$20 Oil Around the Corner?

[Jack]

-Crude oil prices will plunge to US$20 per barrel as the global slowdown throws even China into a recession, predicts Philip Verleger of the Haskayne School of Business at the University of Calgary. Furthermore, he said Tuesday, the downturn will be so deep it will take three to four years for the global economy and energy prices to return to normal levels. -The US Energy Information Administration said in its monthly energy outlook it expected global oil demand to fall by 50,000 barrels per day in 2008 and 450,000 bpd in 2009--marking the first time since 1983 that year-to-year world oil demand has dropped.

-a survey of 200 oil and gas companies shows the oil price required to allow new oil projects to break even has climbed from about $18 US per barrel in 1999 to $60 in 2007 and an estimated $62 now. That average price rises to between $80 and $100 per barrel in difficult plays such as the oilsands.

http://www.calgaryherald.com/business/ener...6027/story.html

 

[Stephen1151]

QUOTE (Jack @ Dec 10 2008, 12:39 PM) -Crude oil prices will plunge to US$20 per barrel as the global slowdown throws even China into a recession, predicts Philip Verleger of the Haskayne School of Business at the University of Calgary. Furthermore, he said Tuesday, the downturn will be so deep it will take three to four years for the global economy and energy prices to return to normal levels. -The US Energy Information Administration said in its monthly energy outlook it expected global oil demand to fall by 50,000 barrels per day in 2008 and 450,000 bpd in 2009--marking the first time since 1983 that year-to-year world oil demand has dropped.

-a survey of 200 oil and gas companies shows the oil price required to allow new oil projects to break even has climbed from about $18 US per barrel in 1999 to $60 in 2007 and an estimated $62 now. That average price rises to between $80 and $100 per barrel in difficult plays such as the oilsands.

http://www.calgaryherald.com/business/ener...6027/story.html


Great article...I personally think its a great time to buy oil stocks. I just purchased some oil ETF`s and may buy more if oil drops further. I do beleive in the peak oil theory and I cant see oil being at this price in 5 or 10 years from now. Im curious as to what others think on this subject.

 

[wealthyboomer]

QUOTE (stephen @ Dec 10 2008, 11:51 PM) Great article...I personally think its a great time to buy oil stocks. I just purchased some oil ETF`s and may buy more if oil drops further. I do beleive in the peak oil theory and I cant see oil being at this price in 5 or 10 years from now. Im curious as to what others think on this subject.

I agree, and there are some Canadian oil companies that are ripe for a takeover. We will have to see how that plays out as to if it will be a U.S. or China Company that does the takeover.

 

[RedlineBrett]

I wish I could put a huge tank in my backyard and fill it with shell 91 V power.

QUOTE (wealthyboomer @ Dec 11 2008, 01:12 AM) I agree, and there are some Canadian oil companies that are ripe for a takeover. We will have to see how that plays out as to if it will be a U.S. or China Company that does the takeover.

 

[wealthyboomer]

QUOTE (RedlineBrett @ Dec 11 2008, 02:06 AM) I wish I could put a huge tank in my backyard and fill it with shell 91 V power.
Use your basement!

 

[Jack]

I think an even better topic of discussion has to do with the last sentence I posted, which relates to the fact that the WTI price has to be around $80 - $100 for it to make economic sense to do business in "difficult" plays like the oilsands. That`s a pretty significant point. This means, in essence, that the price of oil needs to rise 100% from where it is today until the action starts picking up again (unless you`re Suncor or Syncrude).

Given the wild fluctuations in the price this year, I don`t think it`d really surprise anyone to see it rise to that level before, say, Christmas. But that`s probably not going to happen, and the price is probably going to stay relatively flat over the nearer term. If this is the case, what are the conequences for the region? What are the consequences for places like Fort McMurray and Grande Prairie? Sturgeon & Strathcona Counties have already experienced the pain of expected investment dollars either cancelled altogether or stalled, and I`m guessing that they`ll soon start to see their unemployment figures rise quite a bit (starting in March of `09). Same will probably go for the previously mentioned cities, Fort McMurray and Grande Prairie, those that are so heavily tied to the industry. It`ll be neat to see the resultant migration patterns as well, as one might expect some of the Newfies up in Fort Mac to head back home and experience a growing economy under strong political leadership in Danny Williams.

 

[Stephen1151]

QUOTE (Jack @ Dec 11 2008, 06:33 AM) I think an even better topic of discussion has to do with the last sentence I posted, which relates to the fact that the WTI price has to be around $80 - $100 for it to make economic sense to do business in "difficult" plays like the oilsands. That`s a pretty significant point. This means, in essence, that the price of oil needs to rise 100% from where it is today until the action starts picking up again (unless you`re Suncor or Syncrude).

Given the wild fluctuations in the price this year, I don`t think it`d really surprise anyone to see it rise to that level before, say, Christmas. But that`s probably not going to happen, and the price is probably going to stay relatively flat over the nearer term. If this is the case, what are the conequences for the region? What are the consequences for places like Fort McMurray and Grande Prairie? Sturgeon & Strathcona Counties have already experienced the pain of expected investment dollars either cancelled altogether or stalled, and I`m guessing that they`ll soon start to see their unemployment figures rise quite a bit (starting in March of `09). Same will probably go for the previously mentioned cities, Fort McMurray and Grande Prairie, those that are so heavily tied to the industry. It`ll be neat to see the resultant migration patterns as well, as one might expect some of the Newfies up in Fort Mac to head back home and experience a growing economy under strong political leadership in Danny Williams.



<H2 _counted="undefined">Oil rises above $46 on IEA report</H2>

11/12/08

By Alex Lawler

LONDON (Reuters) - Oil rose above $46 on Thursday after the International Energy Agency predicted global growth in oil demand would resume in 2009 and the Saudi oil minister said OPEC`s top exporter pumped less oil than expected last month.

World oil demand growth would return in 2009 after shrinking this year for the first time since 1983, the IEA, which advises 28 industrialized nations on energy policy, said in a monthly report. It also cut forecasts for supply outside OPEC next year.

"We knew the bad bits, demand down, but the supply downgrade was supportive," said Rob Laughlin of MF Global.

U.S. crude was up $2.83 at $46.35 a barrel by 1554 GMT (10:54 a.m. EST), after surging $1.45 to settle at $43.52 on Wednesday. European benchmark Brent crude was up $2.93 at $45.33.