IMO, oil bottom will only arrive after iran comes back online. Afterall, the market has to know what is the maximum production iran can export daily. Else, it will always be a guessing game.
It's coming!
Dear BHP writes down USD7 billion on its shale, almost USD13 billion since 2012. Value of its remaining onshore US assets is USD16 billion.
BHP
I'm both surprised and not surprised. I'm not surprised that they have got a huge write off but surprised that BHP still have USD16 billion left. If oil remains around 30 bucks, I'm pretty sure more of that USD16 billion has to be written off too.
(15-01-2016, 10:17 AM)weijian Wrote: [ -> ] (13-01-2016, 02:09 PM)kbl Wrote: [ -> ]Good Afternoon Everyone.
Futures market tumble shows US oil will not reach us$50 for 6.5 years.
http://www.businesstimes.com.sg/energy-c...r-65-years
thats funny. i dont remember any previous 3yr/5yr futures contract saying oil will be 30usd in jan2016.
The oil price forecasts, by either the insiders and industrial experts, are often ended up with surprises.
The most common forecast, about months ago, is $50 pb. I reckon, we may see more surprises in years ahead.
The best is to ignore the top level forecast, and focus on bottom-up approach on companies, IMO
For me, I am looking at oil price according to demand/supply.
Demand will slowly pick up no doubt, ceteris paribus in economic conditions
However supply of oil is different. At current situation, iran and US conventional sources will be adding in their supply this year onwards.
When oil hits about US$50, shale oil and the small US family size producers will join in the fray.
From this line of reasoning, I am looking at how oil majors will plan their CAPEX and how oil demand derive companies like Keppel/Semb marine or the other group , Hai Leck/PEC will benefit/lose according to these oil majors plans.
Oil will stay low for more than 3 years kind of thing ( MY GUESS ). Even when Oil price pick-up within or outside 3 years, is more of major policy change of Saudi. Price is cyclic but may not be at the profitable level for sea rig operation considering we have shale oil supply at the ceiling. To me is a game changer for Kep Corp and SBM.
This low oil price environment is engineered by them..
A master tactician will not end the game until they see their opponents to the end, and make sure there's no return. I believe it will be a bottom only when middle east SWF starts buying the heavily beaten down companies.
(15-01-2016, 11:11 AM)CY09 Wrote: [ -> ]For me, I am looking at oil price according to demand/supply.
Demand will slowly pick up no doubt, ceteris paribus in economic conditions
However supply of oil is different. At current situation, iran and US conventional sources will be adding in their supply this year onwards.
When oil hits about US$50, shale oil and the small US family size producers will join in the fray.
From this line of reasoning, I am looking at how oil majors will plan their CAPEX and how oil demand derive companies like Keppel/Semb marine or the other group , Hai Leck/PEC will benefit/lose according to these oil majors plans.
For demand, Renewables are becoming more mainstream and starting to enjoy economies of scale as well as government funding for clean energy. this will affect the oil market to some degree.
http://www.bloomberg.com/news/articles/2...es-crashed
though demand for oil mostly arises from transportation sector, if electricity generation costs ever get cheap enough, it might be more economical for people and things to be transported by electric cars/trucks and electric trains. though it will be quite a few years before we get a mainstream hybrid electric plane, once cars switch over to electricity, it will definitely affect oil demand. This is something the arabs are also likely afraid of.