A consortium of US oil companies basically will have access to the Saudi Arabia of oil without major exploration spending. XOM made a new 52 week high oil in the 50s and trading a PE well above its historical average. US oil majors going to catch a huge bid.

Calling it "the Saudi Arabia of oil" is awfully generous.

This is largely overstated for Venezuela.

While you are probably right on their reserves being overestimated, there could also be a chance that these are underestimated, especially if you have more advanced and efficient (US) companies operating.

The gulf should benefit largely from this, right? The type of equipment you need to process their oil, isn't it pretty expensive, with only a few existing American refineries capable, mostly in the gulf? From what I've read, those refineries are already at capacity. But the oil is rich in ingredients that make a lot of high profit byproducts. Someone correct me if I'm wrong.

My thinking is, let the dust settle, then short the **** out of Canadian oil. Bye bye crap Canadian oil.

txaggie_08 said:

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Does that include all our federal leases and Alaskan and offshore that are currently off limits?

Heineken-Ashi said:

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The gulf should benefit largely from this, right? The type of equipment you need to process their oil, isn't it pretty expensive, with only a few existing American refineries capable, mostly in the gulf? From what I've read, those refineries are already at capacity. But the oil is rich in ingredients that make a lot of high profit byproducts. Someone correct me if I'm wrong.

My thinking is, let the dust settle, then short the **** out of Canadian oil. Bye bye crap Canadian oil.

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Certain refineries / operators in the GC should benefit. Operators like Valero which have refineries that are capable of refining VZ heavy, sour crude - not all of the GC refineries are capable of doing so. Increase in the supply of VZ heavy, sour crude -> decrease in the input price (feedstock) for these refinery operators -> increase in margins if demand remains stable.

As of this post, WTI trading pretty dang green. Plenty of chop will make it's way in one way or the other (as always), but it should speak to the perceived downside risk to oil that was en vogue in regards to VZ over the weekend.

Until VZ production increases, a conversion of sanctioned (heavily discounted) barrels to normal barrels should make oil prices go up.

There are so many hoops to be jumped through and stars aligned in order to repair/update Venezuela's infrastructure and boost production, and that is assuming we are working with an amicable government there.

Hoping for it as it would be good for Texas in numerous ways aside from further depressing prices, but I'm not optimistic this early.