# End of OPEC and 20 $ oil



## 1980z28 (Mar 4, 2010)

https://research.tdwaterhouse.ca/re...ticle/1413-A922509-1F5U78NN8T1Q7PKCC0UA4PRA04


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## sags (May 15, 2010)

Low oil prices are going to have a big negative effect on economies around the world, and it isn't the only commodity with low prices.

Crop prices have fallen 50%, and declining receipts from the business of agriculture will add to the economic slowdown.

John Deere is laying off 900 workers. Fertilizer use will decline. Farmers will be fortunate to earn a profit on their crops.

What we have is a confluence of events, that appear to be building into a storm of negativity.

A rising tide lifts all boats.................but when the tide goes back out, all the boats settle back into the mud.


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## carverman (Nov 8, 2010)

Fearmongering....which may cause massive selloffs in oil futures.

The Arabs will survive..they can pump oil out of the desert for $6 a barrel, their cost.
Big oil will survive...we are too dependent on oil these days to go off it.. ships, jets, trucking, construction equipment,
home heating in some cases, industrial use (plastics), and hundreds of millions of gas guzzling cars out there,
will ensure that profits will still be made by some. 

The question remains what happens to the Alberta tar sands project if oil drops much lower.


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## uptoolate (Oct 9, 2011)

I guess the Oil Sands get moth-balled until economically feasible again. That would be the logical thing I would think... 

I always thought that low oil, and commodity prices in general, where good for growth in the global economy. Not so much for the petro-states but they have their times too. Ya dance with who brung ya... unless you're smart enough to diversify (or don't let yourself become undiversified)


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## Chris L (Nov 16, 2011)

If oil goes to $20, I'm going to buy all the oil tankers.


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## nobleea (Oct 11, 2013)

carverman said:


> Fearmongering....which may cause massive selloffs in oil futures.


Could certainly be self serving interests.

History has shown that 9 times out of 10, when an analyst or talking head says 'This time it's different' it ends up being not different and history repeats itself with massive winners and losers on both sides of that bet.

""It looks exceedingly unlikely for OPEC to return to its old way of doing business," Morse wrote. "While many analysts have seen in past market crises 'the end of OPEC,' *this time around might well be different*," Morse said."


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## Charlie (May 20, 2011)

Link is asking me for log in info and password.

Could you post your account number and password, 1980? Or maybe a different link....your choice .


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## zylon (Oct 27, 2010)

Charlie said:


> Could you post your account number and password, 1980?


User name: Dr Ben Dover
Password: eversoslightly


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## CPA Candidate (Dec 15, 2013)

At $20 every oil producer in the world is bankrupt. The Saudi's oil profits need to pay for the majority of societal spending, looking at it from profit per barrel is missing a big part of the story. Not to mention their oil fields are aging/depleting.


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## Chris L (Nov 16, 2011)

CPA Candidate said:


> At $20 every oil producer in the world is bankrupt. The Saudi's oil profits need to pay for the majority of societal spending, looking at it from profit per barrel is missing a big part of the story. Not to mention their oil fields are aging/depleting.


Exactly. I've been saying this for a while now. $20 oil is not going to happen.


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## gardner (Feb 13, 2014)

CPA Candidate said:


> The Saudi's oil profits need to pay for the majority of societal spending


What societal spending? Beheading troublemakers and oppressing the female population is cheap. The Afghani Taliban showed that it can be done on a shoestring.



> Not to mention their oil fields are aging/depleting.


While this must be true, there are no official signs that the Saudi reserves are in any way depleting. This is a fiction borne from the OPEC mechanism for setting quota based on reserves, so there is no incentive to report actual reserves. Even so, their reserves are undoubtedly very substantial, even over a decade or quarter-century time-scale -- certainly they can hold out many times longer than any exotic shale/bitumen/frac/offshore/condensate producers can hold out.


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## Chris L (Nov 16, 2011)

Whaaaat?

You think beheaders can reliably supply oil? Soon as the nut jobs think they can run a company, oil is going to $200 a barrel. Not placating those who toil in the oil will lead to instability in oil. i.e. WAR. We all know what happens in war...

So yeah, let's bring on $20 oil, starve SA and it's population and see where oil ends up as a result. Countries are already suffering with $50 oil, what do you think $20 oil looks like? Massive disruptions like this will guarantee higher oil. The bigger the insult, the greater the eventual upswing.


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## gardner (Feb 13, 2014)

Chris L said:


> You think beheaders can reliably supply oil?


Nope. That part is done by Bangladeshi slave-labour.


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## tenoclock (Jan 23, 2015)

Saudi Arabia also earns a lot of revenue through the annual Muslim pilgrimage. The number of pilgrims keeps on increasing every year, and with the expansion of the holy sites to accommodate millions more, their revenue streams are pretty much safe. And not to forget that the Royal family has heavily invested in foreign companies based in Europe and North America which no doubt are going to get a boost from low oil prices. So SA is more diversified that people think.


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## tenoclock (Jan 23, 2015)

gardner said:


> Nope. That part is done by Bangladeshi slave-labour.


There is no 'slave labor', South Asians are paid multiple times more than they could ever earn doing something similar back home.


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## uptoolate (Oct 9, 2011)

Tenoclock, I'm guessing that you have never worked in the middle-east. And Israel wouldn't count.


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## tenoclock (Jan 23, 2015)

uptoolate said:


> Tenoclock, I'm guessing that you have never worked in the middle-east. And Israel wouldn't count.


I have actually lived in Riyadh (and Dammam) Saudi Arabia, my father worked 12 years there, and half my family is working in various GCC countries - and no, not in Israel. You underestimate the staggering poverty that is rampant in South Asia, and for many workers who go to the Middleeast, it's only because they can earn more in 2 years than they could earn in their whole lifetime back in their home countries - all tax free. Skilled or unskilled labor, professional or not, the Middle East is the go-to destination for them. 

If getting paid more than you can ever earn in your life is slavery, then what is not slavery? The Arabs offer no citizenship to these people, but then they also do not tax their earnings.

Most of the oil companies (or any company for that matter) in GCC countries are not run by idiots from the desert, they are run by highly educated Americans, Canadians, Europeans, Asians who are compensated accordingly. The uneducated Arab generation was a thing of the 80's - most of the current generation of Arabs are western educated, and they are not stupid. So if anyone thinks that those oil companies are not going to make a profit at low oil prices because of bad management, that's simply a myth. 

Cheers


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## uptoolate (Oct 9, 2011)

Ah credit to you then, although living is not working and looks are often deceiving. My experience was perhaps not similar to your father's and my perception certainly not yours. If you have no rights and minimal freedoms, if you can't come and go as you please, if someone else holds your passport, if you can be jailed without cause or charge then you are not much more than a slave. Being paid a wage that is so small as to be inconsequential to the people who 'employ' you barely changes one's status but yes I suppose it does. How little one can earn or how dire one's circumstance in one's home country doesn't justify the treatment received in my mind. But life is hard and I am probably just naive.


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## tenoclock (Jan 23, 2015)

I think this is simply due to cultural differences. Most Asians I know are there to make money, not to have fun or enjoy freedom as we know it in the west. They know that earning a lot of money will allow them and their families more freedom to live their lives back in their home countries, so most of them are not bothered with these issues.

And I can't comment on how much the employer makes. Walmart makes billions in profits yet most of the workers are minimum wage. I don't have a problem with that. It's capitalism, and I am a capitalist. That's how you run businesses and that's how we become competitive.


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## uptoolate (Oct 9, 2011)

I'll agree to disagree if you will.


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## sags (May 15, 2010)

The Saudis don't appear to be overly worried about budget shortfalls.

They increased their budget this year, despite the oil price decline, and have stated they can manage just fine for a couple of years with low prices.

They can if they wish, extend their ability to withstand low prices out further, by cutting their budgets in the future, acquiring some debt, or selling some of their worldwide assets.

High cost producers will not be able to out wait the Saudis.


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## Chris L (Nov 16, 2011)

Ceasefire in Russia/Ukraine. Now we'll see oil recover....that is, if the oil rout was meant to crush Russia. I have my doubts. But the markets should like that.


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