The future of oil and gas on the world stage ! (Houston: insurance, mover)

[JimBaker488]

Originally Posted by Htown2013

What do we think will happen to Houston real estate, especially desirable suburbs outside loop like Katy, Sugar Land, and the Woodlands? What if interest rates rise as the rest of the country and non-energy industries strengthen?

I think the real estate market is going to rather rapidley switch from a sellers to a buyers market in Houston. Don't mean to be gloomy, but remember the edge pessimists have over optimistic types - they are better informed.
And wouldn't worry too much about higher interest rates as it looks like we are heading into a real deflationary stretch here.

[Zhang Fei]

Originally Posted by JimBaker488

Don't mean to be gloomy, but remember the edge pessimists have over optimistic types - they are better informed.

My impression is that industry execs in all natural resource sectors tend to be extremely optimistic at the same time - an optimism that is expressed via the purchase of large amounts of expensive capital equipment and natural resource concessions at boom cycle prices and the acquisition of industry rivals, all financed via debt. This is how non-oil sectors have come to (1) be glutted with product, and (2) generate years of red ink. I'd be surprised if many oil execs were particularly pessimistic at this point.

Case in point - Continental's Harold Hamm. Continental had no real issues with $70 oil when it had $1.2b in debt. Now that its debt number is $5.8b, possibly developing fields that are profitable only at higher prices, the odds of financial distress have increased. Weeks ago, Hamm got Continental out of its hedges, recognizing $400m of profit in the process, claiming that he believes the price dip is temporary. Hamm's a legend, and it's pedal to the metal for him.

[Jack Lance]

Originally Posted by JimBaker488

I think the real estate market is going to rather rapidley switch from a sellers to a buyers market in Houston. Don't mean to be gloomy, but remember the edge pessimists have over optimistic types - they are better informed.
And wouldn't worry too much about higher interest rates as it looks like we are heading into a real deflationary stretch here.

I think some of the housing hot spots we have been talking about over the past couple of years will cool, assuming oil prices continue to stay low. But I doubt they will become buyers markets anytime soon. There's no telling what geopolitical events will happen at anytime that will reverse the downward pressure on oil prices. I also think with all the petrochemical construction going on, the east side will heat up, at least relatively speaking over the next few quarters or so ...

[HookTheBrotherUp]

Originally Posted by Jack Lance

For those of you who think the future of Oil & Gas is bleak read this analysis from Patti Domm of CNBC.com

"America's unexpected transformation into the world's biggest natural gas producer and one of the globe's largest oil producers will give the U.S. more geopolitical clout on the world stage—including in key relationships with China, Russia and the Middle East.
By 2020, the U.S. is likely to be energy independent, along with Canada, its biggest import and export partner. Add to that a new boom expected from a reforming energy industry in Mexico, and North America will more than hold its own as a powerhouse in the global energy market.

The ripple, however, will be increasingly felt across the world. In the next several years, the European Union could be importing U.S. gas—and possibly even oil, if current laws change—lessening Russia's stranglehold on the European economy."

Energy in the future: Rising oil and gas production gives US more geopolitical clout

It appears , at least according to this analyst, that the American O&G revolution will focus more American power on the world stage. How do you suppose this increase in power will affect Houston in the years to come ?

If an administration comes in that echoes that of the current one (Obama), then no, it will not help as they would do everything in their power to degrade, destabilize and shutdown the oil industry because it makes too much money, and will have too much power.

[Jack Lance]

Originally Posted by HookTheBrotherUp

If an administration comes in that echoes that of the current one (Obama), then no, it will not help as they would do everything in their power to degrade, destabilize and shutdown the oil industry because it makes too much money, and will have too much power.

Agreed, The far left is behind the anti-oil undercurrent, but you have to admit that up till now Houston has fared fairly well under Obama. Historically speaking when you look back Houston has actually done somewhat better with Democratic Administrations in Washington, than with Republican.

Carter - Houston did great

Reagan - Houston did horrible

Bush 41 - Slightly better than under Reagan

Clinton - The 90's were pretty good for Houston

Bush 43 - Houston did OK of course there were a couple of disastrous events

Obama - up until now the biggest boom in Houston since the 70's. Of course there is no telling what will happen in the next 2 years. We will see if Obama feels our pain....

[still_waiting]

Let's not argue with the pessimists anymore, let's just let them have the doom and gloom argument, then maybe they'll go away. Then again maybe not, message boards thrive when there's a bunch of Chicken Littles running around predicting doom.

[Meyerland]

Originally Posted by JimBaker488

I think the real estate market is going to rather rapidley switch from a sellers to a buyers market in Houston. Don't mean to be gloomy, but remember the edge pessimists have over optimistic types - they are better informed.
And wouldn't worry too much about higher interest rates as it looks like we are heading into a real deflationary stretch here.

I think it will cool a bit and there won't be the frenzy like the past year. It won't become a buyers market anytime soon.

[MathmanMathman]

Originally Posted by Dopo

Forgot to say.... Thanks President Obama

More like...despite Obama. Like Clinton who enjoyed the expanded productivity as computing power and the Internet exploded, Obama is riding the energy wave. Just hope the Keystone pipeline comes with the new wave of Republicans. Houston's future is good. Oil is needed in many forms, not just energy.

[chris_ut]

Oil fell another 10% since some folks posted that all is well and to ignore the pessimists. Anyone whose been in the oil business for a length of time knows we have been in a heck of a boom the last 4 years and that every boom is followed by a bust. We also know another boom is down the road so tighten your belt for awhile and get ready for the next one to roll around.

[Jack Lance]

The boom may be over but that does not necessarily mean there has to be a bust in the Houston economy. We are going to test these claims of economic diversity that our city boosters have made in the past and we will see if the mid and down stream oil and gas sector can take up some of that slack .

As far as the future of O&G and what that will mean for Houston, I have to think that the Europeans would love to be able to buy gas from an alternate supplier besides the "Putin Union", and we will see if the oil export ban and perhaps some modifications in the Jones act shipping requirements can be waived or changed as well. Like Chris said above, there will be a Bull market in oil again eventually. Until that happens we will just have to find something else to do..