If I were Trump, I'd "bailout/stimulate" shale producers.

[Bobbybax]

But whats done is done. Who has the appetite to let them fail?

That's the excuse used every single time.

 

[IAS_LLC]

That's the excuse used every single time.

Fair enough. And it will be the excuse this time, next time, etc. Just repackaged for the world at the time.

 

[Pekelo]

Why not just threaten Saudi Arabia to cut back production?

 

[IAS_LLC]

Why not just threaten Saudi Arabia to cut back production?

Because I'd rather screw the Russians somehow. Fk those guys!

 

[Bobbybax]

Do you remember the AIG bailout? It was really a bailout of Goldman Sachs and other broker dealers who were owed huge sums on derivative contracts.

It was sold as a bailout to life insurance holders which was complete BS as that was a different entity.

Any shale money will go first to senior debt holders. Congratulations, you just further enriched billionaire hedge fund managers.

 

[newwurldmn]

The Saudis actually wanted to keep a lid on production, my understanding was that the Russians blew the deal up. The only rational thing for the Saudis to do at that point, given they have the lowest cost production and are in a better position to weather it out, is to max output and hurt the rest of the players enough that they come back to the table.
On the plus side we all benefit from lower energy costs which positively benefit almost every sector of our economy except the oil industry. So it's a plus factor in minimizing the impact of the Trump recession. Kind of ironic really that it's responsible in part for driving down the price of stocks in companies that actually benefit from low oil prices.

I have read research that came to the conclusion that high oil prices are good for the stock market. If oil prices are high then there is a lot of investment made by the oil and energy industries.

It’s interesting if you think about it as oil is kind of like real estate. Everyone is short it.

 

[Sig]

Besides production costs, Doesn't Saudi's govt have a budget /social programs that are dependent on oil prices that are MUCH higher? Maybe that was one of the other opec memebers

Supposedly $$70-$80 a barrel for KSA and $50 for Russia. I think that's both a soft number and one that would require a downturn that lasts years. KSA along has decent cash reserves, the ability to take on significant debt, and an oil company that they own the vast majority of with a market cap of more than a trillion dollars even today. Interesting article on this at https://www.forbes.com/sites/ellenr...bia-doesnt-actually-need-70-oil/#401d32397ee5

 

[Sig]

I have read research that came to the conclusion that high oil prices are good for the stock market. If oil prices are high then there is a lot of investment made by the oil and energy industries.

It’s interesting if you think about it as oil is kind of like real estate. Everyone is short it.

If you come across it IM me the link, would be interested to read it.

 

[bone]

Help industry weather the storm.

Bull on several fronts. Firstly, Producers hedge themselves. I guarantee you that quite a few producers are short calendar strips - especially given how shaky the market has been since late January. Second, as I mentioned previously, producers already are subsidized via the MLP partnership tax structure. Finally, if Saudi oil can arrive at a Louisiana refinery at a cost structure 30% cheaper than Permian Basin crude - then so be it. That's how free market economics works. The Saudis can only provide a somewhat temporary dislocation to the market - they simply can't supply the entire world.

 

[Sig]

Bull on several fronts. Firstly, Producers hedge themselves. I guarantee you that quite a few producers are short calendar strips - especially given how shaky the market has been since late January. Second, as I mentioned previously, producers already are subsidized via the MLP partnership tax structure. Finally, if Saudi oil can arrive at a Louisiana refinery at a cost structure 30% cheaper than Permian Basin crude - then so be it. That's how free market economics works. The Saudis can only provide a somewhat temporary dislocation to the market - they simply can't supply the entire world.

Does much Saudi oil make it to the gulf anymore anyway? Are there retooling issues with refineries to switch from WTI to sour crude? I just don't know as much as I'd like about the mechanics of all that, but from my naive view it seems like there's a few months buffer just in rearranging the current oil supply chain?