Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (43)	12/22/1998 8:58:00 AM
From: SDR-SI	Respond to of 350

And further to Ed's query: How many small operators (or even larger operators) can survive at a sustained $8 price?? It appears that the only encouragement is the hope that we are correct in the assumprion that "someday demand will again outsrip (or at least push upward) supply." "Someday" appears to be receding into the sunset. Someone give us some good news! We're waiting. Steve

To: Ed Ajootian who wrote (43)	12/22/1998 10:15:00 AM
From: Rod Copeland	Read Replies (2) \| Respond to of 350

Ed and Steve, I'm not sure where you found this or who authored it, but there are lots of holes that I see in it. Looks like that Noesis site that makes projections. 1) <Unless significant cutbacks occur>... Well, I can tell you that significant cutbacks have already occurred. OPEC and domestic. Your questions about $8 oil drive home the issue. The majority of wells in this part of the state are not economical at $8. I need $14 on most of my wells to operate at a profit. That doesn't take into consideration the psychological fact that you are selling your reserves too cheaply, even at $14. All of my friends and associates have shut in wells due to the economics or their refusal to "give" the oil away. 2) <The baby boomers are retiring and not commuting to work>... This is laughable. Somebody is commuting to work... who cares who it is. And while on the subject of commuting... There are over one billion Chinese people who are dying to commute to work. And what about India? 3) <gasoline fuel cell technology>... This doesn't even fit into the time frame to effect the next two years. Whoever wrote this made many assumptions...if prices remain low...if competition for market share continues in OPEC...no demand growth in the U.S..... no world demand growth.... no supply glitches.. Nothing about the oil market ever remains constant. The law of supply and demand is always working to find equilibrium. We have swung to new all time lows. We will swing back. I don't know when, but I sure wouldn't be putting a lot of weight on this article. Ed... Thanks for posting it. I just don't see how prices can stay down for another 12 months. I may be wrong, but I like my chances of being right. The OPEC group is just so hardheaded that they have to feel a lot of pain to do anything. Pain has arrived.