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Old 12-01-2014, 09:57 AM
 
288 posts, read 433,863 times
Reputation: 340

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Quote:
Originally Posted by Jack Lance View Post
First of all you do not take into account the beneficial effects that lower oil prices have on other segments of the economy. Even within the O&G sector you will see upswings in profits in the refining sector due to lower prices.

Nobody is suggesting that lower oil prices will not have some ill effects on Houston's economy but to state that somehow Houston real-estate market is directly pegged to oil prices is absurd
Oil/Fracking boom brought a ton of high paying jobs. Which brought a ton of people in just a few yrs, thus creating the competition in the housing market.

Its not rocket science.

 
Old 12-01-2014, 10:59 AM
 
Location: Beautiful Northwest Houston
6,291 posts, read 7,498,832 times
Reputation: 5061
Quote:
Originally Posted by ipuck View Post
How about use your neighbor as an indicator? Do one of you neighbor on the right or left work in O&G? If yes, how long you think your neighbor will be in that house if they are unemployed for longer than 6 months?

People are concern because it is always the future that drive the company and economy. When the future is in doubt, things are no longer normal.

I think Saudi Arabia is out to teach the guys drilling in North America a lesson for taking a piece of their pie. They will make this painful till it hurts before they start manipulating the price upward again. End game is 25-50% of the North American producers no longer drilling in North America.
I agree the Saudis are playing a heavy hand here but they need income from oil as well. CNBC says they need oil at $93 to fund their government programs so they cannot push oil down indefinitely and they have little to no income from other sources. So it is a pissing contest and we have more **** than most people seem to think......
 
Old 12-01-2014, 11:01 AM
 
1,329 posts, read 3,544,541 times
Reputation: 989
Quote:
Originally Posted by ipuck View Post
I think Saudi Arabia is out to teach the guys drilling in North America a lesson for taking a piece of their pie. They will make this painful till it hurts before they start manipulating the price upward again. End game is 25-50% of the North American producers no longer drilling in North America.
The Saudis have neither increased nor decreased production. OPEC was counting on them to take the brunt of a production cut.
 
Old 12-01-2014, 11:02 AM
 
Location: Beautiful Northwest Houston
6,291 posts, read 7,498,832 times
Reputation: 5061
Quote:
Originally Posted by Scientific View Post
Oil/Fracking boom brought a ton of high paying jobs. Which brought a ton of people in just a few yrs, thus creating the competition in the housing market.

Its not rocket science.

So are you agreeing with Zhang Fei, that real estate and oil prices are in perfect sync in Houston?
 
Old 12-01-2014, 12:31 PM
 
288 posts, read 433,863 times
Reputation: 340
Quote:
Originally Posted by Jack Lance View Post
So are you agreeing with Zhang Fei, that real estate and oil prices are in perfect sync in Houston?
This historic highs, never before seen, crazy market? That just came out of the sky.
 
Old 12-01-2014, 01:31 PM
 
1,329 posts, read 3,544,541 times
Reputation: 989
Quote:
Originally Posted by Jack Lance View Post
I agree the Saudis are playing a heavy hand here but they need income from oil as well. CNBC says they need oil at $93 to fund their government programs so they cannot push oil down indefinitely and they have little to no income from other sources. So it is a pissing contest and we have more **** than most people seem to think......
They can just pump more, further cratering the price. Their cash costs are minimal - $1 to $2 a barrel (including cap ex about $4 to $6). They also have a year's worth of GDP sitting around in a sovereign wealth fund. Ultimately, to keep the price at $100, they need to continually cut production in the face of new North American fracking and oil sands output, as well as deep water projects elsewhere. That they are neither increasing nor decreasing production is a sign that they are willing to lose market share in % terms but not in absolute bpd terms.
 
Old 12-01-2014, 02:03 PM
 
Location: Beautiful Northwest Houston
6,291 posts, read 7,498,832 times
Reputation: 5061
Quote:
Originally Posted by Zhang Fei View Post
They can just pump more, further cratering the price. Their cash costs are minimal - $1 to $2 a barrel (including cap ex about $4 to $6). They also have a year's worth of GDP sitting around in a sovereign wealth fund. Ultimately, to keep the price at $100, they need to continually cut production in the face of new North American fracking and oil sands output, as well as deep water projects elsewhere. That they are neither increasing nor decreasing production is a sign that they are willing to lose market share in % terms but not in absolute bpd terms.
That one years worth of GDP is going to get spent fast having to subsidize their own oil production to the tune of $30 to $40 a bbl and more. The American O&G industry is going to take a hit but it is in a stronger position than a lot of people give it credit for. Also remember that new technologies will help bring down the cost of tight oil as well.
 
Old 12-01-2014, 02:21 PM
 
1,329 posts, read 3,544,541 times
Reputation: 989
Quote:
Originally Posted by Jack Lance View Post
That one years worth of GDP is going to get spent fast having to subsidize their own oil production to the tune of $30 to $40 a bbl and more. The American O&G industry is going to take a hit but it is in a stronger position than a lot of people give it credit for. Also remember that new technologies will help bring down the cost of tight oil as well.
A lot of it was simply being put into the sovereign wealth fund. Now the contributions will cease. It's not clear how they would have to subsidize production when their cash cost is $1 to $2 a barrel.
 
Old 12-01-2014, 02:25 PM
 
23,177 posts, read 12,216,625 times
Reputation: 29354
Quote:
Originally Posted by ipuck View Post
I think Saudi Arabia is out to teach the guys drilling in North America a lesson for taking a piece of their pie. They will make this painful till it hurts before they start manipulating the price upward again. End game is 25-50% of the North American producers no longer drilling in North America.
Oh, drats! I guess we'll just have to stir up another Middle Eastern war that takes out a bunch of oil production...
 
Old 12-01-2014, 02:34 PM
 
Location: Beautiful Northwest Houston
6,291 posts, read 7,498,832 times
Reputation: 5061
Quote:
Originally Posted by Zhang Fei View Post
A lot of it was simply being put into the sovereign wealth fund. Now the contributions will cease. It's not clear how they would have to subsidize production when their cash cost is $1 to $2 a barrel.
You really have to include the cost of government in their economic equation, they are a state run oil monopoly. So the total cost of their production has to be considered $99 a bbl according to CNBC. At $70 a bbl they are running a $30 deficit that they are in effect subsidizing.
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