Oil Prices

[specuvestor]

^^ CF its about delta. Not only is shale not going to grow as previously projected but it is going to decline. "Incredible" since shale producers claim they are profitable at $50 yet aggregate production looks like will be declining soon. What is said is not matching action. The fat lady will sing when these overleveraged producers start to bankrupt

And if oil gets marked at year low, shale producers capacity to borrow will drop dramatically as their P1 reserve estimate collapses.

It's about delta. The low cost shale will continue to pump but new capacity will be limited. The growth of shale has plateau if oil stays below US$80 WTI. Business investments don't start and go based on what is oil price is tomorrow and next week. The uncertain outlook for oil to move back above US$100 is likely to crimp the whoole space for next 12 months at least.

GCC will be hurt by the lower oil price but their main expenditure is capex which actually can be deferred. US startegic interest will be hurt as their ambition to be energy sufficient with shale will be delayed, if ever.

Biggest beneficiary is actually China but net net I think the GCC and US had come to an agreement that this is a worthwhile tradeoff vs the global political outcome.

[Image: eqtf1j.jpg]

http://www.bloomberg.com/news/2014-10-17...om-it.html

I cant believe anyone would start a shale project based on break even price of $140. That makes no sense whatsoever.

My rough feel is that shale projects break even is roughly $80-90 oil price which is why I posted earlier shale should be losing money at $85 WTI

OPEC is important because they are major exporter. US is important because they are major importer. There is a difference. And China is major player increasingly

A bit ironic that I was championing shale more than a year ago in this forum when people were still skeptical but when people are fearful now i am saying shale production likely plateau if oil price remains $80 WTI or below

It will be a major event if petrobras defaults, even bigger than Argentina. And Greece is having elections in Jan. 2015 is not shaping up well

http://www.reuters.com/article/2014/12/2...JB20141229

(Reuters) - Petrobras, Brazil's state-run oil company, could be declared in technical default on some of its foreign debt as early as Tuesday if bondholders pursue efforts to force it to speed up its assessment of losses in a giant corruption scandal.

The push, led by New York-based Aurelius Capital, applies to $54 billion of Petrobras bonds governed by U.S. law in New York state. Aurelius, a "distressed debt" fund, is asking investors to put the company into default as "a precautionary step," according to a Dec. 29 letter from the firm reviewed by Reuters.