Yeah, though I’m not sure how Syncrude fits in with those #'s. Some of Suncor’s production is not WCS but synthetic which trades better. My point was cash operating costs == per barrel cost. Some companies still generate EBITDA at these levels and the oil will flow as long as that’s true. New production won’t happen if the forward curve can’t finance it. This is why it will ultimately recover IMO. EDIT: Sorry, I see Tommy already mentioned synthetic. My main point is folks need to look at marginal variable cost, not total cost, when asking why oil is still flowing. Fixed costs are already sunk.
The numbers don’t seem very transparent because I’m seeing different numbers in oil costs in different places. All I know is the fundamentals are still terrible, this glut is not going anywhere, and there was a 4.8 million barrel build in inventories reported today by the US EIA for the week of dec 8. the bulls were hoping for a draw, but instead they got a fat build. holding short still and so far that’s keeping me in the green.
How exciting, please keep us updated on a tick-by-tick basis.
No prob bud, I can send u updates directly if you want? You got myspace?
Bump. Who went long WTI? How did that work out for you?
short is still the best trade for this. there’s a lot of pain to come, for markets in general. TSX should be hurt the most.
Say what you will about PA, the guy makes some good calls
PA does make good calls…verifiable ones on this forum if you go back to his previous posts.
UWTI - just looked at this. 3x bull oil. wow this might be fun
Did someone delete a post or are the PA comments random idolization?
^random
I was just looking at the thread and see that on 9/3 when oil was in the mid 40’s he said oil would have to hit low 30’s before he would consider buying. My only point is that he sticks his neck out with quantifiable, clear calls. Sometimes they backfire, but sometimes he makes some good judgements. A lot of people here just wish wash around or lack any real sense of the markets. I see a lot of, “prices are lower than they were, what a buy” threads around here.
Let’s not forget his Shanghai mega-cap long and short SPX puts…
I agree though, there is some wishy-washy style of analysis out here that feel more emotionally gauged than analytical.
Since it can’t go below zero,risk/return parity is profitable right now.If you invest in UWTI you can loose %100 of your money so soon,on the other hand you can hit %1000 return as well in a short period of time.
what happened to purealpha? where is he
Probably working at McDonalds after China blew up his portfolio.
On vacation. He wanted to avoid western devils and go someplace exclusive. Can’t even find it on TripAdvisor. He’s at an all-inclusive resort in Cuba called “Gitmo.”
3.4 Stars
https://plus.google.com/106568354491101775421/about?gl=US&hl=en-US
http://www.cafe.com/tripadvisor-reviews-of-the-guantanamo-bay-detention-camp/
any shorts?
Most oil producers are at above variable cost (USD/b 10 to 25). They’re covering their extraction cost, and paying a portion of their debts. However, they will not make new investments. Factoring in investments, their breakeven is between USD/b 45 and 75.
Interest rates increased. Cost of debt increased.
US added 4M bpd of shale over the past 5 years. The depletion rate of shale wells is between 40% and 70% in the first year of production. The US needs approximately 1200 rigs to maintain production level. Currently oil rigs count is at 500 rigs. Drilling to production takes 3 months (add few more months for piping if not available).
Iran never stopped production. It was selling to China and other Asian countries (and some Europeans via international brokers). What it lacked was fresh investments. With fresh investments, it will need few years to reach their target of 5Mbpd.
Saudi Arabia, and Russia are at max production.
Peak oil of conventional sources was reached in 2012. Most of the new investments are in unconventional sources: Shale, Sand oil, pre salt, arctic, and deep water.
Forecasted demand in 2016 will increase by 1.2Mbpd
Without subsidies and tax credits, oil is cheaper than ALL renewables up to a price point of USD/b 120. Dirty coal is cheaper though.
Now make your bet