Hello 1986? OPEC playing hardball

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Hello 1986? OPEC playing hardball

Do you recognize the red flags? Western oil production is challenging middle east oil. But the operating costs of bitumin and shale oil are much higher than an oil well. The gamble, Saudi Arabia says no to reducing capacity and actually increases production thus further flooding the low demand market with oil that's plummeting in price. What does that mean here, for me it's just assumptions, but let's have a look. In the eighties production costs of 10-15$ per barrel for our synthetic blends against $25-30 barrel sell. We sell for less than Wti. Fast forward to today. 35$ a barrel production costs versus 55-65$ per barrel sell. Its really early in OPEC 's price war. Prices may level out and they may rise too. But is it possible prices may drop below a level that our region needs to sustain growth or even its operations. If history repeats itself, the price goes up! Im not talking price of gas at pump, the price is what we ultimatley pay in losses. Those who don't remember are doomed to repeat it! At work .....Get ready for less doormats, less coffee supplied, no new trucks...more work, less pay,less coworkers, layoffs, rumors galore...I guess you get the point. But what of those mortgages? Are housing sales up or down? Could you cut losses and sell for 5-10% less than market today? Will you have a job in 6 months or 12 if this continues? If we drop below $60/barrel we may be in for a flashback. Any 1980's fort mcmurray survivors see the similarities? what's your take?
Misterbill
 
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Hello 1986? OPEC playing hardball

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Re: Hello 1986? OPEC playing hardball

Unread postby MacDaddy » Fri Nov 28, 2014 2:26 pm

Personally, I have nothing to worry about. Mortgage is paid off and the consulting work I do will increase if the plants are feeling the pinch. This town needs something like this to check the greed that has become endemic in this town. I would really like to see housing become affordable for young families without having to take in borders and renters just to manage the mortgage. Fear of losing your job may actually get some of these plant employees off their duff and actually work instead of sitting in the office or smoking area all day long. A slow down in building could actually make some the shoddy contractors in town think about doing a good job for a change and the ones who can't can hit to road.
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Re: Hello 1986? OPEC playing hardball

Unread postby Yossarian » Sat Nov 29, 2014 11:31 am

MacDaddy wrote:Personally, I have nothing to worry about. Mortgage is paid off and the consulting work I do will increase if the plants are feeling the pinch. This town needs something like this to check the greed that has become endemic in this town. I would really like to see housing become affordable for young families without having to take in borders and renters just to manage the mortgage. Fear of losing your job may actually get some of these plant employees off their duff and actually work instead of sitting in the office or smoking area all day long. A slow down in building could actually make some the shoddy contractors in town think about doing a good job for a change and the ones who can't can hit to road.


You might just see housing become affordable as thousands get laid off and go bankrupt. If oil falls into the $50-$60 range for even a year most smaller operators will go belly up and will completely fail unless foreign buyers are permitted to scoop them all up. Then people can complain about all of our oil being foreign owned. Oil below $80 a barrel is really bad for Fort Mac in every single way.
Yossarian
 
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Re: Hello 1986? OPEC playing hardball

Unread postby MacDaddy » Tue Dec 02, 2014 12:06 pm

Unfortunate, but at fact of life for one industry towns. A hard time for those who chose to live like the grasshopper instead of the ant.
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