large USD/CAD transfers, you really should get an Interactive Brokers account. You can transfer currency at interbank spreads, even if its only $1000 at a time. It saves you about 99% of the total cost of changing money, which is mostly in the spread.

You have to keep $10k in the account (it's also a brokerage account).

[1stLand]

If the price of oil doesn't recover, Slava's PC party is in trouble based on their budget of $100 oil.

[oilyfan]

Originally Posted by 1stLand

If the price of oil doesn't recover, Slava's PC party is in trouble based on their budget of $100 oil.

To be fair everyone is in trouble if oil stays low. It's not like the Wildrose has some kind of magic plan.

[chemgear]

http://www.cbc.ca/news/business/oil-...rrel-1.2864101

Brent crude oil fell more than $2 a barrel on Monday to a new five-year low on predictions that oversupply would keep building until next year after OPEC decided not to cut output.

In a report dated Dec. 5, U.S. investment bank Morgan Stanley said oil prices could fall as low as $43 a barrel next year. The bank cut its average 2015 Brent base-case outlook by $28 to $70 per barrel, and by $14 to $88 a barrel for 2016.

[1stLand]

Originally Posted by oilyfan

To be fair everyone is in trouble if oil stays low. It's not like the Wildrose has some kind of magic plan.

Yes, and to be fair it wasn't Prentice who made the budget based on an optimistic oil price.

I actually like the direction Prentice is taking the party.

I think the Government is going to have make some big cuts.
Time to trim the fat.