As Oil Prices Continue To Decline, Who Are The 'Losers And Winners'

[longknife]

The source seems quite sound and the reading makes a lot of sense. IMHO the “losers” are those commodity market types who bet upon oil prices remaining high. The winners are clearly the common people who are finding lots of savings in just about every phase of their lives.


Read more @ lsquo Astonishing rsquo shale growth bolsters US power

 

[Mr. H.]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

 

[longknife]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

 

[waltky]

Uncle Ferd `bout ready to put the turbo-charger back inna pick-`em-up truck...

Oil plunge is threat and boon to global economies
Nov 28,`14 ~ A renewed plunge in oil prices is a worrying sign of weakness in the global economy that could shake governments dependent on oil revenues. Yet it is also a bonus for consumers as prices fall at the pump, giving individuals more spending money and lowering costs for many businesses.

The latest slide follows OPEC's decision to leave its production target at 30 million barrels a day. Member nations of the cartel are worried they'll lose market share if they lower production. Partly because of the shale oil boom in the U.S., the world is awash in oil at a time when demand from major economies is weak - so prices are falling. Citibank analysts wrote in a report Thursday that global supplies exceed demand by about 700,000 barrels a day now.

The price of U.S. crude oil dropped $7.54 a barrel, or 10 percent, to $66.15 Friday and is down 38 percent since hitting $107 in June. Brent crude, an international benchmark, fell 3 percent to $70.15 a barrel on Friday. Tom Kloza, chief oil analyst at the Oil Price Information Service, expects the price to fall by another $5 or $10 a barrel before stopping. "It's that kind of rout," he said. Overall, the slide is a boon for consumers in oil-importing regions like Asia, Europe and North America. But there are also some possible negatives.

NORTH AMERICA

The U.S. economy will receive an outsized benefit from lower oil prices because the U.S. is the world's largest oil consumer. U.S. consumers have been surprised and delighted at the lowest gasoline prices since 2010. Drivers in some low-cost states such as South Carolina, Missouri, Oklahoma and Texas could see prices below $2, according to Kloza. The U.S. national average was $2.79 on Friday. Kloza expects gas to eventually be a full $1 per gallon below its June peak of about $3.70 a gallon. That would save typical households $60 a month for those that burn 60 gallons of fuel. "It's a nice easy, calculation," Kloza says. "These are numbers that we would have regarded three or four months ago as something from the lunatic fringe."

The bottom should come between $2.50 and $2.70 a gallon, Kloza says. Canadian consumers are also catching a break. In some regions, such as southern Ontario, gasoline could fall below the important psychological barrier of $1 per liter. The oil companies propelling a production boom in Canada and the U.S. won't be so happy. Crude produced in Canadian oil sands, deep offshore in the Gulf of Mexico and in some U.S. onshore shale formations is some of the most expensive oil to produce in the world. Drillers will have to cut back at least some activity. Forcing this kind of slowdown may have been part of OPEC's motivation for declining to cut its own production.

WESTERN EUROPE

 

[Mr. H.]

I've had to pick up a couple extra part time jobs, and waiting to hear about a third one.
This too shall pass.

 

[Judicial review]

I wouldn't want to own oil stock right now prior to the down fall.. stock prices are low so people should consider buying. Prices will go back up.

 

[rdean]

I wrote about this weeks ago here on the USMB. The smaller oil companies depending on shale oil will most certainly go out of business. There will be a spike in unemployment in Red States.
OPEC has 70% of the world reserves but control only 40% of oil output. Their share of oil output will grow, but they will receive less revenue. And remember, there was a link from someone to Fox saying the fall in oil prices was the "FAULT" of the Democrats?

Republicans blame the crashed economy under Bush and the GOP congress on Democrats even though they held the president and both houses for years and used reconciliation three times. They try to take credit for the improvement in the economy even though they can't name a single GOP policy that has helped the majority of Americans during the last 40 years.

 

[HoogieDoegie]

Each oil selling country has an oil reserve that will last them for a certain amount of time. The most ideal situation is to sell the most oil for the highest price possible. Money now is better than money in the future because you can invest in other things. Do you think OPEC is manipulating the oil market to hurt non OPEC competitors because the shael revolution in the U.S? Or do you believe OPEC is obeying to the natural ways of supply and demand behavior?

 

[elektra]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

The fuel tax is per gallon, not per dollar.

 

[elektra]

Who are the losers? Democrats who for years have stopped all forms of Energy Production (green energy is a canard, an energy user).

Where would we be if we could renew drilling off the Coast of Florida, off the Coast of California, and in Alaska?

How cheap would gas be if we developed our Nuclear Energy.

The People of the World have been the losers for the last 4 decades, while the Democrat Politicians, the Liberal Socialist Activists, The Lawyers, The Civil Courts, and all the Government Bureaucrat workers have been the winners.

Government workers are the winners, lawyers are the winners, environmentalists are the winners.

The Average American who works as plumber, or carpenter, or used car salesman, and whole bunch of others, we always lose, and will continue to lose even with a low price for oil.

We are still stuck with all you liberal socialist leeches.

 

[Mr. H.]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

The fuel tax is per gallon, not per dollar.

Some cities, like Chicago, put an additional sales tax on the dollar amount of the gasoline sale.

 

[Judicial review]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

The fuel tax is per gallon, not per dollar.

And a pointless tax.

 

[Old Rocks]

Hmmmmmmmmm................. Renewables coming down in cost rapidly, several companies in differant nations on the verge of improving EV battery density by factors, maybe the Saudi's are seeing the future, and selling their oil while they can. After all, they are producing it a lot cheaper than we can with the new technologies involving oil shales.

 

[CultureCitizen]

This will hit hard the companies who have invested in shale oil/gas. They are operating with no profit.
With lower oil/gas prices their cash flow will be severly affected.
Of course OPEC, countries will be affected, but I am guessing they are betting on the shale bubble to burst.
If that happens they will have a loss for a small time but take the competition out.


As cash flow flattens major energy companies increase debt sell assets - Today in Energy - U.S. Energy Information Administration EIA
As cash flow flattens, major energy companies increase debt, sell assets

 

[Care4all]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

The fuel tax is per gallon, not per dollar.

true, and since prices are low, consumption will rise, and the gvt should clean up on the taxes with more gallons sold, don't ya think?

And local and state gvts could benefit from lower gas prices in their budgets for city transportation, and police vehicle gas usage etc...

 

[elektra]

This is hitting the small domestic operators really hard right now. But no one gives a flying fuck about them anyway.

And governments that depend upon fuel taxes and really hurting!

Next step - increase the taxes.

The fuel tax is per gallon, not per dollar.

true, and since prices are low, consumption will rise, and the gvt should clean up on the taxes with more gallons sold, don't ya think?

And local and state gvts could benefit from lower gas prices in their budgets for city transportation, and police vehicle gas usage etc...

The government does not need more money, they need less spending.

Anyhow, I was correcting someone who seemed to not realize that the tax was per gallon, so how do you unload all that in response to my post?

You know who the losers are, Me and You, we are still stuck with the price of Solar and Wind, which will never go down, will always go up, and as of today is an extremely expensive form of energy, and energy is used loosely, Wind and Solar have completely failed to supply the power we need, but I hear if we give them another 50 years, they may supply a small percentage for a little bit of time on some days.

 

[Politico]

The losers will be the morons who think the gas they are paying 70 cents too much for now is a good deal. In a few years after oil goes up and down again they will be praising how $2.55 a gallon is deal when oil is $50 a barrel.

 

[RGR]

This will hit hard the companies who have invested in shale oil/gas. They are operating with no profit.

Companies that extract commodities are almost always hurt when prices for their products drops. And of course there is profit to be made, depending on the quality of geology, the cost of development. Marginal operators are ALWAYS at risk, regardless of price.