Oil Prices

[Art or Science]

Big boys have recorded either losses or drop in profits..
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REUTERS: Exxon Mobil Corp on Tuesday reported a 58 percent drop in quarterly profit as low oil prices hurt results at the world's largest publicly traded oil company.

The Irving, Texas company reported that fourth-quarter profit slid to US$2.78 billion, or 67 cents per share, from US$6.57 billion, or US$1.56 per share, in the same period a year earlier.

Exxon said its oil and gas output rose 4.8 percent in the fourth quarter.

http://www.channelnewsasia.com/news/busi...81488.html

BP slumped to its biggest annual loss last year and announced thousands more job cuts on Tuesday, showing that even one of the nimblest oil producers is struggling in the worst market downturn in over a decade.

http://www.channelnewsasia.com/news/busi...80492.html

[CY09]

More concerned about the downstream issues esp when BP employs quite a lot in Sg under its refining and trading arm.

Looks like Singapore will be bruised quite badly in this oil downturn. Can't wait to see residential ppty foreclosure, vacant office, industrial and retail units. Boom time is probably over for Singapore

Agree with GG view that this crisis will be over only when we see the many over-leveraged o&g firms die off.

[BaronWaffet]

CHEAP OIL PRICES AND INVESTMENT

Crude has fallen from $110 a barrel to $29 a barrel. This goes against all market laws especially when demand has risen steadily from 84 million barrels a day to 95 million barrels a day between 2010 and 2015.

The question is why are oil players keeping oil prices low by increasing supply when it works against their profits?

When oil was $110 a barrel a whole load of money world wide was pumped into investing into renewable energies and new oil rigs. Market forces are making sure that all these weak new players will be wiped clean. New oil investments were made assuming oil price would go up....no down 3 times. Oil has to be above $70 a barrel for project like the Canadian oil sands to be profitable.

In 2015/2016 Many new oil rigs will be cancelled. Many new investment in renewable energy scrapped. Why bother with such cheap oil? This will actually serve the long term interest of players like OPEC, Exxon and many more....

The cancelled projects will take its toll in mid 2016. With oil production being cut by players leaving and the shortage of rigs. A rig is a billion to build and 3 years to complete.....by the Time new orders begin to come in with oil prices moving up again....the market will be in short supply for 3 years.

A smart investor will not be deceive. Oil is black gold. Each day the world uses 95 million barrels and it will and can never be replaced. Not for millions of years. With each day passed the oil is gone from the surface of earth. Every industry from casinos...to factories....to medical all needs electricity. A power plant burns thousands of barrels of diesel just to provide the power needed. If the oil one day begin to slowly run out....you can be sure that every last barrel would dug out from every nook and cranny.

Right now I have my money on Keppel, Sem Corp and Exxon.

[HitandRun]

More concerned about the downstream issues esp when BP employs quite a lot in Sg under its refining and trading arm.

If you look a bit more closely at any oil major's mid and downstream businesses, they should be doing great, especially compared against their upstream business (i.e. oil & gas exploration and production).

[Art or Science]

More concerned about the downstream issues esp when BP employs quite a lot in Sg under its refining and trading arm.

If you look a bit more closely at any oil major's mid and downstream businesses, they should be doing great, especially compared against their upstream business (i.e. oil & gas exploration and production).

Yeah, mid and downstream business doing better.

http://cdn.exxonmobil.com/~/media/global...s_4q15.pdf

[gzbkel]

Looks like Singapore will be bruised quite badly in this oil downturn. Can't wait to see residential ppty foreclosure, vacant office, industrial and retail units. Boom time is probably over for Singapore

Hi CY09, perhaps I am slow, but I am not able to see the connection.
Some people in oil-related business may get retrenched, and out of these, some may get their property foreclosed if they are over-leveraged. But surely this will be a minority, out of total Singapore population. And why would low oil prices cause companies to vacate offices, factories, and retail units?
Could you elaborate more?

[piggo]

Looks like Singapore will be bruised quite badly in this oil downturn. Can't wait to see residential ppty foreclosure, vacant office, industrial and retail units. Boom time is probably over for Singapore

Hi CY09, perhaps I am slow, but I am not able to see the connection.
Some people in oil-related business may get retrenched, and out of these, some may get their property foreclosed if they are over-leveraged. But surely this will be a minority, out of total Singapore population. And why would low oil prices cause companies to vacate offices, factories, and retail units?
Could you elaborate more?

Maybe he refers to low oil price, but no demand picking up and with all the negative sentiments other sectors (i.e retail, entertainment etc.) in Singapore will also be affected. Then again, that's quite a negative outlook considering how diversified SG is... Generally port cities can last up to 100+ years, we should still have at least 49 good years to go.

[CityFarmer]

More concerned about the downstream issues esp when BP employs quite a lot in Sg under its refining and trading arm.

If you look a bit more closely at any oil major's mid and downstream businesses, they should be doing great, especially compared against their upstream business (i.e. oil & gas exploration and production).

In Singapore, the refinery and chemical biz are in good shape, but not on those supporting O&G e.g. rig-builder and service providers. I don't have the statistic, but an impression after the recent EDB briefing.

[BlueKelah]

More concerned about the downstream issues esp when BP employs quite a lot in Sg under its refining and trading arm.

Looks like Singapore will be bruised quite badly in this oil downturn. Can't wait to see residential ppty foreclosure, vacant office, industrial and retail units. Boom time is probably over for Singapore

Agree with GG view that this crisis will be over only when we see the many over-leveraged o&g firms die off.

It will definitely get ugly when the next crisis blows through Singapore again as property asset prices are once again over-inflated. But do believe property prices will be more impacted by tightening of CREDIT by the banks. Sure other factors like gov policy and economy and supply/demand contribute but if banks dun lend then its downhill for properties.

Last week's oil price increase was just short covering from the Russian wanting to work with OPEC news. Now that that's not happening, it would be hard for any other event short of a war to push oil up as supply continues to outpace demand, so expect sub $30 price again.

Over-leverage OnG firms are already starting to die off in USA.
http://www.ibtimes.com/us-oil-sector-ban...ry-2272968
{Among E&P firms, 42 filed for bankruptcy protection in 2015, together involving around $17 billion in cumulative debt, Haynes and Boone found in a Jan. 6 report. That’s still less than 1 percent of the estimated 6,000 independent oil and natural gas producers in the U.S.}

But still some way to go, its a cycle, not much "blood on the streets" yet. When you see STI drop 3% a day, that would be some blood

[CityFarmer]

Looks like Singapore will be bruised quite badly in this oil downturn. Can't wait to see residential ppty foreclosure, vacant office, industrial and retail units. Boom time is probably over for Singapore

Hi CY09, perhaps I am slow, but I am not able to see the connection.
Some people in oil-related business may get retrenched, and out of these, some may get their property foreclosed if they are over-leveraged. But surely this will be a minority, out of total Singapore population. And why would low oil prices cause companies to vacate offices, factories, and retail units?
Could you elaborate more?

To provide few inputs into the doubt. More players, may exit Singapore, due to whatever reason(s)...

Another O&M player exits Singapore for Kuala Lumpur
03 Feb 2016 09:00
By Tan Hwee Hwee

IT used to be a tale of two cities with Singapore and Kuala Lumpur each competing to host regional headquarters for offshore and marine (OM) players. But against a backdrop of persistently low oil prices, fresh concerns have emerged over Singapore's competitiveness as an O&M hub, following a decision made by a fourth top-tier international subsea contractor to ship out most of its operations to Kuala Lumpur.

A fortnight ago, Oslo and Nasdaq-listed Subsea 7 reached a decision to move its regional headquarters to Kuala Lumpur from Singapore.
...
Source: Business Times

Maersk Line shuts Singapore office, moves Asia HQ to Hong Kong
SINGAPORE (Feb 3): Maersk Line will combine two regions in Asia and move its regional headquarters from Singapore to Hong Kong, in a restructuring that will result in 4,000 layoffs, Shipping Watch reported.

With the move, a number of functions will be discontinued at the Singapore office. Maersk Line's regional manager, Lars Mikael Jensen, has been posted back to the carrier's global HQ in Copenhagen.
...
http://www.theedgemarkets.com/sg/article...-hong-kong