She'll be right mate. :) After this temporary scare, I say...

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buc

8,595 Posts.

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15/01/15

16:36

Post #: 14590015
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Originally posted by dougfr ↑

"Downey said the recent surge in demand is unusual because oil has a low price elasticity of demand, meaning that demand is not very sensitive to changes in price."

I understand that the normal laws of supply and demand do not apply to oil. Consumers do not stop purchasing fuel merely because the price goes up, unlike most other commodities . However, the price of oil can increase if demand continues to increase and demand does not necessarily increase just because the price goes down. Therein lies the anomaly.

If demand continues to rise then it is obvious that the price must rise. It is just a matter of when. The question is how many small operators will go to the wall waiting for it to happen. It will be the survival of the strongest - those with manageable or no debt, manageable operating and administrative expenses, strong cash flow and competent management will survive. Those who don't have all of these attributes won't survive. Where does SSN sit?

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She'll be right mate.

After this temporary scare, I say temporary because as you said, if demand continues to rise the oil price should follow. The US oil industry as a whole, including SSN, will be more cost efficient, more productive, more competitive, meaner and leaner, imo.

Last edited by buc: 15/01/15

AKK Price at posting: 4.4¢ Sentiment: None Disclosure: Not Held

SEA Price at posting: 47.5¢ Sentiment: None Disclosure: Not Held

LNR Price at posting: 18.0¢ Sentiment: None Disclosure: Not Held

SSN Price at posting: 1.0¢ Sentiment: Buy Disclosure: Held
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