Oil prices near $100 a barrel and stocks sink as Ukraine crisis deepens

[mystery-ak]

Oil prices near $100 a barrel and stocks sink as Ukraine crisis deepens

Updated on: February 22, 2022 / 2:19 PM / CBS/AP

Oil prices surged nearly 5% and stock prices dropped Tuesday after Russian President Vladimir Putin recognized the independence of rebel-held regions of Ukraine, raising fears that a full-scale invasion was near.

Russia is a major energy producer and the tensions over Ukraine have brought wide swings in volatile energy prices — on top of the inevitable risks of a broader conflict which would pull down economic activity across Europe and globally.

Oil prices had already risen to their highest level since 2014. By early Tuesday, the advance of U.S. benchmark crude oil had abated slightly. It was up about $3, or 3.5%, to about $94 per barrel in electronic trading on the New York Mercantile Exchange. The price of Brent crude, the standard for international oils, gained about $4.50, or nearly 5%, to hit about $98 per barrel.

more
https://www.cbsnews.com/news/oil-prices-ukraine-crisis-stock-market/

[catfish1957]

Markets after today are pretty much in correction territory.  Of course this is being downplayed for Biden's protection by the financial channels.

[DB]

And as oil prices rise due to this "crisis" Russia is raking in the petro dollars by the billions...

[GtHawk]

And as oil prices rise due to this "crisis" Russia is raking in the petro dollars by the billions...

I wonder if Putin is giving the big guy his 10%, considering all he has done to push the price of oil up and fill Russia's coffers.

[catfish1957]

From my experience, I am not thinking oil reaches $150/bbl, as some punditry is predicting.

When you get to those stratsopheric levels, demand will start dropping, as at or near that point, unnessary travel will end, Car pooling will go up 10X, and at worst you may see tele-work at home like what happened during the height of the pandemic.

[Hoodat]

And as oil prices rise due to this "crisis" Russia is raking in the petro dollars by the billions...

Consider it a win-win from Putin's standpoint.

[GtHawk]

Consider it a win-win from Putin's standpoint.

It's a win win for states too as sales tax revenue explodes. That's why I never believe politicians when they talk about investigating oil companies, they want the prices high so they can continue to rake in taxes.

[libertybele]

From my experience, I am not thinking oil reaches $150/bbl, as some punditry is predicting.

When you get to those stratsopheric levels, demand will start dropping, as at or near that point, unnessary travel will end, Car pooling will go up 10X, and at worst you may see tele-work at home like what happened during the height of the pandemic.

It will be a reason for a greater push for electric vehicles. 

[Hoodat]

From my experience, I am not thinking oil reaches $150/bbl, as some punditry is predicting.

When you get to those stratsopheric levels, demand will start dropping, as at or near that point

Even more relevant is that supply will increase substantially at that price.  There is a hefty difference between supply at $60/bbl and supply at $150/bbl.  Lots of shale oil will come online at that high a price.

[libertybele]

Even more relevant is that supply will increase substantially at that price.  There is a hefty difference between supply at $60/bbl and supply at $150/bbl.  Lots of shale oil will come online at that high a price.

I thought that shale had already been tapped into and was part of our (once) energy independence?

[Hoodat]

I thought that shale had already been tapped into and was part of our (once) energy independence?

Typically, shale becomes viable when the price reaches $70 or so.  But extraction costs vary substantially.  One site may able to make a profit at $60/bbl while another may not be profitable until it reaches $110/bbl.  Supply comes down to economies of scale which creates a high degree of volatility due to such a wide range of production costs throughout the world.  Set the price of oil at $5/bbl, and you will see wells shutting down all over the US.

[IsailedawayfromFR]

Typically, shale becomes viable when the price reaches $70 or so.  But extraction costs vary substantially.  One site may able to make a profit at $60/bbl while another may not be profitable until it reaches $110/bbl.  Supply comes down to economies of scale which creates a high degree of volatility due to such a wide range of production costs throughout the world.  Set the price of oil at $5/bbl, and you will see wells shutting down all over the US.

There are over 4,400 wells that have already been drilled awaiting completion, some liquids, some gas.

In the oil industry, this is known as the low-hanging fruit and are the very first production to access at these high prices.


https://www.eia.gov/petroleum/drilling/

[Smokin Joe]

There are over 4,400 wells that have already been drilled awaiting completion, some liquids, some gas.

In the oil industry, this is known as the low-hanging fruit and are the very first production to access at these high prices.


https://www.eia.gov/petroleum/drilling/

Transport infrastructure remains the bugaboo, because the current regime is doing all they can to thwart the development of pipelines.

[IsailedawayfromFR]

Transport infrastructure remains the bugaboo, because the current regime is doing all they can to thwart the development of pipelines.

I'd say there are several thousand truckers north of us that might be happy to help that out.

[Smokin Joe]

I'd say there are several thousand truckers north of us that might be happy to help that out.

It isn't that they would not be willing to do so, and may have or be willing to get the required Hazmat and Tanker certifications, but of all the methods of moving large amounts of crude safely and cheaply, pipelines come in first, Rail is about $5/bbl more, and trucking is even more expensive.

The further you get away from oil pipelines, the more expensive fuel will be.

The risk, even with good infrastructure, also goes up from the pipeline to rail to trucks, and the latter two have the unfortunate burden of sharing roadways: at crossings in the former case, and all along in the latter.

Unfortunately, there is an all too large proportion of non-professional auto drivers out there who are idiots, (and even some professionals unworthy of the designation, unfortunately) and the (mainly) auto drivers who do not understand physics cause accidents that can have bad outcomes with any volatile cargo.

The safest, most economical, and lowest Carbon footprint methods of transport are the ones which the Administration and certain judges keep taking out of play.

[Elderberry]

There are over 4,400 wells that have already been drilled awaiting completion, some liquids, some gas.

In the oil industry, this is known as the low-hanging fruit and are the very first production to access at these high prices.


https://www.eia.gov/petroleum/drilling/

My son worked all of those fields except for Haynesville and Niobrara. He's working for SpaceX now in Boca Chica,  but it wouldn't surprise me in the least if he goes back to the Oil Patch one day.

[Hoodat]

It amazes me how not a single dinosaur died in Georgia.  They all must have died in Texas, Oklahoma, Pennsylvania, North Dakota, etc.

[Elderberry]

It amazes me how not a single dinosaur died in Georgia.  They all must have died in Texas, Oklahoma, Pennsylvania, North Dakota, etc.

They had a few visitors that passed away in Georgia.

Oil Reserves in Georgia
Georgia holds 35,000,000 barrels of proven oil reserves as of 2016, ranking 80th in the world and accounting for about 0.0% of the world's total oil reserves of 1,650,585,140,000 barrels. Georgia has proven reserves equivalent to 2.9 times its annual consumption.

[Hoodat]

That's the country of Georgia, not the State of Georgia.

[IsailedawayfromFR]

My son worked all of those fields except for Haynesville and Niobrara. He's working for SpaceX now in Boca Chica,  but it wouldn't surprise me in the least if he goes back to the Oil Patch one day.

He has seen a lot in the US.

And if oil stays in the $90s, oil companies will be desperate to obtain seasoned folks like him.
The oil business rewards handsomely in good times like this.