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Price of oil
Posted: Tue Aug 09, 2022 8:12 am
by 12345plainsman
If in some way the price of oil was pushed back to 60 dollars a barrel would all sweet 16 companies remain profitable?
Re: Price of oil
Posted: Tue Aug 09, 2022 9:10 am
by Fraser921
I'd say yes. You can model it by downloading Dan''s models
I think they are all profitable down to 40-45
Re: Price of oil
Posted: Tue Aug 09, 2022 9:52 am
by dan_s
Yes, all of the Sweet 16 would all be profitable with oil at $60/bbl. They all survived and extended period of $40 oil and their balance sheets are in much better shape today than they were at the beginning of the pandemic.
Keep in mind that except for CRK, which is close a pure natural gas company, all of the Sweet 16 produce and sell a combination of oil, natural gas and NGLs. Oil prices are set by the global market, which is clearly under-supplied. Natural gas and to a lesser extent NGL prices are set by regional supply/demand.
There has been a "Structural Change" in the U.S. natural gas market with the surge in demand for LNG. The propane market is also extremely tight. All space heating fuel inventories are too tight for this time of year.