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Thread: December 31, 2018 WTI Crude Oil Price Predictions

  1. #1
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    Default December 31, 2018 WTI Crude Oil Price Predictions

    Happy New Year to all. Congratulations to 2017 winner Sonic Death Monkey whose $60 prediction was only 42 cents below the WTI closing price last Friday.

    Starting a new thread for 2018. Rules are the same as last year. Guess the price of a barrel of West Texas Intermediate crude oil quoted in US dollars at the end of the last trading day of 2018 which is Monday, December 31.

    To be counted, a specific price is needed, not a price range, and be posted on this thread before March 31.

    To ensure a level playing field, posters who guess early on can revise their guess (if they want) until the end of March.

    My guess for the end of December 2018 closing price is $65.50 US per barrel.

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    $70
    “You have to dream big. If we want to be a little city, we dream small. If we want to be a big city, we dream big, and this is a big idea.” - Mayor Stephen Mandel, 02/22/2012

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    Probably insane but sticking with $65.

    ---
    "The definition of insanity is doing the same thing over and over and expecting different results."

    "For every complex problem there is an answer that is clear, simple, and wrong"

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    ok already... i was probably overly optimistic the last few years but it's a reflection of what i do as you can't do it without being optimistic.

    having said that, i'll scale my expectations back 10% and forecast a still optimistic $70.65 for this year's poll.
    "If you did not want much, there was plenty." Harper Lee

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    I read an article the other day that said oil prices are going to 'surge' this year. 'Surge' was the word they used. Who's gonna start another 2018 poll.
    Gone............................and very quickly forgotten may I add.

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    Quote Originally Posted by Gemini View Post
    I read an article the other day that said oil prices are going to 'surge' this year. 'Surge' was the word they used. Who's gonna start another 2018 poll.
    i'm pretty sure this thread is it...
    "If you did not want much, there was plenty." Harper Lee

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    ^Ha ha, had to look twice, thanks Ken.
    Gone............................and very quickly forgotten may I add.

  8. #8

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    Not to good myself at predictions except to say it's gonna get dark tonight. As for oil prices I'll take a guess for the end of this year, $87 a barrel.
    Gone............................and very quickly forgotten may I add.

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    My guess on oil prices, $66 per barrel.
    "Talk minus action equals zero." - Joe Keithley, D. O. A.

  10. #10

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    I’ll guess $38.

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    $54.40 - that has a good sound to it.
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    ^They said it was gonna surge upward in 2018 not downward. Your gonna have to change your prediction.
    Gone............................and very quickly forgotten may I add.

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    Er, nope, Gem. I took a WAG last time around and ended up in the ballpark. Same logic applies this time, too. It's just a game after all.
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    I just hope WCS hits $50

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    I am going to go out on a limb. $85:00
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    The price has reached my goal ($66.00 US) already.
    "Talk minus action equals zero." - Joe Keithley, D. O. A.

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    During the 2014/15 economic drop, i stated that if oil was between 55 - 65 that would be a reasonable standard for recovery. This is good. The US and China's delima could rise this considerably in the short future.
    " The strength of a man is in the stride he walks."

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    Quote Originally Posted by ctzn-Ed View Post
    During the 2014/15 economic drop, i stated that if oil was between 55 - 65 that would be a reasonable standard for recovery. This is good. The US and China's delima could rise this considerably in the short future.
    The elephant in the room for Alberta though is the lack of capital investment now vs a decade ago. Prices and royalties were only half the story - if that. Massive plant build expenditures injected huge amounts into the economy in a way that had great multiplier effects. The cash flows for operational profits and royalty payments to government tend towards just sustaining activities. Nothing dynamic or synergistic occurs there. It’s the difference between entrepreneurial spending and retired workforce spending. The difference between the dynamism of silicon valley and the sleepiness of Florida snowbird havens.

    Moreover, capital investment was downright huge. Thank shake drilling for killing that goose laying a golden egg for ‘growing’ Alberta. Along with all the negative downsides like pipeline capacity shortfalls and depressed bitumen pricing that it brought with it.
    Last edited by KC; 04-05-2018 at 06:02 PM.

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    ^Much of the new capital investment in Alberta right now is being directed to our own shale oil reserves not to the oil sands.

    Canada, by contrast, offers many of the same advantages that allowed oil firms to launch the shale revolution in the United States: numerous private energy firms with appetite for risk; deep capital markets; infrastructure to transport oil; low population in regions that contain shale reserves; and plentiful water to pump into shale wells.

    Together, the Duvernay and Montney formations in Canada hold marketable resources estimated at 500 trillion cubic feet of natural gas, 20 billion barrels of natural gas liquids and 4.5 billion barrels of oil, according to the National Energy Board, a Canadian regulator.

    “The Montney is thought to have about half the recoverable resources of the whole oil sands region, so it’s formidable,” Marty Proctor, chief executive of Calgary-based Seven Generations Energy, told Reuters in an interview.
    https://ca.reuters.com/article/topNe...BN1FI0G7-OCATP

  22. #22

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    Does anyone have good information available on the amounts of capital investment over the years going into either or both areas?

    According to this (see below) 2016 was around $11 billion which is more like the levels seen around 2000-2002. The bubble year’s doubled or near tripled that level of annual investment. Those years triggered a big expansion of all kinds of things like real estate as well as infrastructure which now has to been sustained and maintained. Plus we’re still playing catch up on schools etc to serve the increased needs partially triggered by changes created by the bubble years.





    There is historical data here going back further than shown in graph above

    Workbook: ~Capital Expenditure Figure 1.10 Alberta conventional oil and gas and oil sands capital expenditure

    https://www2.aer.ca/t/Production/vie...showVizHome=no
    Last edited by KC; 04-05-2018 at 08:12 PM.

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    What I do know for a fact is that once the Shell LNG goes in Kitimat....25 BILLION worth of plants have to be built in the Montney - where I've been forever. Those plants are needed to feed that LNG - so good news for Albertans, because not enough BC workers want to work anymore...lol. The last projects I was on here - only 1/3 of the workers came from BC - the area between Dawson and John.....

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    Nevermind the capital cost of 40 BILLION plus to build the LNG plant and associated pipelines - than how many 10,000's of holes will need to be drillled and fracked as well......

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    It is not the case of BC folks not wanting to work, but the type of jobs provided by such projects require specialty trained workers; and most of these trained workers come from Alberta. That said, workers right across the country will bennifit.
    Last edited by ctzn-Ed; 05-05-2018 at 08:29 PM.
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    A useful article identifying some of the factors currently driving higher oil prices:

    Plunging Venezuelan crude production; sanctions disrupting Iranian oil exports; Saudi Arabia pushing for even higher prices; North Korea peace talks -- the coming weeks bring an abundance of risks for the oil market.

    The geopolitical premium has already helped lift crude prices to a three-year high. There are several dates coming up which could have a significant impact on global oil supply and demand, or at the very least elevate the risk of a market-moving presidential tweet.
    https://www.bloomberg.com/news/artic...ks-proliferate

  28. #28

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    What’s changed with Iranian oil?

  29. #29

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    Nothing has yet changed with Iranian oil and it seems that the impact of reinstating sanctions would be minimal supply reductions. Other risks though come into play though as the Iranians will likely respond to the US reneging on the deal.


    Here’s what sanctions on Iran could do to global oil supply and prices - MarketWatch

    https://www.marketwatch.com/story/he...ces-2018-05-04


    I’d guess that the high prices will be met with US drillers ramping up quickly.

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    Back below 70.00.

  31. #31

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    Wonder how this will go:
    'Biggest' change in oil market history: Crude prices set to soar ahead of shipping revolution

    https://www.cnbc.com/2018/05/24/oil-...evolution.html
    I am in no way entitled to your opinion...

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    Quote Originally Posted by Spudly View Post
    Wonder how this will go:
    'Biggest' change in oil market history: Crude prices set to soar ahead of shipping revolution

    https://www.cnbc.com/2018/05/24/oil-...evolution.html
    Beyond the US benefitting, it seems too hard to predict the impact on overall pricing.

    An Oil Refining Capacity Wave Is Coming - Bloomberg
    Mar. 6, 2018
    Excerpt:
    “U.S. refiners, meanwhile, are sitting relatively pretty, especially on the Gulf Coast. They have access to both surging light-tight oil production, which will be in demand as low-sulfur requirements tighten in shipping at the end of the decade, as well as captive (and cheaper) Canadian heavy barrels. They also enjoy low energy costs courtesy of shale gas.
    Looks like the Americans are a force to be reckoned with on that front too.”

    https://www.bloomberg.com/news/artic...wave-is-coming

  33. #33

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    A long read. Gets interesting in places.

    What are the implications of an increase in Saudi crude oil production capacity?

    Opinion: Saudi Arabia finds itself in an energy demand quandary
    By Jim Krane arabianbusiness
    Thu 28 Sep 2017

    “Low prices might also enhance oil dependence among emerging economies, leading states into path-dependent investment in oil-intensive transportation systems and settlement patterns that lock in long-term demand. ...”


    “This understanding ought to prompt some holders of large reserves to try to monetize those resources on an accelerated pace, lest they lose value or become stranded. Recent statements and actions within the Saudi oil sector suggest that these threats are being taken seriously...”


    http://www.arabianbusiness.com/inter...ction-capacity
    Last edited by KC; 25-05-2018 at 10:47 AM.

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    Back above 70.00 right now, according to the Globe and Mail.

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    WTI crude oil has hit $75 for the first time since 2014
    “You have to dream big. If we want to be a little city, we dream small. If we want to be a big city, we dream big, and this is a big idea.” - Mayor Stephen Mandel, 02/22/2012

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    Quote Originally Posted by KC View Post
    I’ll guess $38.
    lol come on man...

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    Quote Originally Posted by overoceans View Post
    Back above 70.00 right now, according to the Globe and Mail.
    Wonder how Trump's policy of demanding lower oil prices while simultaneously creating chaos with Iran is working out.

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    Answer: Not well
    They're going to park their car over there. You're going to park your car over here. Get it?

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    Quote Originally Posted by Gord Lacey View Post
    Answer: Not well
    If we're being honest, though, I'd imagine Joe Ceci is not entirely unhappy about it.

  40. #40

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    WCS still carries roughly a $27 discount compared to WTI.

    Cmon let's get those pipelines in...

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    Now down below 60.00 again.

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    Quote Originally Posted by overoceans View Post
    Now down below 60.00 again.
    No offense, but quit quoting WTI - it doesn't matter to Albertans - what matters is the WCS - which is sitting at $17 bucks now....that is the number we've got to be concerned about. So for example, Devon's 3 X Jackfish's combined are only bringing in $1,800,000.00/day. Compared to $13,000,000.00 4.5 years ago. How much longer do you think they'll keep at it? Or anyone for that matter. Compared to $43.00/barrel to Condensate - that's why the Fox Creek to G.Cache region is going like nuts. Cuz the pipelines need Condi to flow. Ie, the Keystone will need 500,000 barrels of Albertan Condi daily to keep it moving once it's running.

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    ^The WTI price still matters to Albertans. Among other things, Alberta royalty rates are calculated based on the WTI price, not WCS (thank goodness):

    Royalty rates fluctuate based on the price of oil, which is determined by the West Texas Intermediate (WTI) price benchmark for oil, converted into Canadian dollars.
    https://www.alberta.ca/royalty-oil-sands.aspx

    As alarming as the current collapse in the prices of all the Canadian crude blends is, most Alberta oil is not priced on these spot markets. If it was, gasoline prices would be around 50 cents per litre, not the $1.10 per litre they are today.

  44. #44

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    Heard about this on the radio. Haven’t actually read the details.

    “Alberta oilsands producers 'incredibly profitable' during recent economic downturn”

    In 2017, the top five companies banked or paid out to shareholders $13.5 billion, report states
    CBC News
    November 08, 2018

    https://www.cbc.ca/news/canada/edmon...nton-1.4896996

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    ^I suppose what is "incredibly profitable" is in the eyes of the beholder. My understanding of what this means is obviously different than that of the Parkland Institute. Seems like a good thing that Alberta's major oilsands producers have managed to remain profitable despite all of the headwinds they are currently facing (e.g. low prices, lack of market access).

    There is a level of financial transparency involving individual oil sands projects that is pretty much unprecedented anywhere in the world. Want to know the total revenue, net revenue, operating and capital costs, total royalties paid to Albertans and at what rate for both 2016 and 2017? All of this and more is available in downloadable spreadsheet format at this link:

    https://open.alberta.ca/opendata/alb...-data1#summary

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    Quote Originally Posted by maclac View Post
    Quote Originally Posted by overoceans View Post
    Now down below 60.00 again.
    No offense, but quit quoting WTI - it doesn't matter to Albertans - what matters is the WCS - which is sitting at $17 bucks now....that is the number we've got to be concerned about. So for example, Devon's 3 X Jackfish's combined are only bringing in $1,800,000.00/day. Compared to $13,000,000.00 4.5 years ago. How much longer do you think they'll keep at it? Or anyone for that matter. Compared to $43.00/barrel to Condensate - that's why the Fox Creek to G.Cache region is going like nuts. Cuz the pipelines need Condi to flow. Ie, the Keystone will need 500,000 barrels of Albertan Condi daily to keep it moving once it's running.
    To be fair Mac, the true cost operators get isn't always based of market price of oil. Alot of these operators have contracts with companies in the South that obligate them to meet certain volumes in turn for a set price.

    Alot of the big operators are probably getting 40 for a barrel. This however, doesn't make it any less alarming as to how underdeveloped our refining and pipeline infrastructure are.
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  47. #47

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    Well, according to himself, this is the guy you need to talk to if you want the price to go up.

    Trump on falling oil prices: 'That's because of me'

    President Donald Trump on Wednesday claimed credit for falling oil prices, glossing over market forces that knocked crude futures from four-year highs last month.


    Trump also appeared to hint that his administration may not tighten sanctions on Iran's oil exports if crude prices start rallying again, saying the measures will "maybe" get tougher.


    The president did not clearly elaborate on why he deserves credit for the pullback in oil markets, but he linked falling prices to his disdain for the 15-nation OPEC cartel and his administration's Iran policy.

    https://www.cnbc.com/2018/11/07/trum...use-of-me.html
    Let's hear no more talk of pipelines or access to markets now, OK? </Snark>

  48. #48

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    $100/bbl. - would sure spur more US production



    Legendary Oil Trader Expects Crude Prices To Rebound

    By Tsvetana Paraskova - Nov 25, 2018, 4:00 PM CST


    Just two months ago, fears of plunging Iranian supply had the oil market and analysts wondering how high prices could go and if we are about to see $100 oil again.

    Just a few weeks later, no one’s talking about $100 anymore, and oil analysts and traders are trying to guesstimate if oil prices will rebound from the current lows, after the sell-off in recent weeks wiped out this year’s gains.

    Many analysts see room for recovery, factoring in expectations that OPEC will announce a sizeable cut in early December to lift Brent Crude prices out of the low $60s into the $70s.

    One of the analysts expecting an OPEC-assisted rebound in prices is legendary oil trader Andy Hall, who was nicknamed ‘God’ for profitably predicting oil prices

    ..


    https://oilprice.com/Energy/Energy-G...o-Rebound.html



    Last edited by KC; 25-11-2018 at 07:42 PM.

  49. #49

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    Quote Originally Posted by Channing76 View Post
    Quote Originally Posted by KC View Post
    I’ll guess $38.
    lol come on man...
    I’m not holding my breath

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    Quote Originally Posted by KC View Post
    Quote Originally Posted by Channing76 View Post
    Quote Originally Posted by KC View Post
    I’ll guess $38.
    lol come on man...
    I’m not holding my breath
    If the current trend holds you'll be pretty close. How much did you pay Trump?

    "For every complex problem there is an answer that is clear, simple, and wrong"

  51. #51

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    Quote Originally Posted by Paul Turnbull View Post
    Quote Originally Posted by KC View Post
    Quote Originally Posted by Channing76 View Post
    Quote Originally Posted by KC View Post
    I’ll guess $38.
    lol come on man...
    I’m not holding my breath
    If the current trend holds you'll be pretty close. How much did you pay Trump?
    Just need faith in human nature being consistent.


    How Much Lower Can WTI Go?

    By Irina Slav - Nov 29, 2018

    “ growth in demand for the fuel on the domestic market has been slowing down, the EIA noted, while production has been growing: refiners can’t just store all that crude that’s coming from the shale patch and the Gulf of Mexico.”


    “West Texas Intermediate yesterday fell to US$50 a barrel, after the Energy Information Administration reported yet another weekly inventory build with production at record highs, making the United States the biggest oil producer globally. Under other demand circumstances, this would have been cause for celebration. But with demand prospects lukewarm, traders rushed to the exit once again, reinforcing the price decline.”


    “Basically, a lot of producers are just breaking even at US$50 per barrel of WTI based on this estimate, and they can’t stop pumping because they have debts to service.”

    https://oilprice.com/Energy/Oil-Pric...an-WTI-Go.html

    Last edited by KC; 29-11-2018 at 08:36 PM.

  52. #52

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    Oil Prices Set To Book Worst Month In A Decade

    By Tsvetana Paraskova - Nov 30, 2018, 11:00 AM CST

    “Oil prices dropped early on Friday, on course to finish their worst month since 2008, as fears of oversupply and slowing demand growth dragged oil down into a bear market in November with prices off by some 30 percent from four-year highs in early October.”

    https://oilprice.com/Energy/Crude-Oi...-A-Decade.html


    Shale Drillers May Cut Capex As Oil Falls To $50 | OilPrice.com
    Nov 30, 2018

    “Just as the U.S. shale patch is drafting spending budgets for 2019, oil prices have tumbled 25 percent from four-year highs in early October to just above $50 a barrel WTI Crude at the end of November.”
    ...
    “Just two months ago, $50 oil was not the base-case scenario at which U.S. companies planned, and few had expected such a steep price correction. Now exploration and production companies—who had just started to report rising cash flows and to finally reward shareholders with buybacks and increased dividends—find themselves in a position to choose from where to cut spending next year, considering that a prolonged period of $50 oil would eat into cash flows and undermine previous cash generation projections. “

    https://oilprice.com/Energy/Crude-Oi...lls-To-50.html
    Last edited by KC; 02-12-2018 at 03:07 PM.

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