Comments on: Here’s why oil companies should be a lot more profitable than they are http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/ Sat, 03 Jan 2015 16:42:55 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: shades74 http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2551 Sun, 07 Dec 2014 16:01:17 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2551 How is it possible humans will ever be able to get away from oil? It is not even imaginable unless your a day dreamer. To much of human civilization relies on oil. Maybe we will find another viable fuel source, we sure wont for chemicals , paints, plastics, rubber and so many more. We all would like to think we have other choices and truth be we have nothing yet.

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By: DJSanDiego http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2550 Sun, 07 Dec 2014 14:53:09 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2550 Aramco only wanted Eighty USD per Barrel.Brent sweet crude went off the charts@136.29 per Barrel July 3,2008….Pump prices today are the same as when oil was 27 USD per Barrel….Saudi Ministers are Hedging a bluff to increase output to 32 million Barrels per day to Demonstrate that they are within control of the OPEC Cartel and they recognize the negative effect of public perception.They ask only for larger containers to store their money….and the Beltways response of reducing oil output now means that you should call 202-456-1414 1600 Penn. ave. ask for Ernesto in the Kitchen He knows about oil……

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By: bigbirddog http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2548 Sat, 06 Dec 2014 01:35:08 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2548 The author has it backwards. The price is set by the marginal producer who, by definition, is the high cost producer. The Saudi’s, Russians, etc. are inframarginal producers – they can produce at a cost lower than the marginal price. So, the price should fall to the marginal cost of the high cost producers, at the intersection of the supply and demand curves. This price is about $65 -75 boe.

Let’s not take innumerate English majors seriously. If they understood Math and Economics, they would be employed elsewhere.

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By: UauS http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2547 Sat, 06 Dec 2014 00:37:53 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2547 A real economically viable breakthrough in the alternate sources of energy (or a combination of them) will soon be the next “big thing” in human history, after microcomputers and the Internet. So the oil is slated to become very expensive one day… as most precious antiques do.

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By: Benny27 http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2546 Fri, 05 Dec 2014 20:39:18 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2546 Hey Marpy you ignoramus,
I am old enough to remember when the oil industry began using the propaganda term “oil-Sands” when in the past everyone, including the oil industry players, called it what it is: Tar Sands.

Bitumen is not oil, never has been, never will be. It is you that is the idealogue, no thte author.

Just keeping you honest.

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By: AlkalineState http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2545 Fri, 05 Dec 2014 18:30:34 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2545 “The 40 percent plunge in oil prices since July, when Brent crude peaked at $115 a barrel, is almost certainly good news for the world economy; but it is surely a crippling blow for oil producers.”

Poor oil producers. I feel like crying for them.

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By: willich6 http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2544 Fri, 05 Dec 2014 18:08:37 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2544 Interesting point of view. I’m not sure I see a “stranded asset” scenario at present, with global oil demand forecast to continue to grow for the forseeable future. But there certainly is a case today where oil demand is lagging behind supply world wide, and it does indicate that some ‘high cost’ oil should be left in the ‘ground’ for now. Simply a case of ROI.

Whether an oil company should decide to “self liquidate” is an altogether other question; one which I’m sure ‘greens’ would love to see them answer in the affirmative. But I would suggest that the oil business is not going away any time in the next 100 years, so this is really a ‘marginal cost of production’ decision.
Western nations will reduce their demand for oil as they move ever so slowly to renewable energy coupled with efficiency gains. But the developing world – China, India, Asia and Africa – have significant pent up demand for energy, and as they grow and develop a middle class, they will consume ever increasing amounts of oil and LNG – this will become the future demand driver.

Saudi is protecting it’s relevance by continuing to pump. Saudi is also engaged in a geo-political cold war with Iran in the ME, and ‘cheap oil’ hurts Iran – hurts them badly.. So Saudi will continue to pump.
The US is engaged in a new ‘cold war’ with Russia, and ‘cheap oil’ hurts Russia – hurts them badly – much more than sanctions over Ukraine ever will. So the US will continue to pump.

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By: brotherkenny4 http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2543 Fri, 05 Dec 2014 16:09:57 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2543 I think this is somewhat of a false argument and while I understand it’s an attempt to try and press for something more meaningful and long term as a solution, it misses the point and thus can be made to look like falseness by those of an opposed disposition. The low price is an artificially generated thing to alter the energy investment slants that have been going on for a while. Wind, solar, biofuels and electric vehicles are poised to make significant advances in the next 10 years, even while they grow at record paces now. The oil producers are very afraid of major breakthroughs and reductions in cost for alternative technologies, and if oil prices were to stay high those investments would be more strongly supported from a simple economic standpoint (although there are many broader social benefits, americans only care about money, and while their are many economic arguments such as money not spent on foreign oils stay in the US and helps our broader economy that’s too complex a concept for the typical American, and of course it is an irrelevant fact for the typical financial investor since they don’t really care about the USA anyway and money is their god). So, this latest decline in oil price is intended to stall investments including the alternative oil production techniques, but it actually targets all alternative energy. The intent is to stall the inevitable. However, this price cannot be sustained for long. Most of the OPEC nations are like a frivolous consumer in that they spend to their full capability and then cannot scale back when times are harder, because they are a compulsive and irrational consumer. Most of the OPEC nations can only take this low price for a short time or they will suffer major economic strains, since they have not built any sustainable alternative to their singular commodity wealth system. So, don’t use the low temporary price as the argument, you can still say that prices will rise drastically in the near future and will price in alternatives, alternatives that should be greener alternatives if we have a choice, because for some true americans, the broader social good is important too. Besides, if we are to make a change it should be away from a global commodity that will continue to become more scarce and higher priced. This is not speculation, a commodity that is increasing scarce and more costly to produce will always drag on an economy if it is widely used, and it will always go up in price.

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By: schwankmoe http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2540 Fri, 05 Dec 2014 15:46:27 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2540 “As soon as you see the term “Tar sands” used to describe “Oil sands”, you know you are reading a green biased article”

how so? the raw stuff being extracted from those deposits is bitumen. the word ‘tar’ is much more descriptive of bitumen than ‘oil’.

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By: Marpy http://blogs.reuters.com/anatole-kaletsky/2014/12/05/price-slump-shows-its-time-to-stop-exploring-for-new-sources-of-oil/#comment-2530 Fri, 05 Dec 2014 14:01:11 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=1570#comment-2530 As soon as you see the term “Tar sands” used to describe “Oil sands”, you know you are reading a green biased article = zero credibility. As in Waist of time.

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