Topic: Long term OIL - page 7. (Read 91976 times)

Yes, Saudi Arabia's plan to cut the production and supply to the Asian market by 10% hardly affects the business of the the country. Though Saudi is one among the biggest market holder for crude oil such plans will surely affect the entire economy as the oil price were getting stabilized after a long time period.

Saudi Arabia seems to be trying hard to cut production and inventory, to address the oversupply of the market. I am not sure that this will work. They will only end up losing market share.

https://www.cnbc.com/2017/08/08/saudi-arabia-to-cut-crude-allocations-in-sept-by-at-least-520000-bpd--source.html

It is better to keep some btc then oil because bitcoin price go faster up and down so it gives us faster profit from trading then any other things for longterm which we can see in the market.

In fact, sanctions are important for Russia too. Just the official propaganda is hiding, but Putin is afraid of a Palace coup, and so we see what it enhances their security and takes away from the power of all strong politicians. Maybe the idea of the Americans is to provoke the overthrow of Maduro by proxy?

Everyone who uses energy is invested indirectly in oil via their own expenditure.  Anyone in USA is invested as oil is a production part of the economy which knocks onto everyone.   Anyone who buys their food and it is transported any great distance is then reliant on the oil price for some of their costs.    Anyone who heats their home or even people who use aircon in the summer are reliant on energy, oil or gas as a part of their costs.
Investing is really just a hedge to your costs, its fairly sensible and balanced to do so.   Like buying a house and you are the renter!   Most agree that saves them money though it does of course depend on the cost at that time.   Is oil production too expensive now, apparently fracking has dropped costs so its become quite efficent.   A country cannot always afford to import from countries like the middle east where its especially cheap to obtain, importing can give a false impression of cost.

Failure to invest in production in places like Venezuela meant high costs and a failure to profit from their natural resource.  I'd generally think it was a mistake to stop the frackers so long as they are increasing in technology and are able to control their costs.  Venezuela owned by government failed to advance themselves properly.    The negative scenario for investment might be clearer in Canada where tar sands are inherently expensive to extract, there is a resource but no apparent cheap way to access it.

And what difference will it make?

If the energy sector is nationalized, it means that sanctions will hit against the government directly. It is not like in Russia where oil is extracted by a few (allegedly) private companies and imposing sanctions against some of them doesn't make a lot of sense (in fact, in Russia specifically all major oil producers have close ties with Kremlin). Anyway, the US had been buying Venezuelan oil before, but now when they have frackers they might no longer need Venezuela, therefore sanctions could be directed not so much against foreign oil companies (or whole governments) but rather in favor of local producers

It only makes sense not to put all your eggs in one basket.  In any case, think about adding one or more investments . Maybe, one category that should be of interest to other investors is the energy market but we all know that the price of oil and gas fluctuates. So that, I would suggest to you  to invest in bitcoin especially in nitrogensports.

Short positions are great when we're in bear market, but saying we don't need oil anymore does not make sense. Technology and automobile companies' learders are also saying that hybrid cars are not to spread much before 2030 and we will need oil anyways forever.

I do not invest in oil. Although I know there will be advantages over the long run. But I do not think the profit earned is like the benefits of bitcoin. We see oil prices in the past .. and bitcoin prices in times. I think more bitcoin prices go up. Oil prices rose but slowly. It took a long time to restore our investment capital. Whereas bitcoin does not take much time to do that. Better you invest bitcoin

Although the technology is now very powerful can even replace the propulsion of oil is replaced by other means. Like his example of solar power. But oil is still in need in every country. Such as one of the current examples of fuel aircraft must use benzene as its fuel. Although there may be technology that can move aircraft using other technologies. But this time not all realized. So I think even though oil prices are declining. It will not affect the power of oil investment for now. But today many countries are using other technology as a tool for fuel. One side I agree because it can reduce the level of air pollution

From what I see electric powered vehicles and other renewable energy are making a push or an advancement lately, right now oil prices are going down because of it which is beneficial for the consumers. Also I can see if our world is a renewable world we won't be having problems about pollution in general if that happened. So the bottom line is I can't see oil being a good investment in the long term.

It seems like the opposition will soon topple Maduro in Venezuela. So Trump is waiting for that. Anyway, I really doubt whether American sanctions will have any impact on the Venezuelan oil production. The petroleum industry there is nationalized.

The US has indeed been flexible with sanctions, if they possibly have an impact on oil price. Except Iran, other oil producing nations have got away with wide range of violations. Now, it seems that Venezuela won't be sanctioned too.

https://www.bloomberg.com/news/articles/2017-07-07/white-house-is-said-to-be-unlikely-to-sanction-venezuelan-crude

If you are living in the gulf states, then the falling prices of crude is definitely going to affect your salaries and benefits. The gulf nations get anywhere between 50% and 90% of their revenues from the oil and gas sales. They should diversify away from oil/gas, but there are very few avenues. Agriculture is not an option due to lack of water. And tourism can't progress beyond a certain point, due to the conservative policies.

These tensions are indeed a factor for the retrogression of crude oil prices. It's uncertain how things may turn out but I hope it wouldn't affect some of us living in the gulf especially our salaries or other benefits .

I guess this is next to impossible right now

One of the largest US military bases is located not very far from Doha, the Qatar capital, which hosts over 11,000 US forces (this is like a small city). If anything, it would be them taking power and displacing whoever is ruling that nation now. Further, I'm not sure that Qatar is a prominent crude oil exporting country (at least, not like Saudi Arabia or Iran). It is mostly known for its liquid gas exports. Anyway, the price going down is likely due to American frackers rising their head (again), and as you said, the Gulf countries losing their crude oil muscle due to that. It kinda looks we are going to see oil prices below 40 dollars per barrel any time soon

The crude prices are hovering below the $50 per barrel mark. One of the reasons may be that the tensions hasn't escalated to a physical conflict between Qatar and the rest of the GCC nations. And also, it may be a sign that the middle-east is losing its dominance on the crude oil sector. Other countries such as Russia and the United States are rising in prominence.

Oil is more useful then dollars, short would say otherwise and with price only 40 or so thats a low point to be shorting from.   The big problem is that to short oil is to go long dollars, of the two trades that would be the more overplayed.   Dollars are far more over valued then oil is.

I agree theres alot of oil but theres also a cost to extracting then transporting it.   Quite alot of supply competing with Saudi Arabia is not cheap, they'll struggle to break even at this point.   So shorting presumes constant supply when we know that will not be true, quite alot of supply would come offline.   So its not linear, dangerous ground to short imo

Things might not be that simple

While it is certainly true that in the short term natural gas prices are not going to affect crude oil in any meaningful degree, but the relationship may still exist at higher levels than just the possibility of direct substitution (or lack thereof). Further, it may be extremely difficult (read prohibitively expensive) but still not completely impossible to make gasoline from natural gas (the major product of oil processing). After all, Germans and South Africans did manage to convert coal to liquid fuel somehow, so if natural gas becomes as cheap as air, it will likely affect crude oil prices as well

Lets not get cocky, we need oil is just that technology has progressed to the point we can reach sources that were not possible before and with more efficient technology we have been able to diminish the hunger for oil somewhat.