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Oil prices.. how low can it go?
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maina20
#1 Posted : Monday, January 18, 2016 11:22:54 AM
Rank: Member

Joined: 7/21/2010
Posts: 249
Location: nairobi
Oil price falls below $28 a barrel as Iran sanctions lifted http://www.bbc.com/news/business-35340893
..desire to succeed is always fighting with fear of failure..
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VituVingiSana
#2 Posted : Monday, January 18, 2016 11:51:35 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
Good. KK will benefit.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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enyands
#3 Posted : Monday, January 18, 2016 12:40:37 PM
Rank: Elder

Joined: 12/25/2014
Posts: 2,301
Location: kenya
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
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VituVingiSana
#4 Posted : Monday, January 18, 2016 1:29:00 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
enyands wrote:
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking.

Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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maina20
#5 Posted : Monday, January 18, 2016 2:27:14 PM
Rank: Member

Joined: 7/21/2010
Posts: 249
Location: nairobi
VituVingiSana wrote:
enyands wrote:
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking.

Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits.

its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term...
..desire to succeed is always fighting with fear of failure..
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enyands
#6 Posted : Monday, January 18, 2016 2:32:34 PM
Rank: Elder

Joined: 12/25/2014
Posts: 2,301
Location: kenya
maina20 wrote:
VituVingiSana wrote:
enyands wrote:
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking.

Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits.

its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term...


To whom have you left "hedging" to sir maina20,and if they canceled it then the price for termination of contract is another cost. Beat that in mind
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maina20
#7 Posted : Monday, January 18, 2016 2:55:20 PM
Rank: Member

Joined: 7/21/2010
Posts: 249
Location: nairobi
enyands wrote:
maina20 wrote:
VituVingiSana wrote:
enyands wrote:
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking.

Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits.

its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term...


To whom have you left "hedging" to sir maina20,and if they canceled it then the price for termination of contract is another cost. Beat that in mind

.. very true..Hedging will make the banks happy at expense of the hedging firm. The effect of currency hedging will however be less severe than oil/burrel hedging since local currency have not been so volatile against the Dolar...
..desire to succeed is always fighting with fear of failure..
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VituVingiSana
#8 Posted : Monday, January 18, 2016 3:16:32 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
maina20 wrote:
VituVingiSana wrote:
enyands wrote:
VituVingiSana wrote:
Good. KK will benefit.



Na sidi wanjiku bei ya matatu itapungua? Never seen makanga wakipunguza instead once up it doesn't go down
Same here. Matatus, cabs and buses. It's called stickiness. Now if you ask a taxi to reduce prices coz fuel is cheaper they have other excuses. One day I was pissed off & called Uber in front of him. Nice, clean cab with pricing that is (sort of) pre-determined. The local taxis will probably stick with the fare you agree on whereas Uber charges based on time & distance BUT I have often had LOWER prices than I though I would. And the taxis are clean and feel safer since you have a name, phone number, car registration and Uber tracking.

Back to KK. Lower fuel prices mean more people travel = increased volume sales = higher profits.

its also good news to KQ, lower fuel costs can accelerate turn round. investors in transport will make a kill at the expense of end users...at short term...

KK does not hedge [after the 3rd degree burns in 2011-12] & so benefits from the drop in prices. Ask @obiero about hedges for KQ but his bosom buddy loves hedges [& kickbacks]. If those hedges are at prices higher than $30 for the foreseeable future, kuna noma.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Kusadikika
#9 Posted : Monday, January 18, 2016 3:32:49 PM
Rank: Elder

Joined: 7/22/2008
Posts: 2,721
Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:

USA-36$
Canada-41$
Brazil-49$
UK-52$

And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$.
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mibbz
#10 Posted : Monday, January 18, 2016 4:01:19 PM
Rank: Member

Joined: 2/18/2011
Posts: 448
Kusadikika wrote:
Won't stay low for too long. Only Saudi Arabia and Kuwait can produce a barrel for less than $10. Another low cost producer is Iraq at $10.70. All other producers need higher prices to survive:

USA-36$
Canada-41$
Brazil-49$
UK-52$

And even the low cost producers need higher prices to fund their budgets. Saudi Arabia, Oman and Bahrain would run out of money in 5 years if prices remain under 50$. I would give it a year at most before prices are back up, at least above 55$.



When you factor in Irans entry into the international oil market you'll see why markets are jittery. Iran claims cost of extraction in it's central oil fields to be $1-$1.5 per barrel with total production cost averaging $5 with the costliest production resulting in about $10 a day.

They are planning on pumping 500K bpd in the short term with a projected increase in the coming years.

OPEC led by Saudi Arabia is not keen on tightening it's supply. I for-see a situation of below $50 2-4 years if all factors remain as stated above.

In the short term,only two occurances can sharply increase the price: A geo-political dispute/war in the oil producing regions or OPEC reducing supply.
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