Russia

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Originally Posted by Guisslapp

Just teaching you how the global oil market works.

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So! we are to believe the price skyrockets and the Chicoms would be willing to pay the ultra-high price just to help Putin. Got it...:icon_roll:

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Originally Posted by dawg80

So! we are to believe the price skyrockets and the Chicoms would be willing to pay the ultra-high price just to help Putin. Got it...:icon_roll:

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No, they buy it because they need oil - not because they prefer to pay more. China imports oil. If the market price for oil goes up, they pay more. Russia gets more.

BofA Securities sees a pathway to $200 oil if sanctions are imposed on Russian oil.

Does that price stay that high if we start producing again? If we can export to other countries cheaper and use our own supply instead of buying Russian?

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Originally Posted by techman05

Does that price stay that high if we start producing again? If we can export to other countries cheaper and use our own supply instead of buying Russian?

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Oil is priced on a global market, regardless of what country it is coming from.

The only thing holding production back is that producers have found a new sense of capital discipline. After 10 years of destroying shareholder value because of poor capital discipline, producers are now responding to shareholder demands not to drill so much. Oil production is a relative long term capital investment (outside of places like the Permian), so you don’t produce based on what the price is today but what you believe the sustainable future price is.

When oil futures turned negative last year, many producers took on tens of billions in debt to stay alive. These same companies are more focused on repairing their balance sheets than going in all our investment mode.

Rig counts are going up.. Still way down from years ago.. Mom and Pop O&G can't pass up 110/bbl oil.. Problem is small companies can't find leases. There are many oil and gas companies that could increase production by spending a little bit on existing wells and recompleting them. With prices at this level, easily pay for a recomplete.





US Rig Count


650.00 for Wk of Feb 25 2022 Up from 420's a year ago. but less than 900+ rigs in 2019.

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Originally Posted by Guisslapp

Oil is priced on a global market, regardless of what country it is coming from.

The only thing holding production back is that producers have found a new sense of capital discipline. After 10 years of destroying shareholder value because of poor capital discipline, producers are now responding to shareholder demands not to drill so much. Oil production is a relative long term capital investment (outside of places like the Permian), so you don’t produce based on what the price is today but what you believe the sustainable future price is.

When oil futures turned negative last year, many producers took on tens of billions in debt to stay alive. These same companies are more focused on repairing their balance sheets than going in all our investment mode.

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Then why does your guy seem to think that releasing 30mm bbls from the US Strategic Reserve is going to make a difference in the price of a gallon of gas at the pump? That's less than 2 days consumption for U.S.

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Originally Posted by FriscoDog

Rig counts are going up.. Still way down from years ago.. Mom and Pop O&G can't pass up 110/bbl oil.. Problem is small companies can't find leases. There are many oil and gas companies that could increase production by spending a little bit on existing wells and recompleting them. With prices at this level, easily pay for a recomplete.





US Rig Count


650.00 for Wk of Feb 25 2022 Up from 420's a year ago. but less than 900+ rigs in 2019.

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Yes, rig counts are going up but they are lower than pre-pandemic. And according to some demand forecasts, oil demand this year could be greater than 2019. That means higher prices.

Producers could drill more if they wanted to. One look at the 10 year XOP (oil producers ETF) chart will show you why producers have adopted a new religion. “Drill baby drill” crushed shareholder value over the past 10 years.

If O&G is a long game, then why does Biden shutting off drilling and the action of the Russians have an effect today? Shouldn’t the prices change 4-5 years from now?

If there are 2 producers of winter gloves in the market who sell gloves for $10 and I come along and flood the market with gloves if equal quality for $6, then the other producers have to lower their price or go out of business. Why wouldn’t oil work the same way? Genuinely asking because I just do simple supply and demand in my business with good success. Not complicated world markets.

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Originally Posted by techman05

I definitely don’t think he has been beaten at this point. I was just asking if his damaged ego would make him more dangerous if he is pushed out of Ukraine.

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I would think so.

At some point Putin is going to have to be given an off ramp to what he has started. That off ramp won't be surrendering to the international community and just leaving Ukraine and admitting he made a mistake. I highly doubt he will be willing to do such a thing. If that's his only option, expect the killing to continue.

We need a skilled negotiator working on this. Please don't send John Kerry.

Perhaps we should just do what we've been doing and let the Europeans lead and run this show. Allowing the Biden administration to do it might result in a nuclear war.

Logically, if sanctioning Russian oil would just cause them to sell more to the Chinese, then the global supply of oil does not change at all and the price should not go up because of it. Saying that Russia would get more money by having their oil sanctioned is a talking point being pushed that makes no sense at all.

That's a global perspective.

Morally, we are giving Russia money to kill Ukrainians by buying Russian oil.

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Originally Posted by DawgyNWindow

Logically, if sanctioning Russian oil would just cause them to sell more to the Chinese, then the global supply of oil does not change at all and the price should not go up because of it. Saying that Russia would get more money by having their oil sanctioned is a talking point being pushed that makes no sense at all.

That's a global perspective.

Morally, we are giving Russia money to kill Ukrainians by buying Russian oil.

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Don't use logic around Goosey, makes his pea-sized brain explode.

American companies that have been importing oil from Russia, did not import any Russian oil last week and will not import Russian oil in the near future. This was just reported by a guest on Fox news.

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Originally Posted by DONW

American companies that have been importing oil from Russia, did not import any Russian oil last week and will not import Russian oil in the near future. This was just reported by a guest on Fox news.

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Thank heaven for American businesses. At least somebody is leading.

Actually UK businesses also. BP and Shell are liquidating their interests in Russian oil and gas.

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Originally Posted by DawgyNWindow

Logically, if sanctioning Russian oil would just cause them to sell more to the Chinese, then the global supply of oil does not change at all and the price should not go up because of it. Saying that Russia would get more money by having their oil sanctioned is a talking point being pushed that makes no sense at all.

That's a global perspective.

Morally, we are giving Russia money to kill Ukrainians by buying Russian oil.

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Commodity prices are set by speculators in a market that operates on things other than logic, including emotion.

We saw oil prices spike significantly over the past 3 days as the increasing risk of energy sanctions have been getting priced in.

The trick is to make sure that Russia can’t sell this commodity to anyone, especially at the higher prices. Some of the other sanctions can help with this.