Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 3
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I meant to add a question mark to my topic.
Disclaimer— I don’t know anything about the oil business.
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Oil
Down almost 4 percent tonight.
No. of Recommendations: 21
I wouldn't lose much sleep. It's not as if there is anyone who is unaware that (a) the oil business is very cyclical, and (b) not in a predictable way.
It's a shame that Berkshire's OXY position is underwater by 1/3, but I think it's mainly a wager on the long term, with a dividend to while away the years. Oil will have value for a very long time, just sometimes less than at other times.
Jim
No. of Recommendations: 1
" I wouldn't lose much sleep. It's not as if there is anyone who is unaware that (a) the oil business is very cyclical, and (b) not in a predictable way.
It's a shame that Berkshire's OXY position is underwater by 1/3, but I think it's mainly a wager on the long term, with a dividend to while away the years. Oil will have value for a very long time, just sometimes less than at other times.
Jim"
Good morning old bud, we can always count on the mayor. Has it occurred to you that the Saudis and other members of OPEC may have a plan to make sure it's never cost effective to, drill baby drill? Do you think big American based oil companies will invest 100's of billions into long range projects, at 58 $$ oil? Thank you.
BTW, I sure hope most of you don't get cnbc globally, this morning's coverage of the annual is painful to watch.
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From the link:
"However, there is substantial variation in break-even costs among firms, with many operators able to profitably drill new wells with the price of WTI as low as $45 per barrel."
DB2
No. of Recommendations: 0
Has it occurred to you that the Saudis and other members of OPEC may have a plan to make sure it's never cost effective to, drill baby drill?
Surely they do have such plans. However, that isn't the real question. The real question is if they've been able to grow other industries to replace the lost oil income when it is being sold at "half price". If they have grown other industries, then they can relatively easily do it, maybe with a little belt tightening. But if they have not grown other industries yet, then they cannot do so without severe economic issues.
(They have to diversify their industry anyway because someday oil demand will slow and begin a long-term decline.)
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The real question is if they've been able to grow other industries to replace the lost oil income when it is being sold at "half price".
Back in the '80s I had a discussion with a geologist who had just spent a couple of years in Saudi Arabia compiling an inventory of their non-oil minerals. He indicated they had plenty of resources once their oil runs low.
DB2
No. of Recommendations: 8
Back in the '80s I had a discussion with a geologist who had just spent a couple of years in Saudi Arabia compiling an inventory of their non-oil minerals. He indicated they had plenty of resources once their oil runs low.
It is not possible to replace much of the Saudi oil business with other minerals. The market cap of Saudi Aramco is twice that of the 10 largest mining companies in the world combined.
