"It's tough to imagine the world going back to $50 to $60 a barrel of oil," ConocoPhillips...


"It's tough to imagine the world going back to $50 to $60 a barrel of oil," ConocoPhillips (COP) CEO Ryan Lance says, and he'd better be right. Oil has consistently hovered above $100/bbl, and Lance is among oil chiefs betting prices can hold up even in the midst of the U.S. shale oil boom. It's too early to gauge the size of the impact, but "the demand is going to increase substantially."

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Comments (12)
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    Don't let me down Lance I'm making good money on COP and PSX.
    30 Aug 2012, 02:28 PM Reply Like
  • Uncle Pie
    , contributor
    Comments (4322) | Send Message
     
    Shale oil wells are about 75% depleted after 2 years of production. If oil drops to $50 or $60, the shale companies will curtail drilling,
    deep water drilling projects and new oil sands mines will be put on hold (as they were during the Great Panic of 2008), and supply will wait till demand rises again.
    Meanwhile the Israelis are hot to bomb Iran before the US Presidential election. Check out the article in the current New Yorker magazine.
    30 Aug 2012, 02:33 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (9704) | Send Message
     
    Hate when CEOs say this stuff. Similar to the coal Super Cycle at BTU. Agree with Uncle Pie though, the new oil projects such as shale and deepwater are either depleted fast or require high oil prices to stay in production. Don't see how oil ever remains at $50 unless electric vehicles take off or some new technology that reduces demand.
    30 Aug 2012, 02:38 PM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    Mass production of Electric or NG vehicles is the only way I see Oil staying depressed for any length of time.
    30 Aug 2012, 02:39 PM Reply Like
  • kmi
    , contributor
    Comments (4587) | Send Message
     
    The reality is that in many of the countries folks are betting big will increase their oil consumption, substitution and energy diversification is taking place.

     

    Places like India and its neighbors with their terrible grid are already encouraging folks to switch to solar for more dependable power (and with the prices dropping have encouraged this more).

     

    China's consumption growth in oil has been decresing although its overall consumption is sill growing but China is pushing for alternatives harder than we are in the US, and its tremendous inefficiency in energy/GDP means that this hard patch will probably encourage efficiency improvements which will likely translate into lower energy/GDP.

     

    I also think that a lot of the permanent long spec positions sitting in oil (and commodities in general) will slowly migrate out as it becomes clear that oil price increases are not long term guaranteed, and as dollar dilution is increasingly taken off the table.

     

    I just don't see this level as long term sustainable I guess.
    30 Aug 2012, 02:46 PM Reply Like
  • ElCabong
    , contributor
    Comments (32) | Send Message
     
    This could happen. The US isn't the only country with large shale deposits and it does not have the largest. It does have the best infrastructure to support development of tight shale oil.

     

    It remains to be seen how this technology gets used by other countries.
    30 Aug 2012, 02:44 PM Reply Like
  • smurf
    , contributor
    Comments (6176) | Send Message
     
    All that is needed is another '08-'09 type crash and $50 will be high.

     

    Don't say it can't happen. Just look at all the funky investments floating around again, all highly leveraged and intensely speculative.

     

    Or, is it "different this time?" If so, let me know how.
    30 Aug 2012, 03:04 PM Reply Like
  • chopchop0
    , contributor
    Comments (5162) | Send Message
     
    It went to $40 in early 2009, but didn't stay there for long.
    30 Aug 2012, 03:28 PM Reply Like
  • kmi
    , contributor
    Comments (4587) | Send Message
     
    In '08-09 it was indeed different in a few ways. There was a lot of spot market buying with many large consumers not hedged which contributed to continually pushing the price up.

     

    Also many commercials use dual-fuel systems now to enable switching to the cheaper product easier.

     

    I'm realizing as I write this that making the 'why its would be different this time' list would take a long time and I don't want to make a thirty paragraph comment, but, yeah, I'd say it would be different.
    30 Aug 2012, 07:49 PM Reply Like
  • xomstock
    , contributor
    Comments (448) | Send Message
     
    In 1983 I got out of college. University of Houston. I had been working for years as an electrician on weekends, night call outs, and summers.

     

    I did mainly oilfield pole line and industrial work. Our company was doing about 55% of our work in the oilfield. The price of oil was 35 dollars a barrel. It was common to hear at the time it will never go below 35 again. One to two years went by and the price of oil was at 8 -12 dollars and our oilfield work was down to 2% of our total work.

     

    I am still an oilfield electrician.

     

    There was a bumper sticker at the time that said something like this: God give me one more oil boom I promise I will not waste it .

     

    I feel we need the price of oil to stay above 60 to achieve energy independence but I know that the price will come down. This is the way of the oilfield, cattle, copper and most all commodities.
    I also feel we need oil to stay below 90 for our economy to thrive.
    If our dollar ever starts being worth what it should be oil prices will have to fall.

     

    How we keep it between the lines is what I do not know. But it will come down . This is the way of the oil patch
    30 Aug 2012, 04:14 PM Reply Like
  • Rescue28
    , contributor
    Comments (3) | Send Message
     
    Last time I looked, oil cost the same to get out of the ground as it did yesterday relatively speaking. With technology it should "technically" be more cheap...
    30 Aug 2012, 05:18 PM Reply Like
  • Veritas1010
    , contributor
    Comments (3200) | Send Message
     
    I guess to me the question is intuitively obvious; are you a long term investor or short term player?

     

    I've always been a long term player, rarely short (unless I see the proverbial hurricane coming on), and try to invest in solid dividend/slow growth equities that pay and then consistently pay some more each year. This is my "inner core" of my concentric rings of investment security.

     

    Guess what, it works - quite nicely I might add.

     

    Sleep well, and go long on the likes of XOM and COP irregardless of short term gyrations that are more mathematical blips designed to surely give one ulcers or delusions of trends and wealth.
    30 Aug 2012, 09:45 PM Reply Like
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