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Saudi Arabia Oil Turn & The COVID-19 Pandemic


MidCenturyMoldy

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4 hours ago, Montrose1100 said:

I was talking about "spec" offices. The Energy Corridor has never truly recovered from the glut back in 2014-2016. The new stuff in Downtown has been United Airlines, BOA, and who knows what will go in the Texas Tower.

 

I'm not saying we won't hurt. But the recovery won't be as long... maybe. The Corona Virus scare is really screwing up a lot of industries short term. Korea Air having temporary layoffs. Italy basically shutting down. I hope that panic doesn't come here. Everyone will be screwed, not just Houston.

 

this is a good article:

https://oilprice.com/Energy/Energy-General/The-First-Casualty-Of-Tanking-Oil-Prices.html

 

at the start of the 2014-16 thing it was over $70 for break even. then when 2016 hit and Saudi decided it wasn't worth it, it was around $40 for break even.

 

that article states that now it is around $25 for break even. if that's to be believed (I can't find data to back it up anywhere else), things aren't quite as doom and gloom, they just aren't as awesome as they would have been 3 weeks ago.

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Bear in mind that the o&g sector has a boom and bust business cycle.  The folks running these companies, particularly the majors, expect that things like this will happen and know how to deal with it.  Just my speculation, but I suspect the panic will be short lived as covid19 passes through the population and we get used to it being around.

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I mean, I'm honestly surprised they let it stay open as long as they did.

 

I wouldn't be surprised if most of April ends up being canceled as well.

 

NCAA basketball will probably still have their tournament, but I wouldn't doubt if they have already decided to play at empty arenas. 

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How worried should I be that I’ve driven all over this town for last nine days looking for hand sanitizer and found nothing. Plus the ingredients to “ DIY your own “ also missing. I think I will have to drive down to our beach house to bring back the rubbing alcohol and aloe Vera gel we keep down there.

 

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12 minutes ago, trymahjong said:

How worried should I be that I’ve driven all over this town for last nine days looking for hand sanitizer and found nothing. Plus the ingredients to “ DIY your own “ also missing. I think I will have to drive down to our beach house to bring back the rubbing alcohol and aloe Vera gel we keep down there.

 

Amazon! I  buy Industrial nitrile gloves for cleaning. They might come in handy just to vogue around town since hand sanitizer makes my skin dry up and bleed.

 

If you're on r/houston there have been posts advising on when area grocery stores are restocked. If you're not having any luck try unusual places like gas stations, non-chain pharmacy's, corner stores, and dollar stores. There's a Valero on Canal that was stocked full of water when the grocery stores were wiped out during the water main bust.

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1 hour ago, trymahjong said:

How worried should I be that I’ve driven all over this town for last nine days looking for hand sanitizer and found nothing. Plus the ingredients to “ DIY your own “ also missing. I think I will have to drive down to our beach house to bring back the rubbing alcohol and aloe Vera gel we keep down there.

 

 

I'm going to try the burbs this weekend. Helping someone move out. I'm sure one would have better luck finding anything the further away from population centers one gets.

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45 minutes ago, trymahjong said:

Yup

I agree but In the car with toddler going out.....sometimes no soap and water available....of course I could carry jug of water and bar of soap but my mind keeps playing Murphy’s Law over and over.......  😞

 

Agree. Hand sanitizer has utility because you don't need water, and its easy to apply. I just want 3. One for my car, one for at my work station, and one for when I walk through my door at home. Soap is good for when you have water.

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use HEB curbside, or whatever grocery store you go to, use their 'pickup outside' option.

 

add it to your cart, pick it up tomorrow, no muss, no fuss. let them worry about making sure it makes it into your bag.

 

unless it's more about the act of going on a quest, and less about getting what you are looking for with minimal impact to your life.

 

in which case, it's my uninformed opinion that once all the nutters have stocked up, you will have access to all you need.

 

yesterday was crazy at the local Kroger, I didn't go in, but as I rode by I observed the parking lot at levels even superbowl sunday can't match. I didn't want to go in. people were saying shelves were empty, produce, etc. with dry goods, I get it, they are overstocking, just in case, but produce? are they blanching it and putting it in the freezer? are they just going to toss it in a week if they don't eat it? what a waste of food.

 

this event is causing a major panic, and I'm not saying that they shouldn't be worried, we all should, but they weren't worried until they canceled the rodeo, so now, rather than isolating, they are going to go stand in line with hundreds of other people who might be spreading this, or another disease you don't want? no thanks. I'll wait to go till early in the morning at some point next week.

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32 minutes ago, samagon said:

use HEB curbside, or whatever grocery store you go to, use their 'pickup outside' option.

 

add it to your cart, pick it up tomorrow, no muss, no fuss. let them worry about making sure it makes it into your bag.

 

unless it's more about the act of going on a quest, and less about getting what you are looking for with minimal impact to your life.

 

in which case, it's my uninformed opinion that once all the nutters have stocked up, you will have access to all you need.

 

yesterday was crazy at the local Kroger, I didn't go in, but as I rode by I observed the parking lot at levels even superbowl sunday can't match. I didn't want to go in. people were saying shelves were empty, produce, etc. with dry goods, I get it, they are overstocking, just in case, but produce? are they blanching it and putting it in the freezer? are they just going to toss it in a week if they don't eat it? what a waste of food.

 

this event is causing a major panic, and I'm not saying that they shouldn't be worried, we all should, but they weren't worried until they canceled the rodeo, so now, rather than isolating, they are going to go stand in line with hundreds of other people who might be spreading this, or another disease you don't want? no thanks. I'll wait to go till early in the morning at some point next week.

Usually do our bi weekly grocery shopping on Saturday or Sunday. Looks like I'll be patient until next week as well. All my favorite restaurants on Uber Eats were closed until Monday. I thought that was strange.

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5 hours ago, Luminare said:

 

I'm going to try the burbs this weekend. Helping someone move out. I'm sure one would have better luck finding anything the further away from population centers one gets.

 

Its the opposite my G. The further out you are the fewer Grocery stores in a 4 mile radius, and those will have lines out the door. Pearland, Sugarland, Tomball, and Spring all have HEB's that are bananas, per my friends. People seem to forget whole foods exists. Also if you want Hand Sanitizer, go to Walgreens/CVS. 

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20 hours ago, X.R. said:

 

Its the opposite my G. The further out you are the fewer Grocery stores in a 4 mile radius, and those will have lines out the door. Pearland, Sugarland, Tomball, and Spring all have HEB's that are bananas, per my friends. People seem to forget whole foods exists. Also if you want Hand Sanitizer, go to Walgreens/CVS. 

You found a Walgreens with hand sanitizer?! And Whole Foods on Post Oak was crazy yesterday, too. Maybe not CostCo crazy but still pretty bananas. I've also seen suggestions to go to Asian markets as they are still well-stocked.

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On 3/13/2020 at 9:10 AM, Luminare said:

 

I'm going to try the burbs this weekend. Helping someone move out. I'm sure one would have better luck finding anything the further away from population centers one gets.

suburban stores have been raided of all paper products, eggs, ramen, and hand sanitizer already.

 

Next year, UN inspectors will find 300 million dead people with very clean asses... LOL

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Heights HEB was still reasonably well-stocked on Wednesday night, the only thing that stuck out was that bananas were completely sold out. 

 

OTOH, went to the Kroger on Studemont last night half intending to pick up a couple of things and half curious as to what it would look like. It was seriously picked over, with large sections of certain items (hot dogs, pasta, frozen vegetables, orange juice, bottled water, paper goods) either empty or near-empty.  

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Went to Sprouts on Yale today. Frozen veggies were gone, as were pasta and pasta sauce. Milk was available, as were eggs. No bread to speak of, They had paper products, but I am not paying "green" prices for that stuff. I'll either wait until things settle a bit, or drive out to the middle of nowhere.

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Got my supplies ( 91% rubbing alcohol- Aloe Vera- lavender oil) and put together DIY hand sanitizer.  Guess I’ll have to tweak the portions  as it was a bit runny. Still somehow , that and all the hotel “gimme” mini soaps  I unearthed from various junk drawers around gives me a bit of confidence as I hunker down to self quarantine.

Edited by trymahjong
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On 3/13/2020 at 11:24 AM, Luminare said:

 

Agree. Hand sanitizer has utility because you don't need water, and its easy to apply. I just want 3. One for my car, one for at my work station, and one for when I walk through my door at home. Soap is good for when you have water.

 

We were way out in the country this weekend and even there the toilet paper, hand sanitizer and rubbing alcohol were all gone.

Edited by august948
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On 3/14/2020 at 3:11 PM, Ross said:

Went to Sprouts on Yale today. Frozen veggies were gone, as were pasta and pasta sauce. Milk was available, as were eggs. No bread to speak of, They had paper products, but I am not paying "green" prices for that stuff. I'll either wait until things settle a bit, or drive out to the middle of nowhere.

HEB on W Alabama was picked clean. Managed some chicken, bread, cold cuts, toothpaste (seriously the last one), Orange Gatorade, random weird soups (cream of poblano), 4 ramens, frozen pizza, fruits & veggies, it was dismal. 

 

I heard the Whole Foods on Kirby is stocked.

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Don't tell anyone, but Phoenicia downtown was well stocked and even had toilet paper on sunday. It could have changed over the last two days, so buyer beware.

 

Not my typical grocery haunt because I think the word Phoenicia is Mediterranean for expensive, but it was very nice to grab and go without having to fight people.

Edited by jermh
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most oil is in the mid 20s for price.

 

Halliburton just announced furloughs, which is better than just laying off, they are furloughed for 60 days. 

 

shit's about to get real, Houston is not going to be alone in this though.

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So, China dumps steel on the US market and Trump starts a trade war with big tariffs.  Saudis do the same with oil (yes, I know it is traded on an international market, but effect is the same) and no one bats an eyelash.  Is the benefit of cheap energy to US business great enough that the government just looks the other way and makes the O&G sector take one for the team?  Or is our alliance with SA as a counterweight to Iran more important than the domestic O&G sector?  

 

I can see how the 2015 glut was something that the energy sector could be expected to ride out as the economy was otherwise doing well.  But the Saudis' move potentially could set off a systemic crisis in financial markets with a waive of bond defaults coming out of the O&G sector and spreading to the rest of the corporate bond market.  Or does the government just let the Saudis have their fun, bailout the O&G sector and try to recoup the money in arms sales to the Saudis?

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On 3/10/2020 at 12:23 PM, arche_757 said:

All of this is pure speculation by everyone.

 

How many of the 75,000+ who were let go in ‘15-‘17 have been rehires in the oil industry?  A continued downturn will hurt, but it won’t be the end of the city.  Of course the depth and size of the global recession we are seeing signs of will ultimately determine how bad things get all over.  Interestingly this is all occurring in an Presidential election year here in the States.

 

the TMC and tech incubator projects aren’t going away, and they have funding regardless of what oil does.  If anything this virus may spur investors into medics/bio-medical more than tech or other industry?

 

...that said, I guess we will all see.  For once I’m going to try and be optimistic since s&?* could get REAL bad if Covid-19 mutates into a higher mortality rate virus, or another flu strain comes about next fall!  Ironically it was just a tad over a century ago when Spanish Influenza wrecked havoc, of course there aren’t many parallels to that since we don’t have a global war and famine caused by blockades.  Imagine how bad this would all be if MERS was running amok!!!  30% mortality rate.

 

The saving grace for humanity is that when a disease kills people quickly it doesn't spread very far or fast.  The reason covid19 is now a pandemic is that many people don't get visibly sick or only mildly sick and then quickly recover.

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28 minutes ago, s3mh said:

So, China dumps steel on the US market and Trump starts a trade war with big tariffs.  Saudis do the same with oil (yes, I know it is traded on an international market, but effect is the same) and no one bats an eyelash.  Is the benefit of cheap energy to US business great enough that the government just looks the other way and makes the O&G sector take one for the team?  Or is our alliance with SA as a counterweight to Iran more important than the domestic O&G sector?  

 

I can see how the 2015 glut was something that the energy sector could be expected to ride out as the economy was otherwise doing well.  But the Saudis' move potentially could set off a systemic crisis in financial markets with a waive of bond defaults coming out of the O&G sector and spreading to the rest of the corporate bond market.  Or does the government just let the Saudis have their fun, bailout the O&G sector and try to recoup the money in arms sales to the Saudis?

 

Trump sees oil prices as something that hurts the common man when they are high, and he has typically issued warnings to Saudi Arabia and O&G companies when oil crept above $60. This is part of his populist appeal. In terms of bailouts, I think any bailout or other government assistance to oil companies is politically toxic since they have such a bad guy image, especially with climate change. They have always relished their independence and free market spirit and this is just one of those times when that sword cuts the other way.

 

Edited by H-Town Man
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13 minutes ago, august948 said:

 

The saving grace for humanity is that when a disease kills people quickly it doesn't spread very far or fast.  The reason covid19 is now a pandemic is that many people don't get visibly sick or only mildly sick and then quickly recover.

 

Yeah its not really the virus itself that makes it a concern. Its the fact that we don't have an immunity to it, and if you have it you are contagious for a longer period of time, or if you only exhibit mild symptoms you are still contagious and can infect others for a longer period of time without knowing it.

 

23 minutes ago, s3mh said:

So, China dumps steel on the US market and Trump starts a trade war with big tariffs.  Saudis do the same with oil (yes, I know it is traded on an international market, but effect is the same) and no one bats an eyelash.  Is the benefit of cheap energy to US business great enough that the government just looks the other way and makes the O&G sector take one for the team?  Or is our alliance with SA as a counterweight to Iran more important than the domestic O&G sector?  

 

I can see how the 2015 glut was something that the energy sector could be expected to ride out as the economy was otherwise doing well.  But the Saudis' move potentially could set off a systemic crisis in financial markets with a waive of bond defaults coming out of the O&G sector and spreading to the rest of the corporate bond market.  Or does the government just let the Saudis have their fun, bailout the O&G sector and try to recoup the money in arms sales to the Saudis?

 

What makes China different than Saudi Arabia is that China poses a greater geopolitical threat than the Saudi's. While it sucks that the Saudi's are doing this and at this time, looking through the lens of realpolitik one understands that this is literally all the Saudi's have which prevents their country from going down the drain. While the Saudi's are responsible for a lot of stupid stuff, and we probably shouldn't be entangled with them as we are, again realpolitik, they are the one power in that region that keeps it from becoming a bloodbath of chaos. A lot of nations around the world would rather have a stable and consistent Saudi rule rather than the instable rule of others like Egypt or Iraq and Iran. Not to mention nobody likes Turkey who could easily sweep in take all that territory without a Saudi threat. Keeping the Saudi's going is the only way to keep the Mid East as is so it doesn't become an even worse place. China on the other hand if left uncheck as hit has been for decades now becomes a real geopolitical threat not only to its region, but to US interests. China pretends to act like a 3rd world nation in the trade market when its actually not that at all. It flooding the market in this way is very clear manipulation of the market which they don't have to do as they are powerful enough to not rely on one industry alone.

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this is as good a thread as any I guess to not only post oil updates, but covid-19 updates.

 

if you hear a rumor about the port of Houston closing, this is a gross overstatement:

https://www.khou.com/article/news/health/coronavirus/port-of-houston-closes-2-terminals-after-worker-tests-positive-for-coronavirus/285-8daf3e82-91ba-4189-a3da-5490628e3870

 

just 2 terminals and from the way it reads, it's only going to be a short period of time.

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