Post: #251

(01-28-2015 06:16 PM)PittFighter Wrote:  I checked Orbitz that was pre-taxes and fees
still its really Cheap
I am seriously considering late April. A great balance between decent weather and good price.

Use kayak.ru and check the price in Rubles. Should be significantly lower.

Post: #252

(01-28-2015 05:24 PM)DaveR Wrote:  

(01-28-2015 03:44 PM)The Ligurian Wrote:  NYC - Moscow - NYC for $300?! Does that include taxes? I pay more than that from Europe. That's an incredible price.

That probably doesn't include taxes, but it's cheaper than it was last year (around $400 from memory). Moscow-NA has always been very cheap due to the volume and competition on the Moscow to NYC leg.

(01-28-2015 04:12 PM)Menace Wrote:  Who the hell wants to go to Moscow in Jan/Feb? Screw that.

Yes, that's why the prices are very 'seasonal.'

I was there then, it's dreamy and romantic. I mean if you are tough at all.



It's great being with a girl inside a cozy apartment when it's crazy freezing.

Watch out for slippery sidewalks. I knew a medical student in Lviv when it was cold and she was telling me in the hospital it was just endless broken arms and fall injuries.

Post: #253

(01-28-2015 08:16 AM)Handsome Creepy Eel Wrote:  If Russia falls before this onslaught and eventually gets pushed into default/bankruptcy/permanent recession, what hope is there for the rest of the world? If that happens, then surely all other countries be better off just rolling with their bellies up and admitting that they must do what US tells them or be destroyed.

p.s.

Chengiz88 Wrote:Chinese GDP lowest in 24yrs...whats happening the chinese not manipulating their data as per normal

Not to nitpick, but it's GDP growth rate, not absolute GDP. And many countries would kill for a 7.3% growth rate.

Nitpick away!!! Yes you are correct it is GDP growth rate.

Post: #254

(01-26-2015 05:47 PM)Akula Wrote:  

(01-26-2015 04:16 PM)Chengiz88 Wrote:  Just seen this - So the attack on Putin continues

It's not going to stop I don't think. The powers that be in the west have it in for them and seem to want to do anything they can to put Russia and Putin in a bad light now.

Moody's and Fitch just recently downgraded Russia or put them on negative watch too so they will probably soon follow. This from the (US-based) ratings agencies that traditionally have acted slowly and missed the entire mortgage debt crisis.

Agreed the ratings agencies aka clowns of 2007/8 are now passing judgement on Russia. I'm sure there is no political interference in their decisions!!

Post: #255

(01-27-2015 03:17 PM)BigDave Wrote:  

(01-26-2015 04:16 PM)Chengiz88 Wrote:  Just seen this - So the attack on Putin continues

Has nothing to do with politics. This is about fundamentals:

1) Oil price collapse in an economy that has 70% of its exports as oil and gas
2) Longstanding corruption/efficiency issues (economy barely grew in 2013 even before Ukraine started)
3) Sanctions

The downgrade makes sense economically. Even though Russia has low sovereign debt, it has a whole lot of quasi-sovereign debt (e.g. Rosneft has a $10 billion payment due next Friday). The government basically has to back that debt with its reserves, and they are dwindling fast. Total external debt is about $600 billion I think.

The best analysis I've seen says Russia can last through 2016 with low oil prices and US sanctions, after that it's all bets are off.

That said there is a political war against Putin going on, but that's because Russia is fighting a war with Ukraine. Doesn't take a genius to know that there will be consequences (sanctions).

Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

Post: #256

(01-29-2015 03:08 PM)Chengiz88 Wrote:  Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

The drop in oil is actually a return to normalcy. The prices for the last decade are what was artificially manipulated.

Post: #257

The ratings agencies were indeed duped by turning a blind eye to the risk chain created by the slice and diced mortgage-backed securities.

But Russia in 2015 is a pretty cut and dry case of emerging market economy with currency collapse due to over-reliance on a single export, revealing a high debt load (over 50% of GDP). This kind of thing is very textbook, and has been correctly analyzed and predicted for many decades. The sanctions are just the cherry on top (or the straw that broke the camel's back?).

Say all you want about secret dealings but all the real players know this is just market forces being acted out, as new technology has fundamentally shifted the nature of oil extraction, turning what used to be hard-to-recover deposits into something profitable at a much lower level.

Quote:You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?

The invisible hand of the market, of course.

Post: #258

(01-29-2015 06:06 PM)AeroDev Wrote:  

(01-29-2015 03:08 PM)Chengiz88 Wrote:  Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

The drop in oil is actually a return to normalcy. The prices for the last decade are what was artificially manipulated.

AeroDev,

For my education could you go into detail about this? Thanks.

Post: #259

(01-30-2015 02:24 PM)samsamsam Wrote:  

(01-29-2015 06:06 PM)AeroDev Wrote:  

(01-29-2015 03:08 PM)Chengiz88 Wrote:  Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

The drop in oil is actually a return to normalcy. The prices for the last decade are what was artificially manipulated.

AeroDev,

For my education could you go into detail about this? Thanks.

AeroDev is right on, the average inflation adjusted price of oil per barrel from 1946-2014 is $41.70, that's inflation adjusted, so people thinking that $75-100 is normal and that it will naturally return to $75-100 a barrel and thus save Russia are most probably wrong based on economics and history in addition demand for oil isnt exactly growing like gangbusters.

Post: #260

^^ Lifting costs in the US are typically higher than 41.70/bbl. If that price lasts a long time, a lot of production will be taken off line. Shale and oil sands are much more expensive than the lifting costs in Saudi Arabia.

I am not sure if you can use data all the way back to the 1946. I think supply and demand is much different then.

I am not an economist. But what happens when a lot of supply goes off line due to prices and cannot meet demand? Just curious, I won't claim that I am a genius on this topic, far from it.

Post: #261

Oil popped today:

Oil surges 8 percent as U.S. rig count plunges, shorts scramble

http://www.reuters.com/article/2015/01/3...5Q20150130

^The rig count in the USA is dropping like a stone. My guess is the Saudi strategy of pricing them out of the market is working like a charm.

Oil probably won't pop back up to $100/bbl, but even if it just pops up to $70-$80 later this year, that alone would buy the Russians some breathing room.

Post: #262

(01-30-2015 06:55 PM)MichaelCorleone Wrote:  

(01-30-2015 02:24 PM)samsamsam Wrote:  

(01-29-2015 06:06 PM)AeroDev Wrote:  

(01-29-2015 03:08 PM)Chengiz88 Wrote:  Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

The drop in oil is actually a return to normalcy. The prices for the last decade are what was artificially manipulated.

AeroDev,

For my education could you go into detail about this? Thanks.

AeroDev is right on, the average inflation adjusted price of oil per barrel from 1946-2014 is $41.70, that's inflation adjusted, so people thinking that $75-100 is normal and that it will naturally return to $75-100 a barrel and thus save Russia are most probably wrong based on economics and history in addition demand for oil isnt exactly growing like gangbusters.

Exactly. The realistic price point for oil in 2015 dollars is around $50. Anything around $60 and you should see a boom in exploration like we have the last few years, anything around $40 and you should see some contraction which we are seeing now.

Expecting oil to "naturally" be around $80+ is ridiculous.

samsamsam - Where are you getting the idea that lifting costs are over $41? That's insane man. That's closer to total breakeven costs. Lifting costs are closer to $10 ... obviously more for shale. Of course you are correct that Saudi Arabia is cheaper with lifting costs closer to $4. When you see the doom and gloom media reports, just remember the cost analysis they are going off from is almost always years behind the current situation.

Post: #263

^The boom in exploration was driven by two factors: high oil prices and cheap credit.

Without cheap credit, you need really high oil prices to sustain a boom.

With the Fed tightening, the cheap credit is coming to an end.

Bent oil will be at $70-$80 by year end.

Post: #264

Let's talk about costs for a second.

(1) Total costs include fixed costs and variable costs. Fixed costs are how much it costs to explore, buy the land/rights/whatever, build a rig, etc. Variable costs are how much it costs per extra barrel pumped, also called lifting costs in this thread, and marginal costs by most economists.

(2) When companies decide to build something new, they want the cost per barrel to be enough to cover TOTAL costs. However, once the rig/pump/whatever is built, they will keep pumping as long as the price is above MARGINAL costs. This is because the fixed costs are already sunk. All that matters going forward is, is the cost of "lifting" one more barrel greater or less than the price you could get?

There are a lot of implications, but that's how it works in a nutshell. Maybe it's helpful, maybe not.

Post: #265

^It's even more complicated than that. Shale oil (tight oil) has rapid depletion rates, 70% depletion within a year and like 90% within 3 years.

These aren't wells that you just drill into and stick a pipe in and suck it dry for the next 20 or 30 years.

You have to constantly be drilling more and more wells to get production to rise. Pad drilling has made this a bit easier since you can have multiple wells on one rig, but it is still a very expensive process. Plus, all the shale oil wells in North America are horizontally drilled (expensive) and multi-stage fracked (also expensive).

That is why cheap credit is so essential: shale oil drilling only makes sense at high prices and with cheap financing.

That is also why when rig count drops, production eventually has to drop as well: because of high depletion rates, you need to be constantly drilling to have production rise...any drop in rig counts eventually has a huge impact on future production.

Post: #266

(01-30-2015 07:42 PM)Easy E Wrote:  ^The boom in exploration was driven by two factors: high oil prices and cheap credit.

Without cheap credit, you need really high oil prices to sustain a boom.

With the Fed tightening, the cheap credit is coming to an end.

Bent oil will be at $70-$80 by year end.

You're correct here up until your prediction. Best guess is $60-70 by year end. About $10 of that being artificially higher than it needs to be but that's the current reality of the industry.

Post: #267

There is also the problem of drilling in sweet spots and drilling elsewhere.

Right now the rigs being taken down are in less productive areas and the rigs staying up are in the sweet spots (most productive).

Eventually, though, they are going to have drilled most of the sweet spots and be stuck with less productive areas to drill. That is why I am not convinced of the rosy predictions for North American shale oil that the US EIA puts out. They don't conform with reality on the ground.

Here is good vid explaining it:

Post: #268

(01-30-2015 08:26 PM)AeroDev Wrote:  

(01-30-2015 07:42 PM)Easy E Wrote:  ^The boom in exploration was driven by two factors: high oil prices and cheap credit.

Without cheap credit, you need really high oil prices to sustain a boom.

With the Fed tightening, the cheap credit is coming to an end.

Bent oil will be at $70-$80 by year end.

You're correct here up until your prediction. Best guess is $60-70 by year end. About $10 of that being artificially higher than it needs to be but that's the current reality of the industry.

Nobody really knows what the actual price will be, even if given a range.

My guess is based on my own oil industry experience and what I am seeing going on in the oil industry.

T. Boone Pickens is saying the same thing: people need to pay attention to how fast the rig count is dropping in the USA. He is actually calling for a return to $100/bbl oil by mid 2016.

That is a bit too bullish for my blood, but there definitely will be rebound later this year in oil, if for no other reason than that the shale oil guys are getting crushed at these prices.

Post: #269

How about considering oil prices since the mid 1960's, say over the past 50 years.
In 1965 oil was around $20/bl.
Let's say that inflation in the first world over that period has (conservatively) averaged about 10 - 15 fold, if you take wages, house prices, car prices, etc.

If oil were to have just maintained parity over that period, it would now be at least $200 - 300/bl.

If it's price had risen relatively steadily over that period, most consumers would have probably just accepted it and adjusted accordingly.
However, oil, like agricultural product, is a favorite item for politicians of all flavors to tamper with, so creating the roller coaster.

Post: #270

I was in a hurry when I posted, I didn't mean to say all costs of lifting oil is over 41 whatever the number was. Bad bad if I mixed my terms. I know certain countries like Saudi Arabia are blessed with tremendously low costs. However not all the costs in the US are that low.

Here is a MS report.

http://www.investorvillage.com/uploads/7...2-5-14.pdf

Check page 12 for costs on a country by country basis.

Check Page 18 when they show the crazy costs for shale.

Like I said I am not an economist. While I agree with Goodtimez that the wells that have already been drilled and completed can be looked at from a marginal cost perspective, in the long run oil companies are going to oil drill more when they can cover the entire cost.

Back to this idea that the true price of oil adjusted for inflation is X. That doesn't make sense to me.

For a simple example (and hopefully the experts can jump in) if demand is 100M BBLS a day and supply is a 100M BBLS, then the price should be total cost of that last bbl of oil, right? That would be the clearing price. I am pretty certain that price is over 41 bucks.

No one is going to price based on historical, they are going to make decisions on what their costs are. Or at least the marginal costs. I was told that US production is going to max out in May because of all the investment in shale. But shale output drops quickly, so I have heard the second half is going to start finding some stability.

But historical pricing doesn't mean anything to me.

Post: #271

From the article regarding sentiment in Russia towards the US, results are very interesting.

"Eighty one percent of Russian respondents expressed negative attitudes towards the United States, up from 44 percent in January 2014. We have not seen such aggressive and strong resentment towards the West since we started our monitoring," Lev Gudkov, director of the Levada Centre, told AFP.

The poll also showed that traditionally good relations with the European Union have also taken a beating, with the number of people reporting negative attitudes towards the bloc more than doubling to 71 percent.

Twenty four percent said relations with the EU were now hostile, up from 1 percent in January 2014. Forty one percent spoke of tense relations, up from 9 percent a year ago.

Some 49 percent believe that Russia should win back its G8 (Group of Eight membership) it has lost over its role in the Ukraine crisis."

http://www.telegraph.co.uk/news/worldnew...atest.html

Post: #272

(02-09-2015 12:03 PM)MichaelCorleone Wrote:  From the article regarding sentiment in Russia towards the US, results are very interesting.

"Eighty one percent of Russian respondents expressed negative attitudes towards the United States, up from 44 percent in January 2014. We have not seen such aggressive and strong resentment towards the West since we started our monitoring," Lev Gudkov, director of the Levada Centre, told AFP.

The poll also showed that traditionally good relations with the European Union have also taken a beating, with the number of people reporting negative attitudes towards the bloc more than doubling to 71 percent.

Twenty four percent said relations with the EU were now hostile, up from 1 percent in January 2014. Forty one percent spoke of tense relations, up from 9 percent a year ago.

Some 49 percent believe that Russia should win back its G8 (Group of Eight membership) it has lost over its role in the Ukraine crisis."

http://www.telegraph.co.uk/news/worldnew...atest.html

Well, if in Russia to the West was always rather positive than negative, then in the West to Russia consistently negative attitude lasts for centuries, with occasional glimpses of kindness for a short period of time.
For example, I can't remember at least one Russian movie where the Americans were shown as negative characters. And in Hollywood craft is always the Russians negative heroes, the cause of all the evils on Earth. Thus, you Americans, your American head laid to the desired template, then in the future you would not be sorry to bomb and kill the Russians.
In Russia such stupid propaganda was not even during the Soviet Union, even against Germany, although it would seem...

Post: #273

Ukrainian hryvnia (whatever it is) just imploded practically overnight by 50%. Now trading at over 25 to the dollar. Just at the beginning of 2014 it was 8-1.

Going to Lviv for a bit next month if the country hasn't gone completely to hell by then.

Post: #274

Something to watch out for in Russia: http://www.themoscowtimes.com/news/artic...15767.html

Post: #275

(01-20-2015 01:59 PM)Chengiz88 Wrote:  Chinese GDP lowest in 24yrs...whats happening the chinese not manipulating their data as per normal

Watch this: