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SAUDI OIL MINISTER: I Don't Care If Prices Crash To $20 — We're Not Budging

http://www.businessinsider.com/r-sau...s-mees-2014-12

Monday's edition of the Saudi-owned al-Hayat newspaper quoted the kingdom's oil minister Naimi as saying Saudi Arabia is prepared to increase output and gain market share by meeting the demands of any new customers.

"Given the lead time in permit approval and rig construction ahead of oil production, a sizeable negative U.S. supply response given the price drop is unlikely to take place until late 2015, which places further downward pressure on oil prices in the first six months of next year," National Australia Bank said in a note.

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Layoffs occur in most mergers, regardless of the external economic conditions.  Many of the non revenue functions don't require the full staff that both of the merging entities would otherwise bring with them because a lot of that work gets consolidated.

 

Regardless, a boom by definition can't last forever.  Absent some tectonic change (i.e., the steel mills leaving for overseas), neither do the busts.

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I would say that mergers tend to happen in relatively good economic times, and because the company is still extant and stronger than ever, laid off employees get severance benefits. Meanwhile, mergers may keep some divisions afloat too--we know for instance Randalls has gotten a stay of execution due to the merger, and all those jobs associated have been saved.

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  • 2 weeks later...

Yes, but developers - such as the ones interviewed - won't go belly up in a year.  They also (I would think) would be the first to draw back amid any fear of regional recession talk?  They have the money to wait it out, but wouldn't be preaching optimism (or at least not preaching pessimism) if they really had a need to worry.

 

We won't know the full scale and depth of the current "crisis" until its over and we can study it.

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Pessimists aren't realists. They are hapless, hopeless losers that actual realists never take anymore seriously than an adolescent throwing another in a long line of endless, repetitive, predictable hissy fits. Pessimists seldom bring anything of value to anyone.

Edited by SMF
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Pessimists aren't realists. They are hapless, hopeless losers that actual realists never take anymore seriously than an adolescent throwing another in a long line of endless, repetitive, predictable hissy fits. Pessimists seldom bring anything of value to anyone.

 

Said the anonymous person on an internet forum.

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Pessimists aren't realists. They are hapless, hopeless losers that actual realists never take anymore seriously than an adolescent throwing another in a long line of endless, repetitive, predictable hissy fits. Pessimists seldom bring anything of value to anyone.

 

was that directed at me? i hope so!

 

and to think i was very recently called "the most optismitic poster on Matt Bullard of HAIF"

Edited by swtsig
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Rather than name call each other, let's try this......

A game:

Here are the scenarios:

1) "Oil prices stay at or below $52 per barrel for all of 2015 and do not recover to $65 per barrel until the fall of 2016".

2) "oil prices have already bottomed out and will recover to $70 per barrel by the end of 2015 and $95 per barrel by the end of 2016"

Now the game...... You just assume that either of these are true to play ...... Predictions:

Scenario 1:

My prediction: 100,000 or more job loses in Houston, resi real estate prices fall by 20% (more in outlying communities, new resi construction slows to a trickle, many notable commercial projects cancel construction

Scenario 2:

My prediction: minimal job loses, resi prices essentially flat, new resi construction impacted.... Maybe 50% fewer starts, and only a few notable projects get terminated.

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I hope construction doesn't stop, slow down, maybe it can do that, but for the last few years Houston has been growing by over 100k people per year, the number of housing units coming on line, while I don't have more than my finger in the wind, hasn't kept up with that demand. Even if the city grows by 0 people this year and next, they still need to build.

 

Oil prices be damned, we have a lack of housing in Houston and there are two things that can fix that, build, or people need to leave.

 

The latter may happen as a result of oil prices, but so far most of the oil companies are reducing or stopping hiring, not laying off, and even if they do lay off, will it be at a rate that exceeds the number of people moving here?

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Yeah, one thing some people aren't remembering from the 1980s was the collapse of the S&L banks. Again, because of the diversification of Houston and other features, I think probably the worst of the downturn will be cancellation of big projects. Personally, I'd like to see slowdown in Inner Loop townhomes. It's like an invasive species.

Edited by IronTiger
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Sure, things look threatening now, but what would happen if oil went up to $200 a barrel?

 

http://www.bloomberg.com/news/2015-01-26/opec-s-el-badri-sees-200-oil-possible-with-lack-of-investment.html

:lol:

 

 

 

Prices as high as $200 probably won’t happen because “a move back above $100 will bring the shale oil drillers out in force as they can relatively quickly react to rising prices.”

toxtethogrady I do enjoy your posts on here and particularly on SSP.

 

"More companies looking Downtown may fuel new office building demand (or something along those lines)."

Followed by a link with 1 company looking for +/- 30,000sqft. ;)

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BP will be freezing all pay worldwide this year and then I read this:

 

Weinstein said there's talk that Irving-based Exxon Mobil Corp. (NYSE: XOM) or another major oil company could buy British Petroleum.

 

http://www.bizjournals.com/dallas/blog/2015/01/who-wins-in-the-18b-energy-transfer-partners-deal.html?page=all

 

Sounds like BP is in major trouble, and it has been with its court battles, but especially now with oil as low as it is.

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HOUSTON – Petroleum producers took 94 oil-drilling rigs off the market in the United States this week as sub-$50 oil continued to wreak havoc on the oil industry, Baker Hughes reported Friday.

It was the biggest one-week decline for oil rigs since 1987, the earliest year of Baker Hughes data available. That year, the oil industry had faced another oil bust that left hundreds of rigs idle or repossessed by banks, which sold them for scrap.

This week’s drop left 1,223 oil units up, the lowest number in three years.

http://fuelfix.com/blog/2015/01/30/oil-rig-count-falls-by-94-in-biggest-drop-since-1987/

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Its safe to say the boom is over.  So to answer the thread question - no.  But, I don't think its all doom and gloom like people are saying.  Bad for the oil field production people but things could pick-up quickly unless the national economy tanks.

 

I don't think we're looking at a repeat of the 1980s crash.  At least we should hope not!  Kiss any transit or livability projects good bye if that happens.

 

I think the better discussion to have is:  How else should Houston diversify its economy following the latest slump in the oil patch?

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