The perfect storm may be about to start

[Gunfighter14e2]

I don't not believe this will bod will for this country as a whole. There is more to all of this than meets the eye,...

Rick Perry warns US energy sector on verge of 'massive collapse' due to coronavirus pandemic

Former Energy Secretary Rick Perry warned Tuesday on "Tucker Carlson Tonight" that the coronavirus pandemic has brought the United States' once-thriving oil and energy sector to the verge of a "massive collapse."

www.foxnews.com

 

[pmclaine]

I agree that the saudi/Putin oil war has created market conditions that threaten the survival of our domestic production.

Their war is the larger reason for falling oil prices and CV-19 has added to its impact.

Some US production has gone negative - the producers are paying to have their oil taken for refining/storage. They are betting that the oil war ends and prices increase before they have to shut down their logistical delivery systems. The cost of paying oil buyers to take their oil for X period of time being cheaper than shut down/restart of their operations. No guess how long they can do that.

Trump has stated he is going to buy all the cheap oil he can to refill the strategic reserve.

Ships are floating at sea filled with oil and no buyers.

US oil is cost effective I think at somewheres about $100/barrel market pricing.

I dont know what the outcome of this will be.

Right now the home heating oil/gas prices are the biggest pay raise many of us have had in a while.

Gas taxes are usually in a specified amount rather than a percentage so US and local govts wont be missing their pint of blood.

I think the bleakest outlook is that our domestic oil work force will face hard times.

Unlike the corona virus layoffs which should be limited to the period of social distancing these oil worker cuts will be longer term.

Kind of makes you wonder if we have been attacked by a very sophisticated strategic strike...

A. Destroy the US economy with Corona.
B. destroy US energy independence with an oil glut.

 

[Hound Dog]

US oil is cost effective I think at somewheres about $100/barrel market pricing.

From someone in the oil industry that is not correct. The highest break even we have ever had on our operations is in the 75 dollar a barrel range. We were still turning a profit the last year at around 55. Shallow wells in shale areas can probably turn a profit on even less. Since the crash in 14-15 there were numerous cost saving measures implemented, and have brought the break even way down.

 

[MotorOilMcCall]

It's a tough time to be in Oil & Gas... the company I work for has a heavy presence there, in fact, I was a product engineer out of college in that group.

This industry will rebound as quickly as it dropped. When this quarantine is over, people are going to want to get out, drive, fly, travel by any and all means possible. The Saudi's will fold... they can't afford to piss us off. We sell them too many arms, and give them too much cash (not sure why).

This too, shall pass.

 

[tomcatmv]

It may pass at least temporarily. I watched the Tucker/Perry interview and pretty much agree with the former Gov. but as I posted in another thread here somewhere, my brother is a refinery operator for Shell and he says it's all a slowly dying industry except for nat. gas and petro chem.

 

[brianf]

let them both bankrupt each other as we have cheaper fuel and products.

as they drain their reserves and use their reserve money we will be hurt.

but when it all shakes out in the end out economy is not oil based and will recover

once you burn your through your main product or your available cash there is no where to go

 

[whiskeytower]

I am also in the Oil & Gas its high time we told "The Kingdom" to stick it in their ass. At the same time I have no pity for these companies crying about going broke. I have watched the squander any and all profits time and time again, they play the "bankruptcy" game. Rename the company and take loads of debt and repeat the cycle. All the while screwing the rank and file on pay.

 

[Hound Dog]

It may pass at least temporarily. I watched the Tucker/Perry interview and pretty much agree with the former Gov. but as I posted in another thread here somewhere, my brother is a refinery operator for Shell and he says it's all a slowly dying industry except for nat. gas and petro chem.

I wouldn't base my entire view on Shell selling a refinery. The big oil companies have been getting out of the refining business slowly for decades. It is mostly from a liability stand point. Most big oil companies don't want there name on shit any more. All of this thanks to the Exxon Valdeez. Exxon still owns tankers and refinery's they are all just under a different name. All the oil companies are like this. They all hide their assets under different names so that a team of lawyers can't trace it back to the real play callers. Also Remember this is the same Shell that wasted a couple billion (yes billion with a B) dollars for that wild goose chase in Alaska about 8 years ago and come away with nothing but a black eye and a statement that "we didn't find nuffin". BP had to sell a lot of assets to cover the cost of the Macondo incident. The industry is contracting, yes, with cars getting better fuel economy and some switching to electric. However it will be decades before we have an all electric cars, if even then.

 

[pmclaine]

From someone in the oil industry that is not correct. The highest break even we have ever had on our operations is in the 75 dollar a barrel range. We were still turning a profit the last year at around 55. Shallow wells in shale areas can probably turn a profit on even less. Since the crash in 14-15 there were numerous cost saving measures implemented, and have brought the break even way down.

That is good to hear.

Hate to say it but you guys are in for some rough weather.

 

[kthomas]

I just left the oil & gas industry, my decision, and today is my first official day of not being employed.

First off, most projects are viable between $45-70/bbl. A lot of projects are profitable in the $45-55/bbl range. I don't think any company would take on a project that was only profitable at $100+/bbl. Oil doesn't stay at $100/bbl for long when it does get there, that would be a very poor fiscal decision to go ahead with a project like that.

OPEC is trying to get their market share back. Doing it while demand is down due to COVID-19 was the perfect time to implement their strategy of kicking NA O&G companies in the teeth while they're down. They'll bankrupt some companies, regain their market share and go back to controlling the oil prices. Russia and Saudi can't run like this forever, they are bleeding money right now. But they probably don't have to, it won't be long for some companies to go bankrupt, with how poor of a fiscal shape a lot of them were in before this crisis.

I will say that the O&G industry is its own worst enemy, and they operate in an extremely unsustainable way. The fiscal waste that comes with the major ramp up and ramp downs must be in the billions, but I've never seen a number attributed to it. The balance sheets of companies would be in much better shape if it wasn't for their greed and reckless behaviors that are shaped and steered by the shareholders. Bailing out these companies just enables their poor and reckless behaviors, let them sink from their own bad decisions.

The US needs to setup their own in-house oil market, with production limits capped to maintain an in-country oil price of ~$50-60/bbl. If you choose to produce more then your allotted cap, that's fine, but you are taking the risk of selling it on the volatile international oil market. We could make the oil industry really stable in the US, but I don't think the greed from the shareholders and executive committees of such companies would allow it to happen.

I've been in the O&G industry for over 10 years, and it's not a surprise the industry is in a lot of trouble. But the industry is its own worst enemy, and corporate greed has gotten the balance sheets to such bad shape that SA and Russia can wipe a few of these companies out. I'm going to be pissed if we bailout the O&G industry with our own tax dollars.

 

[footsteps]

I wouldn't put a gallon of foriegn crude thru any American refinery....Only USA OIL,then start with other country oil...keep our energy economy working.......

 

[Srgt. Hulka]

Looks like the Saudi plan is working perfectly.

 

[Gunfighter14e2]

Thinking about every thing that is going on in this country now, it seem to me someone gamed this out. Long ago we would be given a task, how it was completed mattered little. Most start at the on set but we always started at the end an worked backwards. How could we get the enemy to react that was the next logical step to them. I think someone or some group thought this threw 100%, an if we don't put a wrinkle into it they will get the end result their after. The game is still in play so the party is not over yet.

 

[W54/XM-388]

Something else to consider is the government has FORCED a lot of people out of their jobs.

Between that and public panic / wariness, a lot of small business are probably going to fold for good over the next couple months
Lots of workers will both loose their jobs and also have no jobs to come back to when they are allowed to go back to work.
Lots of common working folk will be facing loosing everything if this goes on for a long time

Meanwhile the rich get richer and the bankers get all they could ever want.
Once they can start repossessing houses and cars again, it's Welcome to the new Feudal states of America.

Sheeple begged for it... well they aren't going to like what they get.
The government is great at destroying an economy and driving everyone into poverty, but absolutely hopeless at doing the reverse.

 

[kthomas]

Something else to consider is the government has FORCED a lot of people out of their jobs.

Between that and public panic / wariness, a lot of small business are probably going to fold for good over the next couple months
Lots of workers will both loose their jobs and also have no jobs to come back to when they are allowed to go back to work.
Lots of common working folk will be facing loosing everything if this goes on for a long time

Meanwhile the rich get richer and the bankers get all they could ever want.
Once they can start repossessing houses and cars again, it's Welcome to the new Feudal states of America.

Sheeple begged for it... well they aren't going to like what they get.
The government is great at destroying an economy and driving everyone into poverty, but absolutely hopeless at doing the reverse.

This is what scares me the most about what is going on. The ramifications from shutting down society for weeks and months is going to be costly and lasting.

I don't think many people are looking at the big picture of what's going on. It's big time tunnel vision, and everyone seems perfectly happy for big government intrusion to keep them safe from the big bad scary Coronavirus. But I fear what happens next is going to be much worse for society then Coronavirus.

I think we are amputating our arm for a hangnail at the moment.

 

[BLEE]

Could our enemies take advantage of this world situation and collaborate, or act singly to destroy the US economy?
Could they individually, or together, attack the USA, in on multiple fronts, in many different ways?
The virus is tough, but should not be the primary concern. The virus should definitely be the immediate concern. I believe we are at our weakest, since before WWI.

 

[Lesch]

Seems like a democrap collusion with russia and the arabs to me and throw the kung foos in for good measure . The libs will stop at nothing to make our great President Trump look bad even if it means destroying the country while doing so. We are about to socialism already......just one step away.

 

[footsteps]

I bet the Chinese did this intentionally...... We had the best economic recovery in history, historic unemployment....... Now the entire world will do as we did during WWII Make all our own shit, be a sovereign industrial giant. They could give a rats ass if they killed 20 million to gain complete economic world wide superiority..... I say boycott Chinese products, food except ROAST PORK LOMIEN.

 

[Gunfighter14e2]

I bet the Chinese did this intentionally......

They are not that smart. However there are those on this rock that are, plus you add the deep state into the mix an they would have got all the inside info required. Then add the media's spin/assistance that we all have seen todate,....