Black Swan Coated With Crude Oil

[crashmonitor]

Saudis Say Non-OPEC Producers Must Cut Output, Take Responsibility for Oil's Drop

Oil Crash Wipes $11.7 Billion From Buyout Firms’ Holdings

Libya Oil Output Drops as Fighting Spreads to Third Oil Port

Ah so the Saudis say it's everyone else's fault!

Can't help thinking the Saudis are shooting themselves in the foot.....the market falls every time they make a startement. They don't need to cut production, all they need to say is we will cut production if oil falls below $55. They won't have to, the Market will respond with a $5 gain immediately.

Edited December 22, 2014 by crashmonitor

[billybong]

The oil chart posted above seems to match the direction of UK house prices fairly closely.

1980 a peak, 1990 a peak, 2007 a peak, the 90s in the doldrums and the support after 2008 so if oil is going to $20 the HPC would likely be on at the same time.

Edited December 22, 2014 by billybong

[Gigantic Purple Slug]

Can't help thinking the Saudis are shooting themselves in the foot.....the market falls every time they make a startement. They don't need to cut production, all they need to say is we will cut production if oil falls below $55. They won't have to, the Market will respond with a $5 gain immediately.

Saudis may have realised that there is no point them worrying about stuff they can't do anything about.

Let's face it, OPEC has been crap at controlling the oil price in the past. Sure, there were some notable successes, but none recently. This is due to the fact that the members refuse to stick to the targets and a considerable amount of production is now outside OPEC.

I don't think there is any Sauid magic master plan to destroy the russians, the US shale industry or bring the rest of OPEC into line. I think they have realised that they no longer produce enough compared with the rest of the world to control the price, and therefore they do what suits them and disregard any effects that has on anyone else.

If the Saudis did restrict everyone else would just ramp up their production like crazy and say thanks for the higher volumes and higher prices.

[The Masked Tulip]

Saudis may have realised that there is no point them worrying about stuff they can't do anything about.

Let's face it, OPEC has been crap at controlling the oil price in the past. Sure, there were some notable successes, but none recently. This is due to the fact that the members refuse to stick to the targets and a considerable amount of production is now outside OPEC.

I don't think there is any Sauid magic master plan to destroy the russians, the US shale industry or bring the rest of OPEC into line. I think they have realised that they no longer produce enough compared with the rest of the world to control the price, and therefore they do what suits them and disregard any effects that has on anyone else.

If the Saudis did restrict everyone else would just ramp up their production like crazy and say thanks for the higher volumes and higher prices.

Don't forget, the drop in oil first began when the Saudis announced that they would be selling oil to the US cheaper.

[Gigantic Purple Slug]

Don't forget, the drop in oil first began when the Saudis announced that they would be selling oil to the US cheaper.

That's market forces in action. No master plan. No point pumping it if you can't sell it to anyone.

[zugzwang]

Canada's bubble economy going titsup.

http://soberlook.com/2014/12/if-energy-prices-remain-near-current.html

While economists will attempt to analyze the impact of energy prices on various sectors separately, when it comes to Canada, a number of economic components are quite difficult to decouple from one another. What's clear is that this exposure to energy is going to damage the labor markets, squeezing the nation's overextended households. And the knock-on effect won't be limited to a severe slowdown in residential construction growth. Consider for example the expenditures on renovations - something that's been supporting parts of manufacturing and other sectors. This is not going to end well.

The markets are already sensing the contagion effect from energy on the housing market, as Canadian property REITs take a hit. If oil prices remain anywhere near the current levels for a prolonged period - something the Saudis are aiming for (see post) - Canada's economy is in serious trouble.

[Eddie_George]

Canada's bubble economy going titsup.

http://soberlook.com/2014/12/if-energy-prices-remain-near-current.html

Wonder what the effect on hoose prices will be...

[Patfig]

They will go up of course

[frozen_out]

They will go up of course

Where else will the money come from?

[Exiled Canadian]

Last time I was working back in Canada was when the "Loonie" (for that is what the Can$ is called) started to rise significantly against the $US as the economics of the tar sands etc started to be understood. This resulted in a number of manufacturing plants in Canada (particularly in Quebec and Ontario) struggling as their previous cost advantage in US dollar terms was significantly eroded.

I suspect that Canadian manufacturing will rebound if a sustained fall in the oil price leads to a devaluation of the Loonie vs the US dollar. I seem to recall that $60 per barrel was bandied about as the level at which tar sands production was economicall viable (although this was 10 years ago).

[crashmonitor]

http://uk.investing.com/commodities/brent-oil

Going nowhere. The Markets today have tried to continue the Xmas rally (but keep getting pulled back by oil) maybe oil will cancel the Xmas rally this year.

edit. granted the DOW is within spitting distance of another all time high (and the DAX too)...but the FT weighed down by the likes of Royal Dutch Shell and BP is a f**king basket case that can't even manage the 6600 shoulder which had been the default low of the last 18 months and bottom feeders' territory.

Edited December 22, 2014 by crashmonitor

[R K]

http://uk.investing.com/commodities/brent-oil

Going nowhere. The Markets today have tried to continue the Xmas rally (but keep getting pulled back by oil) maybe oil will cancel the Xmas rally this year.

edit. granted the DOW is within spitting distance of another all time high (and the DAX too)...but the FT weighed down by the likes of Royal Dutch Shell and BP is a f**king basket case that can't even manage the 6600 shoulder which had been the default low of the last 18 months and bottom feeders' territory.

huh?

http://stockcharts.com/h-sc/ui?s=$FTSE&p=D&yr=2&mn=0&dy=0&id=p65007963367

[interestrateripoff]

IMF says drop in oil prices to persist, help global growth

At least it's going to fuel growth....

[Captain Cavey]

Where else will the money come from?

1). Selling overpriced property to Asians.

2). Selling overpriced coffee to each other.

3). .... er!, that's it.

What can go wrong, eh?

Edited December 23, 2014 by Captain Cavey

[billybong]

Falling oil prices also have raised risks to financial stability, affecting banks with claims on the energy sector and the currencies of oil-exporting countries. The IMF warned volatility in prices and exchange rates could prompt global risk aversion.

Don't say that the central banks/banks and organisations like the BoE and all its stress tests, stability reports and newly formed committees and authorities etc plus the UK Treasury et al didn't anticipate the possibility of a drop in the oil price

What time wasters. It's no way to run a country.

Edited December 22, 2014 by billybong

[zugzwang]

IMF says drop in oil prices to persist, help global growth

At least it's going to fuel growth....

Like the phud workers at the IMF had any idea the oil crash was going to happen! Missed it completely, just like 2008.

19:59 17.07.2008

WASHINGTON, July 17 (RIA Novosti) - The International Monetary Fund (IMF) has predicted that the global economy will grow 4.1% in 2008, up from an initial forecast of 3.7% in April.

According to the report, published in the World Economic Outlook on Thursday, "global growth is projected to moderate from 5% in 2007 to 4.1% in 2008 and 3.9% in 2009."

[interestrateripoff]

How oil's become the world's most potent weapon: Forget nuclear arms. The U.S. and Saudis are behind an oil price crash that could topple regimes in Russia and Iran - and even sabotage the Scot Nationalists

The fall in the price of oil means that it's cheaper to fill up your car, but what does it mean for Britain's national security? Here, the Economist's Energy Editor EDWARD LUCAS offers a simple guide.

[crashmonitor]

huh?

http://stockcharts.com/h-sc/ui?s=$FTSE&p=D&yr=2&mn=0&dy=0&id=p65007963367

Well may be the last 14 months...few occasions on the chart when the Market has been sub 6600.

Meanwhile the FTSE 100 is starting to become too much of a play on Brent, and commodities are too hot and erratic for me to handle.

What's actually changed since the Market was reeling at 6150 on the oil shock just last week...Brent still struggling at $60. All I can see is that traders have decided it is Santa rally time.

I was 5% up for the quarter having bought in during the Ebola panic, sold out near the top in November. Then tried to catch a falling knife on the oil shock, lost it , regained it and now 7.5% up for the quarter.

Time to take some of that. Still think the market will end 6750...but daren't risk it.

FT still a good hold for those who are in it for the long term imo.

Edited December 23, 2014 by crashmonitor

[shindigger]

Wonder what the effect on hoose prices will be...

They'll go down eh?

[interestrateripoff]

http://www.bbc.co.uk/news/uk-scotland-scotland-business-30569373

A plan for a summit to look at the challenges facing the North Sea oil industry has been announced by Aberdeen City Council.

Council leader Jenny Laing said the UK and Scottish governments, trade unions and industry bodies needed "to get round the table as soon as possible".

The Labour councillor said a "strategic plan" was required to save jobs as the price of oil continued to fall.

Labour called on Nicola Sturgeon and David Cameron to attend the summit.

It comes after a warning that the UK's oil industry is in "crisis".

On Thursday, Robin Allan, chairman of the independent explorers' association Brindex, told the BBC that the industry was "close to collapse".

He claimed almost no new projects in the North Sea were profitable with oil below $60 a barrel.

However, Sir Ian Wood, another leading industry figure, said Mr Allan's warning was "well over-the-top and far too dramatic".

Well I'm sure a meeting will help!!!

What next a major leaflet campaign?

[crashmonitor]

If they're going down, hell the UK and US are going down with them. Make no mistake the UK has bigger interests in oil than its consumption alone would suggest.

http://www.ft.com/cms/s/0/63c7786c-89bc-11e4-8daa-00144feabdc0.html#axzz3MiOQo2pv

Edited December 23, 2014 by crashmonitor

[billybong]

Some more links on Opec/20$ oil.

http://

citywire.co.uk/money/tuesday-papers-opec-leader-vows-not-to-cut-oil-output/a790870

http://

www.alarab.co.uk/en/?id=4222

http://

www.aljazeera.com/news/middleeast/2014/12/gulf-opec-members-refuse-cut-oil-output-2014122204456675415.html

http://

www.investmentweek.co.uk/investment-week/news/2388024/opec-leader-vows-to-stand-firm-even-if-oil-hits-usd20

[interestrateripoff]

20 Stunning Facts About Energy Jobs In The US

For all those who think the upcoming carnage to the shale industry will be "contained" we refer to the following research report from the Manhattan Institute for Policy Research. For the impatient ones, here is the punchline: "The $300–$400 billion overall annual economic gain from the oil & gas boom has been greater than the average annual GDP growth of $200–$300 billion in recent years—in other words, the economy would have continued in recession if it were not for the unplanned expansion of the oil & gas sector."

[interestrateripoff]

http://www.manhattan-institute.org/html/pgi_04.htm#.VJnOy__jAA

• Overall U.S. employment has yet to return to its prerecession level, but the number of oil & gas jobs has grown 40 percent since then.
• In the 10 states at the epicenter of oil & gas growth, overall statewide employment gains have greatly outpaced the national average.
• A broad array of small and midsize oil & gas companies are propelling record economic and jobs gains—not just in the oil fields but across the economy.
• America’s hydrocarbon revolution and its associated job creation are almost entirely the result of drilling & production by more than 20,000 small and midsize businesses, not a handful of “Big Oil” companies. In fact, the typical firm in the oil & gas industry employs fewer than 15 people.
• The shale oil & gas revolution has been the nation’s biggest single creator of solid, middle-class jobs—throughout the economy, from construction to services to information technology.
• Overall, nearly 1 million Americans work directly in the oil & gas industry, and a total of 10 million jobs are associated with that industry.
• Oil & gas jobs are widely geographically dispersed and have already had a significant impact in more than a dozen states: 16 states have more than 150,000 jobs directly in the oil & gas sector and hundreds of thousands more jobs due to growth in that sector.
• In recent years, America’s oil & gas boom has added $300–$400 billion annually to the economy—without this contribution, GDP growth would have been negative and the nation would have continued to be in recession.
• The resources, technology, infrastructure, and thousands of small and midsize businesses are capable of producing even more growth and many more jobs, so long as policymakers do not obstruct progress in the oil & gas sector.

O dear...

[Qetesuesi]

Good link IRRO. However, the other side of the coin is that the rise of the US oil shale industry would never have even got started without a persistent high-teens or even three-figure oil price regime over recent years. Had prices been as low since 2008-9 as they now look to be heading, that would have provided its own fillip to the US economy. Would it really have been in recession without shale?