# Oil



## Butters (Apr 20, 2012)

Obviously some of us are heavy or excited about oil prices. 
To our demise they keep going lower. 

I heard on the news Saudi is pressuring the prices lower so Iraq can't earn as much profit. 

Someone was holding it at $80 but gave up. 

Iraq is working on creating nuclear bombs and the slowdown in their oil profits will slow down their bomb making. 

Eventually Russia or some other country will bomb Saudi reserves of oil because they want their oil profit. 

But shouldn't we look at the bigger picture and help stop Iraq?

On a side note,
Anyone want to throw out a guess of how long we will stay around $75

I think for sure for another month if not 2. But in march/April 2016 it will start climbing back, and fast! Oil will still be around for the next 10 years minimum!


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## HaroldCrump (Jun 10, 2009)

We have been discussing all of these topics under the Canadian Oil Sands thread.
Would you please agree to continuing the discussion there?

Thanks.


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## rikk (May 28, 2012)

Better still, move the oil discussion here, to oil ... just a wild and crazy thought


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## Butters (Apr 20, 2012)

I totally agree that the oil discussion needs to be out in the open, not tucked away in one individual stock. There are people discussing LRE and other stock threads. Consolidate all oil talk into 1 thread. Whether it's here or in the general discussion it does not deserve to be in an INDIVIDUAL stock discussion.

Anyways I'm just interested in people opinions of oil. I believe this is a legitimate place to post.


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## sags (May 15, 2010)

If I had to guess at a price..........given the increasing production and falling demand, I would say oil is going lower.......much lower.

OPEC used to be able to manipulate the price, but have much less power today as countries around the world have developed their own oil industries, and are flooding the market.

The Saudis can cut off the supply of the cheapest to produce oil to support a higher price, but it would benefit other producers.

Given their dependence on oil revenues (80% of their budget revenue), I don't think they would sacrifice themselves for very long.


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## HaroldCrump (Jun 10, 2009)

sags said:


> Given their dependence on oil revenues (80% of their budget revenue), I don't think they would sacrifice themselves for very long.


They have dug in their heels for 1 - 2 years.
*They have said so openly.*
Note that they have higher forex reserves than most other oil producers, incl. Russia.










What would be interesting to look into is whether Saudi Arabia might have increased their rate of USD purchases leading up to the price drops.
That'd imply that this was a planned, synchronized move with the full knowledge and backing of the US State Dept.
The data for US treasury purchases is available from the Commerce Dept., I believe, but that may not be reliable since these purchases would have been done through subsidiaries.


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## HaroldCrump (Jun 10, 2009)

zylon said:


> SB - never mind the HairyGrump; he obviously has too much time on his hands these days


Oh look who's back...ran out of your supply of Prozac, or did your rocking chair finally break?

I wrote out my opinions because people asked...if it's not valued, I'll simply keep it to myself.
Sorry I didn't feel like re-typing all of that in yet another thread on oil.


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## HaroldCrump (Jun 10, 2009)

Yeah, well, I don't see you write or contribute in any manner...so I guess we can see who is lazy.
Anyway, you & SB can own this thread.
I have nothing more to say.

It is also clearly documented now who made a completely unprovoked and unjustified slur.
My request to SB to continue the discussion on the other thread was totally polite and well intended.


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## supperfly17 (Apr 18, 2012)

HaroldCrump said:


> Oh look who's back...ran out of your supply of Prozac, or did your rocking chair finally break?
> 
> I wrote out my opinions because people asked...if it's not valued, I'll simply keep it to myself.
> Sorry I didn't feel like re-typing all of that in yet another thread on oil.


I enjoy reading your responses. Thank you.


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## 1980z28 (Mar 4, 2010)

I also enjoy your opinions and outlook

Great job

HaroldCrump


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## GOB (Feb 15, 2011)

Harold, your input is appreciated but it does make sense to have an oil discussion in the general investing section and not in an individual stock thread. We don't have to repeat anything. Maybe OP can put a link to the COS thread in the first post and we can continue general oil discussion over here.


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## HaroldCrump (Jun 10, 2009)

zylon said:


> Awwwww .. did I hurt your feelings?


No, I was simply taken aback by a completely unprovoked, unexpected slur against my name.
I don't recall if there is any history or issues with you, but then you have been gone a long time...


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## HaroldCrump (Jun 10, 2009)

GOB said:


> Harold, your input is appreciated but it does make sense to have an oil discussion in the general investing section and not in an individual stock thread. We don't have to repeat anything. Maybe OP can put a link to the COS thread in the first post and we can continue general oil discussion over here.


Okay, fair enough, so the right response is simply for the OP (SB) to say that no, I want me own Goddarn Oil thread...
It isn't as if there is any dearth of oil threads...I mean everyone is starting a new one every few weeks.
Following is just a small subset of them...

*Investing in oil and gas *
*Dazed and confused about oil*
*Chinese Investors Leaving Oil Patch *
*Fracking oil is safe? *
*How to learn about oil *
*Best Oil Company Stock? *
*Is now a good time to buy Oil & Gold? *
*Is Oil Heading in The Nat Gas Direction?*
*oil*
*oil*
_*Oil ETF?*_
*Is Oil a Buying Opportunity ? *
*Oil *


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## Butters (Apr 20, 2012)

Ahh thanks guys always wanted my own thread. <3

Thanks for the input zylon. Looks like oil will go lower than I expected and will take longer to recover. In a year from now back to normal. I'm glad I sold half my suncor Friday, but still stuck with the other half.

Now what happens to the workers in fort Mac? The cost of employees up there is too much, I heard as much as $75 a barrel costs. They will probably start slowing down there, Alberta is going to get hurt big by this, I wonder if it's enough for some of the riggers to sell their houses. 

Any of you guys like any transport companies


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## AltaRed (Jun 8, 2009)

With that kind of thread proliferation, it seems to be a lack of poster discipline, or perhaps moderation to merge/combine threads.


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## humble_pie (Jun 7, 2009)

SheaButters said:


> Ahh thanks guys always wanted my own thread



a minority of posters do seem to have the idea that they continue to possess any threads they initiate, but me i would not support this.

me i believe that every topic, once debuted in a maiden post, thereafter belongs to the entire forum. An OP has no veto or editing rights (if he did, he would have to be given moderators' powers, no?)

but, all things considered, it was a good idea to walk the oil thread over here, for as long as it will survive.


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## Rusty O'Toole (Feb 1, 2012)

Thanks for the info on oil. Am not familiar with Martin Armstrong although I have heard the name. Is he considered a reliable source, a shill, a stuffed shirt or what?


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## relk19 (Mar 13, 2014)

SheaButters said:


> Any of you guys like any transport companies


I have been eyeing TMA for a while now. Kicking myself I didn't get in when they were at $6.10


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## AltaRed (Jun 8, 2009)

SheaButters said:


> Now what happens to the workers in fort Mac? The cost of employees up there is too much, I heard as much as $75 a barrel costs. They will probably start slowing down there, Alberta is going to get hurt big by this, I wonder if it's enough for some of the riggers to sell their houses.


It depends. The big projects under construction will continue due to sunk costs. This is the bulk of the action around Fort Mac. Most of the companies there have deep pockets and excellent balance sheets. Think CNQ with Horizon, Imperial with Kearl, Suncor with Fort Hills as examples.

Smaller in-situ projects and pad well drilling can easily be deferred/cancelled at some point once contract obligations are fulfilled. That will affect the likes of Bonnyville and Cold Lake more that Fort Mac. Lots of shale oil, conventional light, conventional heavy drilling can be deferred indefinitely and that will affect all the service companies from drilling to fracing to vacuum trucks to transport trucks. I don't think I would be buying onto Trimac or Gibson right now.

To the extent current oil prices postpone/defer drilling, that will be a good/necessary breather in an overheated AB economy. It has been freaking ridiculous.


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## sags (May 15, 2010)

Would the falling oil price exasperate the problem of having oil projects for sale and no buyers ?

I believe that was quoted as the reason Alberta recently lobbied the Federal Government for more relaxed foreign investment rules.

But I also read that Chinese investors were packing up and going home, and if true there may not be a lot of interest from foreign investors.

It seems the news is all over the place.........

Foreign investors are leaving........foreign investors want in.....

Falling prices are good for the economy.........falling prices are bad for the economy.

It doesn't appear there is a consensus on anything..........including why the price is low.

I am thinking though, if low prices continue for awhile........it will be like other times, and workers will be sent home.

It wasn't that long ago was it........that a lot of workers from Newfoundland went to Alberta to work in the oil patch.....and a lot of them were laid off and returned home a few years later.

Newfoundland had their own boom.............and Alberta had a tough time getting workers to come back out.

Hence........some of the skilled labor shortages that happened when the Alberta boom resumed.


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## Oldroe (Sep 18, 2009)

Looks to me like the Saudis are making oil cheap to stop Canada from building both pipelines.


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## the-royal-mail (Dec 11, 2009)

It is very ironic that zylon accused Harold of having too much time on his hands given the past nature of zylon's threads which seem more of a time waster than anything else. The idle minds & 'use CMF as your personal coffee shop' concepts etc.

And for the record, I agree with HC that there are too many repetitious threads going on, not just about oil but about a lot of topics. Moderators in the past did a much better job of keeping threads merged and relevant. Makes it easier in the future when reviewing the threads and searching. Forums can very quickly turn into a big mess and troll fest if moderators do not keep things organized.

Please keep these things in mind when participating and starting threads in a large financial forum such as this.


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## CPA Candidate (Dec 15, 2013)

My only comment on the price of oil is fear and speculation are running rampant right now. The selling pressure is intense and irrational. According the G&M website, WTI futures were flat on the day. A few oil stocks declined by nearly 10%, even majors were down sharply. The fact that many companies also produce natural gas is completely ignored by the market, along with the fact that natural gas is rising quickly leading into heating season. This is not a well reasoned response; it's knee jerk.

The only conspiracy theory I haven't heard yet is one involving the saucer people.

I can tell from working on budgeting programs that companies just don't go and change long term plans based on short term events, and in fact many times they can't because the projects have so much inertia once they get going. It's important to separate the way the market functions from the way that businesses do.

Anyway, all you can do as an investor is try to be an island of composure in a sea of madness. Don't worry about quotes, concentrate on the facts and the financial statements, and think like a business owner.


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## gibor365 (Apr 1, 2011)

Oldroe said:


> Looks to me like the Saudis are making oil cheap to stop Canada from building both pipelines.


Saudis making oil cheap to destroy other oil producers ... they just declared oil "jihad"
and I won't be surprised if they also shorting NA oil stocks


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## humble_pie (Jun 7, 2009)

CPA Candidate said:


> My only comment on the price of oil is fear and speculation are running rampant right now. The selling pressure is intense and irrational ... natural gas is rising quickly leading into heating season. This is not a well reasoned response; it's knee jerk.
> 
> ... all you can do as an investor is try to be an island of composure in a sea of madness. Don't worry about quotes, concentrate on the facts and the financial statements, and think like a business owner.



i for one believe it's important to look at all sides of a story. The oil sector plunge is a huge story. For some time now i've been mindful of the warnings of a wise & oil-sector experienced cmf forum member to regard King Balance Sheet.

in a prolonged period of low oil prices, it's even irrelevant to fret about dividend sustainability. The key question in said prolonged period will be survival of heavily indebted companies.

in another thread, i raised the example of OIL, a TSX institutional favourite in 2008 when it suddenly & precipitously went bankrupt over north sea exploration debt via its scottish banker. Details omitted here, however little Oilcos are dotted all over the map today.

there was a unique & fascinating post in cmf forum this morning, analyzing some of the global drivers that are depressing the resource sector right now. Because it's edgy, original, the author wasn't paid by anybody to write his text although he is an economist who has taught at US universities, i for one think his message is more valuable than anything one might find in mainstream media.

on balance, he concludes that the saudis are not conspiring to wreck washington & long-term the world is going to get over this big hiccup.

not saying i totally agree or even know, but i can draw from the messages of these 2 fellow members that these are no times to sit contentedly by the fire, TCB & crooning to oneself that nothing is wrong.


http://canadianmoneyforum.com/showthread.php/10092-Goldcorp-(G)?p=425457#post425457


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## fatcat (Nov 11, 2009)

Rusty O'Toole said:


> Thanks for the info on oil. Am not familiar with Martin Armstrong although I have heard the name. Is he considered a reliable source, a shill, a stuffed shirt or what?


he's a regular on michael campbell's money talks show ... enough said ... he doesn't actually manage money nor is he an oil analyst ... he's just another guy with an opinion

oh, yeah and he has his own theory of cycles



> The Economic Confidence Model is an economic cycle theory by Martin A. Armstrong. Armstrong proposes that economic waves occur every 8.6 years, or 3141 days, which is Pi X 1000. At the end of each cycle is a crisis after which the economic climate improves until the next 8.6 year crisis point. The model has been profiled in The New Yorker,[1] Time magazine,[2] Financial Times[3] and Barrons[4] due to what appeared to be accurate predictions.


i give him credit since he makes his money selling his opinions thus he doesn't need to actually _invest_ any money ... smart


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## sags (May 15, 2010)

Some believe there is a coordinated effort by the US and Saudis to put pressure on Russia by lowering oil prices.

It might have some merit.........as the Russians have become more active sending military aircraft near NATO countries.

There was recently the first "intrusion" into NATO airspace since the end of the Cold War.

The Russians are causing a ruckus.............as they fly along and cause each country to send up their own fighters to monitor them.

Maybe the Russians are sending their own message.

http://www.reuters.com/article/2014/10/29/us-nato-russia-exercises-idUSKBN0II27S20141029


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## sags (May 15, 2010)

Will the Keystone Pipeline pass now that Republicans control both the Senate and Congress ?

Jason Kenney seems to think so as he tweeted this on the election results.......

_"Good news for Canadian jobs & economy," the employment minister tweeted. "It looks like the new US Senate will have the 60+ votes needed to ensure that Keystone XL is approved."_

I guess he doesn't realize President Obama has the power to veto any bills. The Republicans lack the votes required to override a veto.

Maybe Keystone will get passed and Obama will sign the bill.......but it seems imprudent for the Canadian government to get too happy publicly that Obama and the Democrats got royally kicked in the butt.

They might be a little "sensitive" about it for awhile.........


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## HaroldCrump (Jun 10, 2009)

I agree sags, it was distasteful of Minister Kenny to come out in those terms.
The Harper administration needs to be circumspect in their open display of emotion at the GOP win...after all, Obama is still President.
Secondly, there is no guarantee that Democrats will lose the White House in 2016 - it is possible that the White House can stay Democrat.
Our official position should be agnostic and muted.

As for Keystone XL, it is almost a guaranteed certainty that if the GOP try to push the issue, Obama will veto it.
The GOP does not have more than the 2/3rd majority required in the Senate to veto the veto.


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## CPA Candidate (Dec 15, 2013)

humble_pie said:


> there was a unique & fascinating post in cmf forum this morning, analyzing some of the global drivers that are depressing the resource sector right now. Because it's edgy, original, the author wasn't paid by anybody to write his text although he is an economist who has taught at US universities, i for one think his message is more valuable than anything one might find in mainstream media.
> 
> on balance, he concludes that the saudis are not conspiring to wreck washington & long-term the world is going to get over this big hiccup.
> 
> ...


That's the kind of top-down macroeconomic geopolitical analysis that I pay zero attention to because it is notoriously unreliable. Remember Jeff Rubin and his $200 barrel of oil predictions, circa 2008.

I do know oil is a finite resource and over time more and more of it will be demanded by an ever growing world population. 

_"I don't have any proof, of course, and it's not possible to prove this.
Just bits and pieces of news, statements, innuendos, etc. gathered from news articles."_

Exactly.


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## HaroldCrump (Jun 10, 2009)

CPA, I didn't make any investment recommendations at all.
I just find this stuff interesting, that's all.
Geo-politics has a big impact on the success of investments, esp. when it comes to strategic commodities like gold, oil, etc. vs. say a local construction company or retailer.
For instance, the fortunes of Canadian pipeline operators like TransCanada and Enbridge that have been bogged down in geo-politics and local environmental issues for years.



CPA Candidate said:


> I do know oil is a finite resource and over time more and more of it will be demanded by an ever growing world population.


Where did I say that's not true?

Anyway, you don't need to pay any attention, of course.


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## AltaRed (Jun 8, 2009)

HaroldCrump said:


> As for Keystone XL, it is almost a guaranteed certainty that if the GOP try to push the issue, Obama will veto it.
> The GOP does not have more than the 2/3rd majority required in the Senate to veto the veto.


As I understand it, several Democrats will cross the floor to vote with the Republicans on Keystone. Not much love lost between many Democrat senators and the White House. That is how they get to the 60% or 67% (whichever it is). That said, I am starting to think Keystone XL may be past its prime. Perhaps TRP should be focussing on going only so far as the Dakotas to pick up all that shale oil growth. That would provide a lot of relief on the rail system for Canadian crude. The big players are building extensive rail terminals in the Edmonton area as I write this.


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## Zoombie (Jan 10, 2012)

*Martin Armstrong*



fatcat said:


> he's a regular on michael campbell's money talks show ... enough said ... he doesn't actually manage money nor is he an oil analyst ... he's just another guy with an opinion
> 
> oh, yeah and he has his own theory of cycles
> 
> ...



I have enjoyed reading Martin Armstrong's work over the past few years while he was (is?) in prison for (fraud? insider trading? I can't remember). I read more for the entertainment than to trade on his opinions but it is neat to see that he is still trying to get his work out there while behind bars. 

The guy is definitely a bit of a nut though, and most of his articles predict the sky falling...


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## fatcat (Nov 11, 2009)

Zoombie said:


> I have enjoyed reading Martin Armstrong's work over the past few years while he was (is?) in prison for (fraud? insider trading? I can't remember). I read more for the entertainment than to trade on his opinions but it is neat to see that he is still trying to get his work out there while behind bars.
> 
> The guy is definitely a bit of a nut though, and most of his articles predict the sky falling...


fair enough ... he is one of those guys that bases investment advice on politics ... he appears on michael campbell's show along with a host of other guys who tend to be a) permabears b) goldbugs c) market timers and most of whom don't even manage or invest money 

i used to love reading these guys, they are entertaining but i finally realized that they were costing me a _lot_ of money because their investing advice is generally awful since, as i say, it often is connected to their political beliefs ... if i listen to them long enough i essentially need to get under my bed and wrap my arms around my ar-15 and my pile of gold coins

anyway, i love to listen to marc faber and jim rogers, these guys are cut from the same cloth

there is good money in glom and doom (as marc faber would attest)


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## supperfly17 (Apr 18, 2012)

Its quite interesting to see the TSX bounce up and down on a daily basis, as the oil drops or the price goes up. One day -150pts next day +150pts,and so on, so volatile.


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## HaroldCrump (Jun 10, 2009)

supperfly17 said:


> Its quite interesting to see the TSX bounce up and down on a daily basis, as the oil drops or the price goes up. One day -150pts next day +150pts,and so on, so volatile.


This phenomenon is known by the highly technical term called "Dutch Disease" :biggrin:


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## Greyhound86 (Feb 21, 2010)

I found it interesting that Continental Resources decided to take the profit on their hedges rather than hold them. 

http://www.reuters.com/article/2014/11/05/contl-resources-results-idUSL1N0SV3OR20141105 

I am guessing they thought they better take the $430 million gain believing that oil prices are going to go up in the next 2 years and the gain would disappear.


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