rubid, spot on as far as exploring. Deep sea drilling break even is oil around 60 bucks. Land drilling, (Not shale) break even is an easy 8 bucks. Cost of Drilling has decreased a huge % in the last few months. Casing (Steel) is far cheaper, but the Majors and some minors locked in Casing back when oil was trading in the 100s and steel was higher. Shale drilling is coming to a stop due to the cost of getting the oil/gas out of shale and the transportation cost to get it to pipes. However, we had a record quarter and a year with our drilling projects. Smaller drillers, drilling on land are in a far better cash position and will be leading exploration.
According to Sarah Palin there are very good oil reserves in Alaska, does anybody know if crude is being extracted from Alaskan soil? USA should start taking advantage of those reserves massively and we would be saving some good cash as off shore extraction is so expensive.
Oil could reach $25 and jim rogers will still be claiming its all 'forced liquidation' just so he can get his minions hold tight in his ETFs
on Jan09 crude oil (CL) contract closed on 12/19/08 around $33.50 where as Feb09 closed around $42.50 giving the Feb09/Jan09 ( long/short) spread difference of $9 dollars => $9000 for the spread. Now the Mar09/Feb09 ( long/short) crude oil spread is $3 => $3000 . My prediction is at Feb09 contract expire time this spread will be $6 => 6000 . Here are my reasons for this spread increase 1) today we saw Feb09 crude $39.xx 2) Opec is talking 3 rd cut , this talk keep Mar09 spread increase around Jan 20 th 3) many news posts show there is lots of physical crude waiting in ships for deliavary 4) couple of analysts are skeptical weather OPEC can do total 4.2 m. barrel cut stating Jan 1 st, they say it takes more than 1 month to happen the full 4.2 m barrel even if OPEC wanted to do it seriously . 5) only recently saudis implemented 100% their old cut one before this 2.2 mil. I appreciate good discussion on this one.
remember when the morons here on ET were saying the absurd oil price , and other commodes , was justified? those morons are gone.
Folks do not get me wrong , I am NOT advocating any oil price rise soon.. For my above prediction inorder to become true all is needed is $3 drop ( in addition to current existing $3 diff )in Feb09 contract relative to Mar09 contract , this can happen mostly in the last week of Feb09 contract ( similar to as it happened in case of Jan09 contract expire week )