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

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.

 

Why not just threaten Saudi Arabia to cut back production?

 

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

 

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.

 

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.

 

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

 

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

 

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?