Oil Warning: The Crash Could Be the Worst in More Than 45 Year
by Tom Randall
July 23, 2015 — 6:00 AM EDT
Morgan Stanley has been pretty pessimistic about oil prices in 2015, drawing comparisons with the some of the worst oil slumps of the past three decades. The current downturn could even rival the iconic price crash of 1986, analysts had warned—but definitely no worse.
This week, a revision: It could be much worse.
Until recently, confidence in a strong recovery for oil prices—and oil companies—had been pretty high, wrote such analysts as Martijn Rats and Haythem Rashed in a report to investors yesterday. That confidence was based on four premises, they said, and only three have proven true.
1. Demand will rise: Check
In theory: The crash in prices that started a year ago should stimulate demand. Cheap oil means cheaper manufacturing, cheaper shipping, more summer road trips.
In practice: Despite a softening Chinese economy, global demand has indeed surged by about 1.6 million barrels a day over last year's average, according to the report.
2. Spending on new oil will fall: Check
In theory: Lower oil prices should force energy companies to cut spending on new oil supplies, and the cost of drilling and pumping should decline.
In practice: Sure enough, since October the number of rigs actively drilling for new oil around the world has declined about 42 percent. More than 70,000 oil workers have lost their jobs globally, and in 2015 alone, listed oil companies have cut about $129 billion in capital expenditures.
3. Stock prices remain low: Check
In theory: While oil markets rebalance themselves, stock prices of oil companies should remain cheap, setting the stage for a strong rebound.
In practice: Yep. The oil majors are trading near 35-year lows, using two different methods of valuation.
4. Oil supply will drop: Uh-oh
In theory: With strong demand for oil and less money for drilling and exploration, the global oil glut should diminish. Let the recovery commence.
In practice: The opposite has happened. While U.S. production has leveled off since June, OPEC has taken up the role of market spoiler.
more...
http://www.bloomberg.com/news/articles/2015-07-23/oil-warning-crash-could-be-worst-in-more-than-45-years
= new reply since forum marked as read
I got a quote to insulate a small crawl-space section of my roof at $3000 from a bare-faced liar. Decided to do it myself. Was looking at videos on it and it looked like doing it with insulation board would be significantly easier. Headed up to the attic to review the area and guesstimate how many boards I'd need, since I hadn't crawled into the space since the insulation liar had been there lying about it to me last winter.
Realized I could make an insulation "insert" door similar to the interior storm window inserts for <$100.00. 
That will be more effective than insulating the roof, about a million times easier and leaves me 2,900 to spend on other energy saving improvements. 
By the time the oil price "recovery" comes, I'll be using a hell of a lot less of it. If I sell this place, I'll be down to practically zero.
