Hey Oilfield Guys!!

[Shane]

Boone is long oil so he's just talking up his investment. The rest of the analytical community (including myself) think that oil stays below $40 for the rest of '16 and we don't get above $60 until 2018. It's a really tough market out there.

This is what I'm hearing as well, but I hope Boone is right instead. When oil was $100, the vast majority of the analysts thought it would never drop below $70 again. They may be right this time, but they're not always right.

[BrianL]

Many are saying we are going to see CHEAP oil($15-30), before we see average oil($35-55) return, and may be a long time before higher oil returns(60-70). Mainly depends if China stays like it is or worse, and Iran's oil comes on line at or above expected rates.

[Shane]

All the China hysteria is overblown. The main problem is the Saudis have increased their production as prices have fallen. They're trying to put US shale producers out of business, and they're also trying to starve Iran of oil money. They're playing a trillion dollar game of chicken. They have deep pockets, but they're also a one-trick pony with oil only. We'll see how long they can hurt themselves while they're trying to hurt everybody else.

[BrianL]

Last time it was about 20 years. I think the China deal is much bigger than people think. They have over built way more than most would believe.

Google China ghost cities.

[kyle1974]

This is an act of war. Intentionally trying to wreck a foreign economy is just as financially destructive as dropping bombs.

[rtp]

Last time it was about 20 years. I think the China deal is much bigger than people think. They have over built way more than most would believe.

Google China ghost cities.

I was over there quite a bit in the early 2000's....Long before Ghost cities were talked about, I was amazed at how many brand new buildings were completely empty and had never been used. Im not talking strip center type stuff either, Im talking skyscrapers, big industrial buildings, etc. They were everywhere.

[Artos]

Any thoughts on NG prices going up when these liquefying plants go online & we start exporting in bulk??

Lots of chatter of the Brownsville / CC-Bay City & La ports getting ramped up for this...also a new 42"+/- line going into Mex through deep south tx has a some talk of being able to move product.

[JTeLarkin08]

I've decided no one has a clue what is going to happen. The Saudis may decide tomorrow they are tired of losing money or they may keep this going until they go broke.

[Michael]

I've decided no one has a clue what is going to happen. The Saudis may decide tomorrow they are tired of losing money or they may keep this going until they go broke.

Bingo!

[RiverRat1]

http://finance.yahoo.com/news/why-the-plunge-in-oil-is-crushing-all-stocks-130629008.html#

Nope, oil has no affect on the economy LOL

[Shane]

Last time it was about 20 years. I think the China deal is much bigger than people think. They have over built way more than most would believe.

Google China ghost cities.

Yes, but they are an exporter. They import VERY little. In other words, they don't buy much from us, so they don't contribute much to our economy. In fact, China contributes just 0.7% to the US GDP (our economy). If China went completely out of business, our economy would still be growing.

In the late 80s when Japan started to have major trouble, everybody thought that was going to bring the whole world down. It didn't. Our economy boomed in the '90s while Japan has been in the toilet for decades. Japan was where lots of cheap things were being made back then. Today it's China. Tomorrow it will be somewhere else. We'll still be OK. China will not go completely out of business, but they will continue slow down. They can't keep up their fake economy by building empty cities, obviously. But they'll still use oil, and they'll still be building cheap stuff that other countries will buy. They'll have competition from other emerging market nations as well.

The oil markets will eventually rebound to a healthy level. When? Who knows? But China's slowdown isn't going to bring the global economy crashing down the way some people are saying. Mostly, they are just the current place to go for cheap labor and knockoff products. That's not a big position of strength or importance. The nations where real innovations happen have always been the strongest economies, and that will continue to be the case. There will always be ups and downs, even in the strongest economies, too. No way around the economic cycle.

The Saudis are the main problem with the oil market right now. It won't get any better until they're trillion dollar game of chicken ends with either them or the US blinking by cutting production significantly enough to dry up the supply glut. World demand is still very strong. China is slowly down some, but other emerging market nations are growing some. Ebbs and flows.... We just need the Saudis to slow down production. They've increased production as oil prices have dropped though. Bad for everybody, including themselves. But Muslims seem to like suicide bombers, I guess. Crazy.

[BrianL]

Yes, but they are an exporter. They import VERY little. In other words, they don't buy much from us, so they don't contribute much to our economy. In fact, China contributes just 0.7% to the US GDP (our economy). If China went completely out of business, our economy would still be growing.

In the late 80s when Japan started to have major trouble, everybody thought that was going to bring the whole world down. It didn't. Our economy boomed in the '90s while Japan has been in the toilet for decades. Japan was where lots of cheap things were being made back then. Today it's China. Tomorrow it will be somewhere else. We'll still be OK. China will not go completely out of business, but they will continue slow down. They can't keep up their fake economy by building empty cities, obviously. But they'll still use oil, and they'll still be building cheap stuff that other countries will buy. They'll have competition from other emerging market nations as well.

The oil markets will eventually rebound to a healthy level. When? Who knows? But China's slowdown isn't going to bring the global economy crashing down the way some people are saying. Mostly, they are just the current place to go for cheap labor and knockoff products. That's not a big position of strength or importance. The nations where real innovations happen have always been the strongest economies, and that will continue to be the case. There will always be ups and downs, even in the strongest economies, too. No way around the economic cycle.

The Saudis are the main problem with the oil market right now. It won't get any better until they're trillion dollar game of chicken ends with either them or the US blinking by cutting production significantly enough to dry up the supply glut. World demand is still very strong. China is slowly down some, but other emerging market nations are growing some. Ebbs and flows.... We just need the Saudis to slow down production. They've increased production as oil prices have dropped though. Bad for everybody, including themselves. But Muslims seem to like suicide bombers, I guess. Crazy.

I was talking about China as the second largest consumer of crude. Their slowdown will only further the supply, assuming they don't cut their own production, and increase imports.

[Shane]

I was talking about China as the second largest consumer of crude. Their slowdown will only further the supply, assuming they don't cut their own production, and increase imports.

Their consumption will slow some as their economy slows, but they're not gonna quit using oil altogether. Other countries will consume more this year than last though. Eventually, some/all producers will start to cut production. Maybe not this month or this year, but low prices will lead to lower production eventually. Not even the Saudis or Chinese or anyone else can hold out forever with high production and low prices. We're just waiting to see who blinks in the big game of chicken in the oil market.

I sure hope the Saudis blink soon.

[John Paul]

Well this is some headlines I ready this morning,

"Oil to Hit 70bbl by second quarter 2016"
"Oil is on the slide, 10bbl possible within weeks"
"80 WTI by first quarter 2017"
"2017 Oil will rebound to a break level of 45bbl"

Seriously, its almost comical now to read some of this stuff.

[gingib]

Well this is some headlines I ready this morning,

"Oil to Hit 70bbl by second quarter 2016"
"Oil is on the slide, 10bbl possible within weeks"
"80 WTI by first quarter 2017"
"2017 Oil will rebound to a break level of 45bbl"

Seriously, its almost comical now to read some of this stuff.

yep no one knows what is going to happen!

Anyone who claims they know is full of it