Analcyst: $25 oil in 2006

[lowecur]

Well I don't know if I buy this logic, but what the heck. He doesn't seem to mention that OPEC would just cut production if there was this kind of oversupply.

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_no ticia=1115132324-e04a0f08-36447

 

[English]

Well I don't know if I buy this logic, but what the heck. He doesn't seem to mention that OPEC would just cut production if there was this kind of oversupply.

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_no ticia=1115132324-e04a0f08-36447

I'm sorry, I don't get it...what is an anal cyst?

 

[Boeingman]

I'm sorry, I don't get it...what is an anal cyst?

You just responded to one.

 

[FlyBoeingJets]

Oil went abnormally low a few years ago. There is a possibility it will go, temporarily, too low again. Is it possible oil may have been too high the last year or so?

As far as the effects JetBlue seems to do well regardless of $55/barrel or $30/barrel oil. They probably won't care.

The legacies will REALLY like lower oil. If oil drops to $35/barrel it would effectively eliminate oil hedge revenue in 2006 and make the unhedged look brilliant again. The cost of SWA's hedges would not be worth the meager gain. The hedged would be at disadvantage for a few quarters. I'm hoping that if oil falls it goes all the way to less than $30/barrel. But how likely is that with China eating oil like candy?

You have to wonder if it is more or less risky to hedge more than 50% of oil needs considering oil might come down and the hedges are $35/barrel. Maybe the hedges will come back down to $25/barrel so better hedges can be purchased.

A temporary reprieve for the unhedged would be interesting.

 

[akairman702]

I don't see oil coming below $40.00 a barrell unless an unusual set of circumstances occur at the same time. Since the late 90's OPEC has begun to run itself the manner it should have been years ago - efficiently. Until around 1999-2000, infighting between OPEC's participating countries created political conflicts and disagreements which sabotaged a profit potential that has always been available to them. Those days are over. From a business standpoint, the organization should be a profit machine year in and year out. The countries in OPEC are done bickering and are now focused only on guaging the economies of the worlds' industrialized countries and controling production in a way that maximizes profits.

The Asian recession in the late 90's was also a large factor in oil being so cheap in then. The likelihood of inexpensive oil (and I think the new standard for "cheap" is closer to the $40.00 level than $20.00) coinciding with a significant economic expansion in the U.S. may take decades to happen, if ever.

 

[LearLove]

I see oil comming down, but only because we (the US) are causing a fuss. Even then my guess is it will bounce between $40 to 46 as a "low" for the next several years. At least it will stabilize out so airlines can "plan" costs.

My guess also is that the market (DOW) will range stagnet (up and down) from where it is now (low 10,000's) up to mid to high 10,000 for the next couple of years as we go from a "growth" to "stagnet" economy.

Its either that or a big crash (in the DOW) that I talked about in an earlier post due to everyone (companies and individuals) being too far in dept. What that does to oil prices if it were to happen I don't have a guess.

Note: the above is just my guess, wasting away on reserve in the crashpad, I need something to do.

 

[atpcliff]

Hi!

Here's the website:
http://www.evworld.com/view.cfm?section=article&storyid=846

If you don't know who T. Boone Pickens is:
"
T. Boone Pickens started Mesa Petroleum with $2500 in 1956, growing it into one of the world's leading independent oil and gas producers.

Excerpts
"
..."Let me tell you some facts the way I see it," he began. "Global oil (production) is 84 million barrels (a day). I don't believe you can get it any more than 84 million barrels. I don't care what (Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today and I know what's it like once you turn the corner and start declining, it's a tread mill that you just can't keep up with....

"Don't let the day-to-day NYMEX (New York Mercantile Exchange) fool you, because it can turn and go the other direction. I may be wrong. Some of the experts say we'll be down to $35 oil by the end of the year. I think it'll be $60 oil by the end of the year. You're going to see $3 gasoline twelve months from today, or some time during that period....

Cliff
YIP (finally out of MMIO)

 

[sqwkvfr]

Oil will go down again.

The current extraction cost estimate of the oil sands in Canada is $10 per barrel and companies involved in this area are certain that when emerging technology come to fruition, the costs will be lowered to $8.50 per barrel.

Combine this with the fact that advances in the area of exploration and extraction have actually caused the amount of known and available oil reserves to RISE over the last several years, you're looking at a winner when you bet on lower oil prices.

It has it all...competition for the middle east, an increasing supply of worldwide reserves, improved technology, and hopefully progress in the areas of conservation and reduction in dependance on oil.

...it's a recipe for lower prices all the way around...but it is NOT gonna happen short term.

Then again, who's that guy that preaches the 10-year aviation cycles?...perhaps the one in 2007 will be due to reductions in the price of fuel.

 

[lowecur]

Hi!

Here's the website:
http://www.evworld.com/view.cfm?section=article&storyid=846

If you don't know who T. Boone Pickens is:
"
T. Boone Pickens started Mesa Petroleum with $2500 in 1956, growing it into one of the world's leading independent oil and gas producers.

Excerpts
"
..."Let me tell you some facts the way I see it," he began. "Global oil (production) is 84 million barrels (a day). I don't believe you can get it any more than 84 million barrels. I don't care what (Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today and I know what's it like once you turn the corner and start declining, it's a tread mill that you just can't keep up with....

"Don't let the day-to-day NYMEX (New York Mercantile Exchange) fool you, because it can turn and go the other direction. I may be wrong. Some of the experts say we'll be down to $35 oil by the end of the year. I think it'll be $60 oil by the end of the year. You're going to see $3 gasoline twelve months from today, or some time during that period....

Cliff
YIP (finally out of MMIO)

Spoken like a speculator who has everything to gain from high oil. Who's right or who's wrong is anybodys guess. All I know is that the market has a way of balancing out oversupply and undersupply very quickly....it's called price. Speculators like to talk about the lack of oil to service the growing world economy. Do they really believe that $100 per barrel oil is going to sell worldwide? Can China and India afford $100 per barrel oil for their growing economies. I think not.

 

[JohnDoe]

quote:
"Do they really believe that $100 per barrel oil is going to sell worldwide? Can China and India afford $100 per barrel oil for their growing economies. I think not."


Gotta agree with that one.

Everytime I see somebody say that it is China and India's demand that is going to keep prices climbing, I have to wonder how they think those countries will be able to afford $80-100 anymore than our's can. In addition, if oil does go that high our economy will be in the dumps (to say the least), and who buys all the crap that China produces? We do. We stop, there goes their economy, demand for oil, etc..