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Non-Tech : Kirk's Market Thoughts
COHR 159.34+18.3%3:59 PM EST
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To: Gottfried who wrote (2112)10/14/2014 5:03:00 PM
From: Jerome  Read Replies (1) of 26433
 
Hi Gottfried......that was a good article about drilling.

The author assumes that demand and supply (In the US and ME) will not be altered.

The ME can go from overproduction to very low production if the ISIL war disrupts that supply line.

Russia is a wild card....they need a given amount of revenue from oil to support their economy. So they will have to up production significantly because they need the money.

In the US....gasoline the finished product of crude will become a big export product to the far east.
China and the rest of the far east lacks refining capacity.

Lower gas prices around the world means that more people can afford cars. More cars create more demand for gasoline.

The author talks about the past oversupply of natural gas. That is true up to a point. But there is a much bigger infrastructure of tankers to transport gasoline and crude than there are tankers to transport natural gas. According to WIKI there are 4,295 oil tankers and only 235 natural gas tankers in use today around the world.

Stability in oil field production around the world is unlikely. As gasoline prices drop around the country, sales of big pick-ups surge.

My view would be that natural gas prices continue downward and that lower gas prices stimulate the economy.

Lower day rates for oil drilling rigs are likely, but he next crises is just around the corner, waiting to blind side us at the most inopportune moment.
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