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Once
you’ve made it past the car accidents, people missing on Mt Cook,
the murders – and the cricket – you MIGHT just find this piece of
delusory bullshit.
From RT
I suppose they are relying on the punters being pleased by mildl falling petrol prices and not worried by the crash in commodity prices, deflation and the world sinking back into depression
Fuel
price drop good news - Treasury
With
global oil prices plummeting, two major fuel suppliers, Z and BP,
have dropped their prices by another two cents.
Photo: AFP
7
January, 2015
That's
the third drop in a week - and Gull had also cut its prices.
91
octane was now at $1.859 at most petrol stations and even as low as a
$1.71 in some places where local competition was higher.
The
Treasury's director of macro-economic policy Tim Ng said the falling
prices would likely have a positive impact on the Government's
revenue.
Mr
Ng said lower petrol prices would reduce the GST received on each
litre sold but the money saved on petrol would most likely be spent
on other things, bringing in the same amount of GST.
"Overall,
it's probably positive - if you've got a lower oil price, that's an
input into production that's imported, so you're reducing the cost
structure of the economy when oil prices fall."
The
AA said companies could afford to drop the price even more - by up to
10 cents - but BP disagreed.
Spokesperson
Jonty Mills said it has had 17 price drops totalling 40 cents since
October.
"I
think the AA are talking about importer margins, then you have a host
of local operating costs requirement to continue to invest in this
market, in infrastructure and assets and of course a return to the
shareholder."
"There's
a very fierce and competitive market out there with lots of
transparency and I think the activity recently has displayed that."
The
price of benchmark Brent crude oil fell by more than half since
mid-2014, and was now at its lowest in five and a half years.
From RT
How
low can it go? Brent oil falls below $50 - first time since 2009
RT,
7
January, 2015
Brent
crude oil has fallen below $50 per barrel on the London Stock
Exchange - the lowest plunge since the dark days of the 2008
financial crisis. So far in 2015 Brent has already lost 10% of its
value, after wiping out 50% in 2014.
Brent
crude is the European trading benchmark, and is following the spiral
trajectory of its US-counterpart WTI, which sunk below
$50 per barrel for February contracts on Monday.
Brent oil hits drops below the $50 per
barrel threshold January 7, 2015. Source: Bloomberg
Oversupply
in the market combined with a downturn in global demand has seen
prices plummet to new lows.
Much
of the oversupply has come from the US, which in the last five years
went from the world’s biggest importer of petroleum to the biggest
global producer, even outpacing Saudi Arabia. The US may soon begin
exporting supplies.
Although
there is a massive oversupply in the market, no individual oil
producer wants to be the first to cut production. In Russia,
production in 2014 rose 0.7 percent and averaged 10.58 million
barrels a day, which set a post-Soviet record. The US also continues
to keep large stockpiles, estimated at over 700,000 barrels last week
by Bloomberg, which also sent global prices tumbling.
The
new oil glut reality has forced many to revise their oil forecasts,
with a number of analysts agreeing the rout will carry on through
2015. A Reuters analyst wrote that Brent could fall as low as $41.99
per barrel, and WTI down to $36.74 before any price recovery starts.
Oil
continues to search for new lows, which benefits consumers but hurts
oil producing countries, which need to sell barrels at a certain
price in order to balance state spending. Oil exporters are set to
lost trillions if oil continues its slump, and importers will see an
increase in purchasing power, which could stimulate domestic
economies.
"I
wouldn’t be surprised if the price falls to as low as around $20...
It is purely due to supply and demand. There is a ceiling for oil
because high energy prices dampen economic growth," Nobuyuki
Nakahara, a former oil exec, told Reuters, saying a further plunge is
plausible.
The
price of oil has been declining steadily since peak prices in June of
$115 per barrel, and the fall accelerated in November after the
12-nation oil cartel OPEC decided not to cut production levels.
In
2008, oil prices lost 60 percent, dropping from $140 per barrel to
below $40 per barrel. OPEC, led by Saudi Arabia, cut production to
alleviate the price plunge.
The
First Shale Casualty: WBH Energy Files For Bankruptcy; Many More
Coming
7
January, 2015
"There are too many ugly balance sheets," warns one energy industry analyst, adding simply that "the group is not positioned for this downturn." While the mainstream media continues to chant the happy-clappy side of lower oil prices, spewing various 'statistics' about how the down-side of low oil prices is 'contained' and the huge colossal massive tax cut means 'everything is awesome' for America, the data - and now actions - do not bear this out. Macro data has done nothing but disappoint and now, we have the first casualty of the shale oil leverage debacle as WSJ reports, on Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money. There are many more to come...
In December we illustrated the problem names (in the publicly traded markets) among the most-levered energy companies in America...
And now, as The Wall Street Journal reports, the bankruptcies have begun as financing costs are not just prohibitive, there is no liquiidty available at any price for many...
American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion.Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June.But signs of strain are building in the oil patch, where revenue growth hasn’t kept pace with borrowing. On Sunday,a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment.Energy analysts warn defaults could be coming. “The group is not positioned for this downturn,” said Daniel Katzenberg, an analyst at Robert W. Baird & Co. “There are too many ugly balance sheets.”...In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ.As of their latest quarter, such companies had $199 billion of combined total debt.Before crude prices began falling, U.S. oil and gas producers were able to acquire leases and drill wells even if that meant outspending their incomes. Debt was used to bridge the cash shortfall so that companies could develop oil fields in Texas, North Dakota and newer locations including Colorado.
Now that is coming back to bite.
The upshot of cash conservation and higher borrowing costs will be less money spent on producing oil and natural gas. Concho Resources Inc. said late Monday that it was cutting its capital spending budget by a third, to $2 billion.
* * *
And the credit market knows it...
And here is the bankruptcy filing in question in all its glory:
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