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Oil price collapsing and stock market in free fall.

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Oil price collapsing and stock market in free fall.

Old 24th Aug 2015, 13:01
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short flights long nights
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Oil price collapsing and stock market in free fall.

These things my not factor well in Dubai. There is talk in Australia tonight that things here could get worse than the GFC as China goes into free fall.
Petrol is selling tonight as low as $ 1.09 a litre. There are thoughts it will drop below a dollar a litre.

Great news for consumers, but not for petroleum exporting countries, especially ones that need large revenues to keep their local populations happy and in the manner they are accustomed to.

The next few moths may be interesting.
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Old 24th Aug 2015, 13:56
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Originally Posted by SOPS View Post
These things my not factor well in Dubai. There is talk in Australia tonight that things here could get worse than the GFC as China goes into free fall.
Petrol is selling tonight as low as $ 1.09 a litre. There are thoughts it will drop below a dollar a litre.

Great news for consumers, but not for petroleum exporting countries, especially ones that need large revenues to keep their local populations happy and in the manner they are accustomed to.

The next few moths may be interesting.
OPEC countries will cut oil production and get the oil barrel price up to 100 usd if they need cash.
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Old 24th Aug 2015, 14:06
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They may not have that much control anymore. America and Australia are fracking.
Western Australia is just about to open a natural gas field that rivals Qatar's reserves.
We will see.

Last edited by SOPS; 24th Aug 2015 at 14:18.
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Old 24th Aug 2015, 14:10
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@7Q Off
Don't think so, a rezession means also less demand. Another point is that countries like Iran, Saudi, Venezuela etc. need every single buck. Russia (non OPEC) depends on the Oil/Gas revenue and they have hugh bills to pay.

There is def. reason to worry for the Maktoum Inc.
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Old 24th Aug 2015, 14:13
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Wink

Crises...what crises?

There is nothing to see here....move along.

If you don't like what you hear in the news then simply change the channel...simple really!

There are no worries when you live in paradise..

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Old 24th Aug 2015, 14:24
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7Q Off,

OPEC countries will cut oil production and get the oil barrel price up to 100 usd if they need cash.
I think you may need to do some broader reading. Start here -

Everything Has Changed: Oil, Saudi Arabia, And The End Of OPEC - NASDAQ.com
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Old 24th Aug 2015, 14:27
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Outlaw Yepp, and when leaving the car wil stay at the DXB Airport
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Old 24th Aug 2015, 14:49
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And I can remember talking heads on the finacial channels predicting 300 dollar a barrell oil.
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Old 24th Aug 2015, 14:56
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Provident

I moved my entire provident fund to cash end of last month

It is still worth the same today as it was 2 weeks ago, best decision I have made in a while
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Old 24th Aug 2015, 15:02
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For Dubai this will be far worse than 2008....the number of abandoned cars at the moment gives a taste of what is to come.
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Old 24th Aug 2015, 15:27
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@emratty Yepp, the big question will be are the rulers of AD willing to step in a 2nd. time and what will be the prize for Dubai.
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Old 24th Aug 2015, 15:37
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You have to ask, at $ 40 a barrel, will AD be willing to step in? I mean, they have to support the local Ferrari driving club. If they don't, they could end up in a mass protest on the streets.

So will they be willing to give the neighbours more money, let's wait and see.
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Old 24th Aug 2015, 17:09
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Have a look back on the 27th July at this POST. I do hope vfenext went safe in the market!!


Re Oil, the race to the bottom and $20 is on. The ME countries don't want to be bullied by the 'fracking' nations and continue to pump oil and have control of the cost on their own desk, they are too keen to be the ones in control. The fracking nations are keen to pump their own oil, drop the global price and buy that oil at a cheap price and store it.

The ME knows that oil is slowly being taken over by other sources of energy and I believe that at some stage the demand for oil will "dry up" (pun intended) and the sale at any price will happen to profit from the oil reserves.

Interest rates are at ZERO, there is no other way to prop up the failing global economy other than try to promote cheap oil. This makes goods and their transportation cheap and drives the economy onwards. As the markets fail then people will slow down on their own spending and the economy will fail more.

No more interest rate drops possible (rate hike talks just hot air as being seen to be in control), oil was $150 and is heading to $20, there is almost no further leverage in the defunct system to try to keep the failed capitalist experiment alive. The only reason that the last 7 years have seen the markets raise through the roof is to make the masses believe that the world is all fine fine fine. QE 1.2.3>infinity in the western world has been in full swing for years. The experiment is almost over I believe and the only safe way going forward is hard assets and do not trust banks with anything.

Truth behind 7 year bear market timing

Jack
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Old 24th Aug 2015, 17:18
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If you drill for 30 and sell for 40 you are still making a profit.
If you frack for 60 and sell for 40 you are bleeding.
Wonder who will win.
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Old 24th Aug 2015, 17:23
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As long as your profit covers your bills, no problem at all. That isn't the case in Saudi, Russia, Iran etc. And when it comes to Maktoum Inc. they are in "dry land",. so let's see if AD is willing to cover their bills.
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Old 24th Aug 2015, 17:37
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OK so lets get this put straight....

Frackers Frack to use their own oil and drive oil prices down globally by letting the oil producers build up a glut of oil...

Frackers buy the cheaper (OPEC) global oil and store it.....(OPEC is storing and pumping oil so trying to price oil down to stop the fracking but is not working. Fracking countries want OPEC to continue to reduce oil prices so OPEC can sell their oil ocean. OPEC wants to remain in control of the price and refuses to stop pumping in an attempt to price the frackers out of business).

Fracking causes cheaper oil and lowers global commodity costs due to cheaper production and transportation.

Fracking is NOT just about using that expensively extracted oil, its all about driving the global oil price cheaper and boosting the global economy.

Fracking creates extra jobs in those countries where that oil is available.


Jack
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Old 25th Aug 2015, 01:11
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Oil has just dropped below $38 a barrell this morning.
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Old 25th Aug 2015, 04:38
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Oil prices are dropping as demand is slowing, it's all coming out of China. China, the worlds second largest economy is slowing down rapidly and as the saying goes, "when China sneezes, the rest of the world catches a cold". Time to have a closer look at China.....

""The Great Fall of China"". A debt fuelled economy since the global financial crash has led to rising property prices and general trends as seen in the west leading up to the GFC. Basically China has repeated the same failed experiment that caused the GFC and markets are correcting.

China has previously devalued yuan in an attempt to prop up their economy as it has transitioned more from a production based economy to a consumer economy. The problem with Chinas direction going away from a production based economy is that many mines and raw materials that it has in the past had need of are now slowing down in production. The wider problem with that is the mines etc are owned by many western investment funds and groups which will be affected. As China is slowing down it is also buying fewer western higher prices goods which further affects the western economies.

The direction of the China economy is going to get worse as the investment to GDP is slowing and the growth will drop to around 3% from 13% some analysts say. This is a deleveraging cycle that may take 2 to 3 years to play out. The China government has tried both fiscal and monetary policy and as they have both barely worked then the options are becoming more limited. To help keep the manufacturing part of the China machine (economy) turning, while western governments have been adopting QE, the Yuan has been appreciating. The only way for China to boost the economy has been to devalue its currency and make its exports cheaper so the west will pour more money into China and purchase these cheaper goods.

The global policy makers have no room to manoeuvre and the best thing they can do now is nothing. Interference of governments and central banks has caused this mess. QE in Japan, US, Europe and now China is a failed practice, it was a short term fix for a long term problem, primarily running economic growth by issuing debt which now (or soon) has to be repaid.

The Chinese government have told the media that they are not allowed to use terms such as "sharp fall or collapse" for fear of spooking traders/investors. The population has used social media to self study the latest market trends and this has shown a lack of trust in the governments ability to control the economy.

Contagion across the globe from China will prevent the much called for interest rates rises in the west.

There is now new fear in the stock markets but the ethos of a trader is to trade. The uncertainty will continue but there will be a rebound when the prices are seen to be at bargain values and people will jump back into the market. Reality will soon come back to the global market and another sell off will happen and that might be much much worse.

Jack
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Old 25th Aug 2015, 06:42
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Fracking at 60 and selling at 40= 20 loss
Importing at 100. = 100 loss.
Plus extra jobs and non reliance on Middle East and Russia. US will continue fracking.
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Old 25th Aug 2015, 15:32
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If you drill for $30 and sell for $40 you are making a profit however if you have based your budget on selling for $80 then you have a problem. The masses need to be bought off with government jobs, free health care and education.Otherwise they will become restless and overthrow your government.

Every producer wants to pump more and sell it at a higher price but if they pump more the price drops, so they need to pump even more to make up for the lower price.

If the price gets too high then fracking becomes economic so you can't cut production too much to drive up the price as this will also cut your income.

You can sell a lot of oil cheap or a smaller amount for a higher price but your income will stay the same because fracking will place a cap on it.

Anyone remember "Peak Oil" and $200 a barrel price projections ? The elite who control the markets made fortunes from that price manipulation.
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