$35 handle. Time for me to start really worrying now. This is really really bad.
This eventually has to be good for gas… Kill residual production. What say you?
what’s your exposure?
My primary exposure is that I live in Alberta.
There will be blood, and I like it! Selling Mar '16 30 CL puts now pays .60, so 2%. When we hit $32, next week, I might start selling those, want to get paid more than 2%. Hoping we see some erratic prices on the fed meeting day.
Well, if you want to migrate to Texas, I have a spare bedroom for rent. I don’t accept loonies/CAD as payment though.
Thankfully I can keep my head above water on my side biz income and I don’t work directly in oil and gas. But my house is definitely dropping in value and I’m telling you, this place is very bleak right now. The trending term in the workplace here is “Termination Tuesday.” Everyone goes into work Monday to Wednesday expecting to be fired. Relief increases throughout the week, until Sunday comes around and then you dread Monday morning. I’ve never seen something so bleak in my career, much worse than 2008. Everyone, not even just oil and gas, is just hacksawing their workforce. Unbelievable here. Really sad too.
^thats nuts. rooting for you Geo
So I was wondering, do you guys think OPEC shorts oil futures/puts? I mean, when oil is high, and they know they are going to start on a mission to get rid of the high cost producers, can’t they just start shorting to hedge the damage they will take? As equity in the position grows they could pile on new shorts.
Also when oil gets down quite low like $40, but isn’t going down fast enough for their tastes, why wouldn’t they just short it themselves, they got tons of cash, make some bucks to balance their losses while accomplishing the goal?
Sure that’s insider trading, but do they even have laws against that?
^ You’re basically asking whether oil companies hedge. Yes they do
The severity of the contango is incredible. Is there nowhere left to store it or is the absolute potential per barrel to low to cover the cost? Anybody know where I can find a tanker truck for $500?
probably in Alberta somewhere, abandoned.
sad state in our oily state. i know someone who’s staying in a 800 man camp that only has about 15 occupants currently in central north alberta. lots of people coming back home these days.
good luck to you geo. i have to admit that although i predicted carnage for the energy sector, i didn’t forsee so much spillover to other sectors.
Houston '87 all over again.
http://www.theguardian.com/world/2015/dec/14/canada-oil-production-crisis-suicide-alberta
that’s really just the nature of calgary though isn’t it? expats get brought in during the boom cycle and the only people who stick around when it crashes are the locals. Beautiful place but lets not be surprised at the outcomes
Similar to waiting for someone that is terminally ill to die. You know it’s coming, but it still stings when it happens.
Hard to see the upside these days, recovery seems like a long shot. But I’m sure that’s what it seemed like in the 80’s too, and Calgary is much more diversified today. I’m still employed like I said, and I’m not in oil and gas. But layoffs are far beyond the sector now and we are looking at a 10-20% workforce reduction next year as well. Hopeful we can ride this out until the upside. It’s certainly worse than the '09 crash. That was nothing compared to this.
Bump in the name of $31 oil.
yowza. this has gone on far longer than i ever would have predicted. just nasty out there.
I wouldn’t say longer, but definitely lower. I think I’m going to finally sit on my hands. Not comforting that the XLE is not even down 50% from its highs.
This has to be fantastic for natural gas though.
my buddies laughed at me 6 months ago when i told they were dumb buying UCO, saying oil cant go lower and will eventually go up