Slump In Oil Price, October 1, 2014 - December 31, 2016
Pricing, Part I
Pricing: Part II, The "Right Price" For Crude Oil
Pricing, Part I
Pricing: Part II, The "Right Price" For Crude Oil
The "right" price for OPEC, Brent, WTI oil means different things for for different "folks"
Saudi Arabia:
- historically able to manipulate prices due to relative "monopoly"
- one player: the state
- state owned, state controlled; completely different model than US, Canadian model
- price of oil is independent of cost of producing
- price of oil is correlated almost completely with the kingdom's budget
- over time, one would expect the kingdom's budget to increase (and, by extension, the price of Saudi oil needs to go up)
- expectations
- inflation
- military necessities
US/Canada
- historically, greatly affected by OPEC supply, pricing, strength of dollar
- free market capitalism; different model than Saudi's model
- many players; no state unity
- break-even point is only one factor
- more than just profit; also rate of return, cash flow, CAPEX
- mature operators vs new, growing operators
- trickle-down costs; as price of oil comes down, "cost" of components to produce oil come down
- mature fields vs new fields
The break-even point is somewhat irrelevant in big scheme of things for reasons I have discussed before.
OPEC's benchmark crude drops below $30 for first time in 12 years, January 7, 2016
Brent crude oil now less expensive than bottled water, December 11, 2015
Real oil prices, from 1983 to 2015
Brent hit 5-year low ($60) before rallying back to $62 -- December 15, 2014
Fracking, well completion delays -- December 13, 2014
Trickle down costs will lower break-even prices; welders earning $100/hour during boom -- December 11, 2014
Break-even points for various locations in the Bakken -- December 11, 2014
Note break-even points for plays in the US -- December 10, 2014
Updates
OPEC's benchmark crude drops below $30 for first time in 12 years, January 7, 2016
Brent crude oil now less expensive than bottled water, December 11, 2015
Real oil prices, from 1983 to 2015
Brent hit 5-year low ($60) before rallying back to $62 -- December 15, 2014
Fracking, well completion delays -- December 13, 2014
Trickle down costs will lower break-even prices; welders earning $100/hour during boom -- December 11, 2014
Break-even points for various locations in the Bakken -- December 11, 2014
Note break-even points for plays in the US -- December 10, 2014
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