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Oil prices.. how low can it go?
Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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Oil price falls below $28 a barrel as Iran sanctions lifted http://www.bbc.com/news/business-35340893..desire to succeed is always fighting with fear of failure..
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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Good. KK will benefit. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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enyands wrote:VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking. Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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VituVingiSana wrote:enyands wrote:VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking. Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits. its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term... ..desire to succeed is always fighting with fear of failure..
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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maina20 wrote:VituVingiSana wrote:enyands wrote:VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking. Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits. its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term... To whom have you left "hedging" to sir maina20,and if they canceled it then the price for termination of contract is another cost. Beat that in mind
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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enyands wrote:maina20 wrote:VituVingiSana wrote:enyands wrote:VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking. Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits. its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term... To whom have you left "hedging" to sir maina20,and if they canceled it then the price for termination of contract is another cost. Beat that in mind .. very true..Hedging will make the banks happy at expense of the hedging firm. The effect of currency hedging will however be less severe than oil/burrel hedging since local currency have not been so volatile against the Dolar... ..desire to succeed is always fighting with fear of failure..
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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maina20 wrote:VituVingiSana wrote:enyands wrote:VituVingiSana wrote:Good. KK will benefit. Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking. Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits. its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term... KK does not hedge [after the 3rd degree burns in 2011-12] & so benefits from the drop in prices. Ask @obiero about hedges for KQ but his bosom buddy loves hedges [& kickbacks]. If those hedges are at prices higher than $30 for the foreseeable future, kuna noma. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/22/2008 Posts: 2,695
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Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$.
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Rank: Member Joined: 2/18/2011 Posts: 448
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Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day. They are planning on pumping 500K bpd in the short term with a projected increase in the coming years. OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above. In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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The OPEC cartel is no more. Once a cartel goes out with a bang so does the market. Oil will be cheap for a very long time. The major downside to cheap oil is global war. Fuel bills for military becomes cheap. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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mibbz wrote:Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day. They are planning on pumping 500K bpd in the short term with a projected increase in the coming years. OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above. In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply. so how much money were making when the oil was at $110 . Mind boggling
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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mibbz wrote:Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day. They are planning on pumping 500K bpd in the short term with a projected increase in the coming years. OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above. In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply. Iranian oil production is adequately a threat. Entry into the oil market has created some astonishing ripple effects on the political arena in the middle east. Execution of Iranians associated with"terrorism"was a side show to trigger diplomatic tangles between the two countries. All this happened shortly before the sanctions were lifted off Iranians. Saudis ain't happy with the entry of Iranians because of vast oil deposits and cost oft production that they have.bringing tensions between the sunnis and shiites. Expect prices to be low as Iranians want to economically punish the Saudis. I foresee rebound in five years to roughly $56pb
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Rank: Elder Joined: 7/22/2008 Posts: 2,695
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heri wrote:mibbz wrote:Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day. They are planning on pumping 500K bpd in the short term with a projected increase in the coming years. OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above. In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply. so how much money were making when the oil was at $110 . Mind boggling Saudis have serious money that they have used to hide serious problems. The country is one huge welfare state with massive unemployment and those who are educated have degrees in uneconomically viable disciplines like Islamic Studies. They need high oil prices to keep all those lazy guys happy otherwise they will cause problems at home.  If however this chart is true, oil could be very cheap for a very long time to come. 
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Rank: Veteran Joined: 8/10/2014 Posts: 954 Location: Kenya
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mibbz wrote:Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day. They are planning on pumping 500K bpd in the short term with a projected increase in the coming years. OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above. In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply. Those margins are tooooooo sexy
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. Enjoy the good times while they last. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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Plus the Americans [bless them] have been working on other technologies including bio-fuels from algae, switchgrass and, of course, fracking for better oil recovery. https://en.wikipedia.org/wiki/Algae_fuel
http://articles.extensio...-for-biofuel-production
Some of these technologies are not viable at $30 but as prices rise they will become important thus act as a cap on oil prices. Other countries eg Kenya is moving towards geothermal displacing thermal sources for electricity production. Rwanda is looking at methane. Tanzania at LNG. India has cars that run on locally produced CNG. SA has for years 'made' liquid fuels from coal. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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....another reason for even further dive in prices.. China -a major consumer pushes demand down by releasing a the worst GDP growth in 25yrs..http://www.bbc.com/news/business-35349576 ..desire to succeed is always fighting with fear of failure..
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Rank: Member Joined: 2/20/2015 Posts: 465 Location: Nairobi
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South Sudan pays to Khartoum 24.5 U.S Dollars per barrel and oil price at USD 30 they are selling at a loss. Khartoum has refused to reduce charges and now South Sudan threatening to shutdown oil fields. Things are thick!!
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Kusadikika wrote:Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:
USA-36$
Canada-41$
Brazil-49$
UK-52$
And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$. Agreed. Though for prices to pick up in the time frame of a year prices will have to dip to sub $20 per barrel in the short term, absent that give the bear at least another two year reign. The main purpose of the stock market is to make fools of as many people as possible.
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