OIL WILL NEVER GO UP!!!!!!!
Petroleum is going the way of the whale oil. Millennials don't buy as much cars, don't drive as much and are inclined to purchase small cars. The world is heading towards more efficiency.
Iran will start to export oil, Saudi Arabia will get buttmad and try to depress prices further.
If the world were to fall into recession or depression, demand for oil will drop even more. The world isn't predicted to enter any economic boom soon, so demand for oil will not increase.
Don't invest in Royal Dutch Shell, these dumbasses were wasting millions trying to drill in the arctic right before oil collapsed.
>millennials don't buy as much cars
Because they can't afford to anon people will still buy cars because they want to get laid, what are you going to do, take the bus to the bar and then tell the skank you pick up 'hold on we need to get the subway back to my place'
>tfw invested in Royal Dutch Shell
>tfw down 10% despite buying at 52 week lows
>implying demand hasn't fallen and won't continue to fall
Even if opec got their shit together, highly unlikely because Iran and SA hate each other, There is still an oversupply combine that with falling demand and you get no increase in price. American oil producers are already rekt and saudi reserves are a mystery they may already be near empty or nowhere near empty but that won't have an affect on demand.
Hey, I'm also invested in Euro and Britbong trackers.
Britain is pretty heavily exposed to this area. Oil is about 12% of the FTSE. At least my European, US and Asian index tracker funds are less impacted. The general bear market on the other hand... at least I'm not cashing out for a long while yet.
Oh, I never made any mention of that. Oversupply is fucking my precious blue chips over big time. I'm too busy with work to have any investing strategy at the moment bar "buy and hold", so I'm sitting this one out... it's probably going to be a long, painful and bumpy ride.
>Even if opec got their shit together
It will happen, maybe not in a few months, but it will. No one likes a budget deficit.
>American oil producers are already rekt
picturerelated.jpg proves, that US has not properly tasted the fruits of The Great Saudi Oilrektering of 2015 just not yet. When the chart goes downhill, then this is the time the real rekk is coming on. It's like with coal prices- today murrican coal producer Arch coal got rekt with a chapter banktruptcy. Shit like EVEP and MCEP and all the other companies on (and off) the stock market need to outrekk Saudi reserves or Saudis need to rekk them, before the Oil gets back to 100. Only massive bankruptcies will end this madness.
>people will stop driving cars
>nothing will be made from plastic
>nobody will need pharmaceuticals
No. Crude oil is going nowhere. The infrastructure of the developed world is built on crude oil products.
If anything, low oil prices make substitutes even more uneconomic.
The cure for low oil prices is low oil prices.
bankruptcy doesn't imply end of oil production. There are plenty of investors who will buy up bankrupt companies and produce oil because they think one day the price will get to a profitable point.
>This isn't permanent, I just have to make it through this lull in the market then I will be rich.
Don't forget Iraqi/Kurdistani/Libyan oil production is going to increase as those areas get their terrorist problem resolved and the Iran sanctions are coming down.
>It will happen, maybe not in a few months, but it will. No one likes a budget deficit.
This is why SA is thinking about privatizing Aramco. If that happens opec is over.
These people don't want give up marketshare, opec is broken it is like a tragedy of the commons situation. They all have a resource and if the could collectively manage it they wouldn't get so screwed by falling demand, but they are to busy trying to fuck each other over.
so if fewer companies make whale oil, that will make the whale oil industry more profitable and whale oil stocks are a safe investment, you just have to wait for some whale oil producers to go bankrupt?
Demand is falling, more efficient vehicles(commercial and consumer), shift to electric cars, less car buying, less mining and construction.
Why on Earth would anyone invest in oil, oil reserves are getting harder to extract. Fracking and arctic drilling are only profitable when the price reaches a certain point, but consumers and industry already learned their lesson from previous oil price spikes.
I put all my money on oil back in April when it started to go back up again, and appeared for a while to be recovering. And now there's talk of $20 oil.
My account is down 8% just today.
I'm just gonna hold and wait though, just hope my companies don't go under (operating in Colombia, still have a lot of cash).
Less than 40% of worldwide oil consumption is used for gasoline. Even if everyone stopped driving personal vehicles, demand for crude oil would only fall 25%-33%.
Now, if we all stop heating our houses, using items made from or packaged in plastic, flying in airplanes, roofing our houses, using electricity, and using paved roads, then your whale oil analogy might be a good one.
>This is why SA is thinking about privatizing Aramco. If that happens opec is over.
This is interesting. If they do, they probably just privatize a small portion of the company, not the whole, so the SA will still control most of it. (It currently 100% of it).
>Don't forget Iraqi/Kurdistani/Libyan oil production is going to increase as those areas get their terrorist problem resolved and the Iran sanctions are coming down.
Iran and Lybia are both in OPEC and they both will surely be happy to decrease their production, once they have fucked over all of the other worlds production.
>bankruptcy doesn't imply end of oil production.
True, but those investors might just buy up the reserves and not start producing, when the Oil is solidly holding on the high price levels.
>shift to electric cars
This will require more efficient batteries and huge infrastructure, to make the use of Electric cars convenient. Those "fast" chargers use medium voltage, which will require huge investments from the electrical grids and the chargers will even then take like 15 minutes to charge the car fully. It will take a long of time, till you see more electric cars than petroleum
fuelled cars going around the streets, but it will happen eventually I think, but not before OPEC will rekk other producers.
> less car buying, less mining and construction
Temporary problems. China is still growing, India is growing, all the shit is growing and all the economic crashes that will happen, will only be temporary.
OK have some statistics instead.
Estimated worldwide car sales for 2015 - 72.4 million.
Estimated electric car sales for 2015 - 600,000.
So under 1% of sales is for electric.
And those stats don't even cover goods vehicles.
Tell me again how oil is obsolete.
>Temporary problems. China is still growing, India is growing, all the shit is growing and all the economic crashes that will happen, will only be temporary.
they will continue to grow, but not as fast as before. I will venture and say that minerals are down, because we have gotten better at recycling all the minerals we have extracted. We are reaching a point where recycling is cheaper than mining. As resources are extracted, they become harder to extract.
here are two articles
Their reasons to be cheerful are laughable, maybe it is just one bad writer. I can't find a reason why mining would be a good investment. Mining should have had a goof year with fuel prices dropping, but the drop in minerals ate their lunch.
Third world growth will continue but at a slower pace.
About electric cars, it is not only more electric cars that is cutting into oil, but less ownership of gas cars. We have reached peak gas car buying.
>Now, if we all stop heating our houses, using items made from or packaged in plastic, flying in airplanes, roofing our houses, using electricity, and using paved roads, then your whale oil analogy might be a good one
Lots of those things don't require oil. I think you might be mixing up oil and fossil fuels.
I might have been a little dramatic with the whale oil analogy. The point is that there will be no rebound. My audacious prediction is that we will never see oil above $40 USD in 2015 dollars for the next hundred years.
We have a ton of oil and decreasing demand.
That's already what happens in Europe. Europe is quite a larg part of the world economy, and from what I gather the trend might soon reach America too.
On the other hand there's always the increasing middle class in India and China that might offset it.
too much supply, low demand. Electric cars are only a part of it. more efficient cars also act a demand reducer, the shift to smaller cars, people owning less cars, an economy driven more by tech, which doesn't rely on oil as much as the industrial and construction sectors that dominated the old economy.
The real reason why SA is maintaining mkt share is that if they would have cut production to allow prices to level, US investment managers would have plowed their overvalued dollars into shale developments into places like Argentina and China. Then S.A.would really be dicked.
>less ownership of gas cars
> We are reaching a point where recycling is cheaper than mining.
Very interesting, can you provide proof of it? I thought metals are down, because of the miners getting a boner over the Third world industrial growth so they started over producing.
>I think you might be mixing up oil and fossil fuels.
They all come from the same place. Natural gas literally comes from the same well head. It used to be a byproduct of crude production and burned off at the well, now it fetches as much $ per BTU as the crude itself.
Oil and gas are typically found in the same fields as coal deposits. They're just deeper. Most coal mines from the 1800s became productive oil fields in the 1900s, and are now productive fracking fields.
tl;dr there's no confusion...producing one produces them all
Worldwide demand for oil is growing year on year. Look at actual statistics instead of making predictions based on 4chan groupthink.
Once the market reaches equilibrium then supply will fall and prices will rise. This will happen. Unless you believe businesses can continue producing at a loss, further exploration is viable at $30, Saudi Arabia will supply 100% of global oil demand etc.
Commodities move in cycles and the cure for low prices is low prices. Current prices are unsustainable. Prices will rise.
Slowly build a position now in oil majors while the sector is depressed and recovery isn't priced in. Avoid smaller companies, explorers, frackers, support services.
If your investing timescale is under 5 years or if you can't handle seeing your account go into the red then you shouldn't be dealing in equities. Stick to cash and govt bonds.
The Netherlands is going full jihad on Russia.
>Millennials don't buy as much cars, don't drive as much and are inclined to purchase small cars
Doesn't matter, they still eat food grown with oil, shipped to the grocery store with oil, and buy shit off amazon and shipped across the ocean with oil
China and India don't give a flying fuck and they all want cars too so who cares about western millennials
The world would feel like a prison if you didnt have a vehicle. You would be stuck wherever you are. Fuck that its never going to be something people want. People in extremely urban environments do it because they dont have other choices.
Not correct. They want your money, but then again they don't want somebody like you driving the car just yet.
It's like the South Park episode where Cartman buys the amusement park and tells visitors to fuck off, and the park popularity suddenly booms because the demand is artificially not met by supply and people tend to be interested in things they can't really get. Just like your car at the very moment.
Saudi Arabia is in it for the long haul. Its honestly all they got. They can pump for pennies for the next 100 years and still have oil left.
What we laugh at today will be a very different story in 80 years when Saudi prince's grin and admit victory
Is there any reason or correlation between gold skyrocketing on the 7th when the sse plummeted, and the falling oil markets? It seems weird that gold started to plummet too right after the 7th?
They are sitting on the one major economic resource that has actual, intrinsic value. Poor Al Waleed wont be able to stud his Mercedes in diamonds now... what will he do?
Im not saying people arent going to get pissed, or a small revolution wont be put down suddenly and violently with US backing.
Im saying that Saudi Arabia is sitting on more oil than the bottom 100 countries have combined. They have all the time and oil in the world... not true for the triple leveraged oil companies in the US, UK, Russia, and China. US shale oil becomes unprofitable below 40 a barrel. Traditional oil becomes unprofitable below 15 dollars a barrel.
Saudi Arabia can subsidize oil production for the next 40 years with zero money coming in before they even come close to being budget neutral. Ill say that again. Saudi Arabia can bring in zero dollars for the next 40 years, before they run out of money and start actually accumulating debt
>they can pump for pennies for the next 100 years
bankrupt in < 5 years at current oil prices without cutting most social programs and taxing their people (which they currently don't), at which point the people will want a say in government and they'll have the Saudi Spring and all hell will break loose.
TL;DR: SA is quite f'd if oil doesn't go back up in the next couple of years.
>what is a commodity cycle?
>this entire thread
Retards were saying that we were running out of oil, hence the high price, oil companies are fugged. Now it's the fucking opposite. Seriously, everyone thinks whatever is happening right now will be that way forever. Wrong. Oil will go back up, then down again, then up again, until we're all fucking dead.
If the price is low enough, shitty third world nations will use it and industrialize. When the price is too high, the bubble will burst again. This is our 2008/2009 bubble only in 2016. No retard predicted it here and none of you will predict the next one either. It's probably truck with all the fucking "now hiring" signs.
>until we're all fucking dead