I am not in here but hold a lot in PMO..... Luck to us both...medium to long term am v confident
Yep, the oil price wll recover, as in the long term prices in its current state are in no ones interest. Opec, US energy companies, Rusia etc all want higher prices, trying to find a common concensus is the challenging bit. Oil is oversupplied by 2m barrels at the moment, this represents 3% of total production, so a smalll cut will rectify this, also the demand from americans is higher than in the last 4 years, also people are forgetting that the chinese middle class is growing and so is India's. Goldman and these other institutions are clowns, they are there to make money for themselves, they famously said oil was going to be over $200 which now could be a possibility in the future when new projects are delayed or shelved at current prices and the supply to demand ratio swings the other way. What is interesting that Tullow again is being touted as a takeover target, which should come to no surprise, when or who that would be, I would like to know. I can not call it, people have said one of the Big american companies, but how about BP or Statoil?
And you can bet that Goldman's are currently accumulating vast amounts of oil shares at these reduced rates prior to a future prediction from them no doubt titled "the world is running out of oil"!!! It's just a game and this is just cyclical commodities doing their thing.
True for most of the businesses, some will survive and do very well. they have enormous amounts of debts and have not provided any shareholder reward in terms of divis or share buy backs. The debt levels have increased since last year and a few have already started to feel it, will be interesting what happens when the come calling. The efficiencies are still not there and a lot are in trouble as the debt repayments and interest is mounting up. With oil this low, they can not service them alongside maintaining Operating expenditure or further drilling as Shale can switch on and off quicker than conventional oil, the barrels coming out of the ground after a year drops significantly. So called experts are already stating that they have have already found ways of reducing the drop in levels, but that sounds more like fiction than the truth. Goldmans came out with the classic that oil will be $50 at 2020, oh yeah when new production is being cancelled or delayed and with demand increasing still, that is far from the truth. They never guessed the fall of oil correctly, so I wont agree with them on that one.
In "The Times" newspaper today they reported that Goldman Sachs is advising clients that Tullow is likely to be bought out. The CEO of Tullow is playing it down, but did not rule it out. The article says Tullows production for a barrel of oil with all costs factored in is around 38$. The average shale gas in America is 62$. Shell ruled themselves out of any buy out of Tullow, but the large American players are interested with Chevron Texaco the likely one.
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