Well said wyododge, well said.

150 bucks was crazy, but it is equally crazy to hope for 20 dollar a barrel, each hurts us badly.

 

As said, it was on 60 Minutes, worth watching, you can see it here http://www.cbsnews.com/video/watch/?id=4653139n

My bet is Canada is really suffering from the low oil prices. I read they need at least $60/bbl to break even on the tar sand oil.

 

I will check out the link...thanks for that. How did these oil companies make it for so many years prior to the $50-$147 bbl?
Is it just one of things, once you've tasted it you cant go back?

 

well, hopefully diesel prices will fall more inline w/gas...

http://money.cnn.com/news/newsfeeds/...8_FORTUNE5.htm

 

How does the Saudi saying go?
" My father rode a camel, I drive a car, my son flys a jet plane, his son will ride a camel"

 

I agree with wyododge to a point, but I also remember only a few short years ago $20 a barrel and no employment problems. Could it be that the prices started climbing and they started employing more workers for expansion due to the huge profits and now like many other companies it is biting them in the rear?? Now they NEED the higher prices to keep profits up?

 

One thing you can be guaranteed of in the O&G industry, if there aint no money, you don't have a job, period. Layoffs are happening right now. Most of the southern US are either in the process or already stacked out. 600+ rigs so far, and more on the way. That ain't on the evening news. That should scare the crap out of everybody. If you think the auto industry failing is bad, start figuring out what happens if the oil and gas industry goes down, lock up and gather the women and children cause the $%*# just hit the fan, it's caveman time.

2003 was the last year that oil prices (yearly average) were in the twenties. For the prior ten years they have fluctuated between the high teens and the lower forties. But what caused these fluctuations. The list is endless. China, India, Russia, EPA, Taxes, Regulation, 9/11, .com bubble, war, Clinton, the economy was just starting to heat up, on and on.......

The oil boom started about 7 to eight years ago. Since then, the number of O&G employees has increased, to service skyrocketing demand for oil. And with an increasing market, increased production, limited storage, limited refining, limited leases, and limited alternatives, you will only get an increase in prices. Now prices have fallen and oil is cheap, the economy is in a recession, and people are not spending. Profits are now way down. But the profit margin remains the same. You only hear about huge profits described in terms of dollars. These oil companies are corporations, they must, and do, answer to their shareholders. They have a profit margin and they are required to adhere to it. They must meet quarterly projections or their stock plummets. The only way to adhere to that profit margin is by decreasing expenses, increasing profits, or a little bit of both. That is the job of the CEO and that is why they are paid so much. Right now they are laying off workers and stacking out rigs to get costs down because income is low. At $80.00/barrel, the oil industry has very good employment rates, gasoline is still affordable but expensive enough to limit wasteful habits, rig levels will stabilize, future exploration will continue, OPEC will behave and alternative fuels will still be R&D'd as most are still viable until about $50.00 per barrel.

For us to be independent we must have all: oil, gas, refineries, wind, solar, and geothermal, hydrogen and CTD's in every driveway.

Long story short, if you depend on high prices, you end up like GM and get the government to pay for it when prices fall. In the oil and gas industry if prices drop to far you loose your job and go home. That's why I said you should pray for $80.00/barrel, everything works at that average.

 

I see your point and do agree. Too bad this kind of info does not make the national news! And what does "stacking out rigs " mean?

 

i would imagine shutting down. my father has lost quite a bit of business since oil has gone down because of rigs getting shut down.

wyo is correct. cheap gas seems like a good thing but it really isnt.

 

You are right dieselfan, stacking out means shutting down, sorry for the slang I sometimes forget that there is another world out there, sorry!!!!

 

I was talking to a friend the other day and told him I would LOVE to see $20 a barrel but I also told him I bet many companies will be hurting if it happens. Looks like I am right. (Unfortunately)

 

Don't get me wrong rockcrawler34 (very cool handle by the way), I am all for free market, and cheap gas. Unfortunately we have way higher expenses here in the US than the rest of the world mostly because of court challenges, and government restrictions caused by 'national park' land grabs which were formed purposely to exclude exploration. If everyone would get out of the way we could get our resources quick easy and clean, and you would never know we were there.

However, one benefit of lower oil prices, that I failed to mention, is that we now have to become VERY efficient at getting your oil and gas. In the long run, this is very good. In the Bakken oil fields in North Dakota a year ago it used to take upwards of a month and a half to drill a single 11,000' well. We now do it in as little as two weeks. In the Jonah gas fields in Wyoming we are drilling 8 well gas pads (8 wells in one location) in a little over a month and a half, easily twice as fast as a year ago. We actually drill a surface well down to 2500' in 10 to 12 hours!!! That is progress brought on by low oil prices and the desire to increase profits. So it is not all bad.

 

Not taking it wrong in any way. I am glad to hear the facts from someone who obviously is in the business first hand. Also glad to hear you say "So it is not all bad" As long as people are keeping jobs and also improving the work progress I would have no problem with the oil prices staying where they are or even a few bucks higher. I just hate to see the speculators (and others) driving the prices unfairly high. And equally unfairly low.

 

No Doubt, I'd like to roll em up, and send em down hole with the frac boys and spread em' throughout the formation. Of course that would probably sour the formation and cause further drops in the price of oil!!!!