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Senior Contributor

US Crude Oil Heading South, Again?

I found this article to be very interesting, and it seems logical.


Lower fuel prices during planting season would be a much needed positive for farmers, as grain prices are lower than most had hoped.


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Veteran Advisor

Re: Good Post, Supreme Farms. guess

folks could always throttle some pumps back ( or worst case, shut some wells in ).


the best place to store crude happens to be "in the ground"  when everything is full ( and cheap too).


I think gas will be going down again, like Now: 

it's stairstepping a downward trend.

( each high is lower than the last high, and each low is lower than the last low )



Maybe some $1 to $1.50 gas for the summer season?  we'll see.



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Re: US Crude Oil Heading South, Again?

MW--pigs will fly before gas gets that cheap. Gas around here seems to go down painfully slow, but will raise on a whim. Oil would have to go down and stay down for a long time as "we have all this high priced gas in our tanks we have got to get our money out of."
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Re: Good Post, Supreme Farms. guess

Maybe $1-1.50 RBOB futures, not retail.


US production continues to rise primarily because a lot of it has been financed at high leverage with high yield junk bonds. They have to pump what they have- and even move faster on sweet spots than they might otherwise, just to keep from defaulting.


Since the average frack well peaks in the first few days and declines precipitously by the end of the first year or so, the sharp drop in rig count should produce a fall in production within a year or so.


But in a year there's going to be some $T or so of junk bonds that have gone off to the place where money goes to die.


For the folks that have enough cash flow there are a substantial number of wells that have been drilled and shut in. But with that fixed cost sunk, that's just more overhang on the future on top of the couple billion barrels tht might be in storage globally come summer.





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