How big is the oil Bubble?

[Moonglow]

They have new portable platforms that can be driven to a site and set up in days. Which cuts the costs of building site based structures. A friend of mine just went down to work on one.
Now the video is animated but now everything is mobile so NO money lost on pumps/drills and derecks in "dry" spots.

One thing is already lost Pipelines have already dropped the cost of natural gas to just barely above marginal cost but most freight transport can be converted to NG relatively cheaply.

It burns so dry those damn gaskets burn out in no time...But it was popular during the oil embargo of the 1970's, then the high prices of the early to mid eighties..

 

[Manonthestreet]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

Unless they back it with gold which they have and we dont......

We have more gold reserves than our national debt...

Nobody knows if we have any gold.......

 

[Moonglow]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

Unless they back it with gold which they have and we dont......

We have more gold reserves than our national debt...

Nobody knows if we have any gold.......

I know there is a several Morgan silver dollars...

 

[Toddsterpatriot]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

You mean the Yuan.

 

[Manonthestreet]

US silver reserve was liquidated,,,we know that for certainty

 

[Toddsterpatriot]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

Unless they back it with gold which they have and we dont......

We have more gold reserves than our national debt...

No we don't. Not even close.

 

[Moonglow]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

You mean the Yuan.

No the yen for noodle soup...

 

[Shrimpbox]

To answer the op, what is going to burst the bubble, war in the Middle East or the threat of imminent war in the Mideast. Or any other geopolitical threat that creates hostilities. And man will the fat cats get rich off of that, as well as many commodity driven governments. Actually a war will probably for the short term get many world economies off of life support.

 

[william the wie]

Now that the Yen has been devalued,,,,,there goes China being on the world reserve currency..

Unless they back it with gold which they have and we dont......

We have more gold reserves than our national debt...

Nobody knows if we have any gold.......

That depends on price, mining restrictions and the cost of disposing of/destroying the Arsenic or Cyanide used in refining. Given the $680 billion smuggled out of the country priced in the international yuan but smuggled out as the less valuable internal Yuan China had several trillion of barely used capital equipment shipped out as scrap last year alone. So, China has major problems.

 

[william the wie]

To answer the op, what is going to burst the bubble, war in the Middle East or the threat of imminent war in the Mideast. Or any other geopolitical threat that creates hostilities. And man will the fat cats get rich off of that, as well as many commodity driven governments. Actually a war will probably for the short term get many world economies off of life support.

Definitely the way to bet. but that will be a short run fix.

 

[Shrimpbox]

And another question. If one of these portable rigs strikes oil or gas, how or when do they get the product to a pipeline. Is it just trucked out?

 

[william the wie]

And another question. If one of these portable rigs strikes oil or gas, how or when do they get the product to a pipeline. Is it just trucked out?

Great question, here's your not so great answer:

high sulfur content can make the product unusable in pipelines because it is too corrosive to ship that way until cleaned up and it is bad for trucks, barges and trains so there is an extra, perhaps unofficial, charge to get around common carrier restrictions.

Natural gas in much cheaper to ship by pipeline than crude.

After that point a very long laundry list of things need to be considered to determine if another list of questions need to be answered before a yes or no can be given.

 

[william the wie]

I inadvertently got a better answer to your question today. I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry. Since the only way that can happen is through additional capacity as lot of pipelines will be built soon and WTI will resume dropping.

 

[FactFinder]

I think the oil industry is reaping what is has sown. and it may get worse from here. You can't keep oppressing people without the risking the Wrath of God. Mindlessly and with reckless disregard of the poor have the speculators and major oil industry executives perpetrated fraud on the public The reaper has appeared.

 

[william the wie]

Sounds right.

 

[Toddsterpatriot]

I inadvertently got a better answer to your question today. I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry. Since the only way that can happen is through additional capacity as lot of pipelines will be built soon and WTI will resume dropping.

I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry.

If you think pipelines (or pipeline stocks) are going up, why would you sell covered puts?

 

[RGR]

I think the oil industry is reaping what is has sown. and it may get worse from here. You can't keep oppressing people without the risking the Wrath of God. Mindlessly and with reckless disregard of the poor have the speculators and major oil industry executives perpetrated fraud on the public The reaper has appeared.

The oil companies are certainly the victims of their own success. But I doubt that Allah or whomever is your favorite Big Voice From The Sky had much to do with it.

 

[Toddsterpatriot]

I inadvertently got a better answer to your question today. I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry. Since the only way that can happen is through additional capacity as lot of pipelines will be built soon and WTI will resume dropping.

I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry.

If you think pipelines (or pipeline stocks) are going up, why would you sell covered puts?

 

[waltky]

Saudi Arabia takin' the long view...

Saudi Arabia confident of oil price revival as demand grows
Wednesday 24th February, 2016 - Saudi Arabia minister of Petroleum and Mineral Resources Ali Al-Naimi is confident the current drop in prices is just a "blip" as the global demand for oil will continue to grow.

"The short term is here to stay. We will always have these blips, " 81-year-old Al-Naimi said Tuesday in his opening address at IHS CERAWeek, the annual conference of US energy industry leaders and companies being held in Houston. Al-Naimi stated that his confidence of a recovery in oil prices is based on arithmetic, not hope. To reinforce his contention, Al-Naimi cited projections by the International Energy Agency and others that oil demand will average 1.2 million barrels per day through 2021. "The fact is that demand was, and remains, strong. You can argue over small percentage falls or rises, but the bottom line is that the world demands, and gets, more than 90 million barrels per day of oil," said Al-Naimi. "Long-term, this will increase. So I have no concerns about demand, and that's why I welcome new, additional supplies, including shale oil."

So far Saudi Arabia has ruled out a deal by major OPEC member nations to cut oil output. At the same time, Saudi Arabia has indicated willingness for a provisional output freeze if other major global oil producers agree to it. Last week, Saudi Arabia joined Russia, Qatar and Venezuela to push for a co-ordinated production freeze to help balance a market swamped with excess crude production despite a drop in US shale out production. Al-Naimi is scheduled to meet again with other big producers in March in hopes that they would join the group. With Iran and Iraq pushing ahead with plans to raise their production, even as oil demand remains weak, the market situation is not expected to improve in the short term.

Al-Naimi said a lack of trust between the world's biggest producers meant a cut in production "is not going to happen". "There is less trust than normalNot many countries are going to deliver. Even if they say they will cut production, they will not deliver," Al-Naimi said. Internationally traded Brent crude dropped $1.33 a barrel to $33.35 after Al- Naimi's remarks, while the US marker slid $1.54 a barrel to $31.85. The announcement has raised hopes of a move toward action that would curb an oversupply of more than 1m b/d. Senior Gulf officials have said in the past week an agreement to restrain production could be a prelude to further action in the form of production cuts, an idea Al- Naimi appeared to distance himself from. Oil traders have been more sceptical, noting Opec members Iran and Iraq have not joined the accord. Iran's oil minister, Bijan Zanganeh, said on Tuesday the push for a freeze was "laughable", according to a local news agency. Iranian officials have called on countries such as Saudi Arabia, which have ramped up production over the past year, to curb output.

The last time Al- Naimi spoke at the annual conference was in 2009, when crude prices were plummeting amid a financial crisis. Then, Opec slashed production by millions of barrels per day. Today the group led by Saudi Arabia has been pumping freely in an effort to knock out higher-cost rivals. The kingdom's production has surpassed 10 millions barrels a day for almost a year. After oil tumbled in 2014, he tried to bring together producers from inside and outside of OPEC to seek consensus. But there was "no appetite for sharing the burden", he said. Executives in Houston sounded resigned to a market where OPEC would no longer throttle back supplies.

Saudi Arabia confident of oil price revival as demand grows

See also:

Oil rebound buoys Wall St; bonds, gold erase gains
24 Feb.`16 - A sharp rebound in crude prices lifted stocks on Wall Street on Wednesday in a late rally, but a gauge of equities across the globe closed lower on lingering concern about economic growth.

Crude turned higher after data showed U.S. gasoline demand spiked and the S&P 500 climbed steadily after that, ending 2 percent above its session low. "You have a tremendous amount of underperformance out there in the hedge fund community," said Ian Winer, director of trading at Wedbush Securities in Los Angeles. "When the market starts to turn, it starts to feed on itself because people can't afford to miss out on a rally."

Other assets, like Treasuries and gold, reversed course after the bounce in crude. "As much as it frustrates people, the reality is (oil and equities) are incredibly highly correlated and they have been really going back to November," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.

The Dow Jones industrial average <.DJI> rose 53.21 points, or 0.32 percent, to 16,484.99, the S&P 500 <.SPX> gained 8.53 points, or 0.44 percent, to 1,929.8 and the Nasdaq Composite <.IXIC> added 39.02 points, or 0.87 percent, to 4,542.61. The 14-day correlation between the S&P 500 and U.S. crude stands at 0.93, just below the 3-1/2 year high hit earlier this month.

The bounce in the S&P contrasted with a fall in European stocks, which were weighed by energy and commodity sector names. The pan-European FTSEurofirst 300 share index <.FTEU3> fell 2.3 percent and MSCI's gauge of stocks globally <.MIWD00000PUS> fell 0.5 percent. Nikkei futures jumped 0.9 percent.

OIL REBOUNDS

 

[Toddsterpatriot]

I inadvertently got a better answer to your question today. I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry. Since the only way that can happen is through additional capacity as lot of pipelines will be built soon and WTI will resume dropping.

I wrote some covered puts on pipeline companies today in or near to in the money and the orders were filled at an annualized 130% gross cash on cash basis. What that means is that pipelines are going nowhere but up as an industry.

If you think pipelines (or pipeline stocks) are going up, why would you sell covered puts?