Replies to post #3581 on National Energy Services Inc. (fka NESV)

[integral]

This has nothing to do with Putin:

Jonathan Ratner, Financial Post · Oct. 16, 2014 | Last Updated: Oct. 16, 2014 11:00 AM ET

A massive selloff in energy stocks followed Saudi Arabia’s recent indication that it is comfortable with a lower oil price than the market thought.

Previous market views held that Saudi Arabia needed Brent oil prices around US$100 per barrel to adequately budget for social spending to avoid Arab Spring-like unrest. But Saudi Arabia said it is fine with a price of US$80 to protect market share.

Canaccord Genuity analyst Karl Chalabala shares the market’s view that Saudi Arabia wants to pressure U.S. shale producers that have higher break-even costs out of business.

Mr. Chalabala suggested Monday’s declines almost amounted to a “Black Monday” type of event for U.S. exploration and production companies.

Oil-weighted names with over-levered balance sheets were hit the hardest, particularly those in early stage plays such as the Tuscaloosa Marine Shale, as well as small caps in general.

The analyst noted that the relative strength index on the U.S. producer indexes — the SPDR S&P Oil & Gas E&P ETF and the SIG Oil Exploration & Production Index — has hit oversold levels that are comparable or worse than those during the financial crisis.

“This created a perfect storm as I believe long-onlys stropped supporting E&P names into year-end, leading to a hedge fund-driven market,” Mr. Chalabala said in a research note.

He pointed out that the U.S. Securities and Exchange Commission responded with an unprecedented move by enforcing 20 short-sale rules on names such as Goodrich Petroleum Corp., SM Energy Co. and Laredo Petroleum Inc.

“Our coverage names got thrown out as well on the Saudi news, which does not make fundamental sense on a commodity basis,” the analyst said, noting that the natural gas price strip (the average price for the next 12 months) barely moved and is heading into its strongest seasonal period.

“The Saudis position on oil means literally nothing to the majority of my names on a fundamental basis,” he added. “Until LNG exports kick in (mid-2015), local pricing dynamics are the governor.”

[integral]

NEW YORK, Oct 13 (Reuters) - Brent oil prices fell on Monday, tumbling more than $2 a barrel intraday to their lowest since 2010, after key Middle East producers signaled they would keep output high even if that meant lower prices.

Brent oil prices have tanked by nearly 25 percent since June as ample supply coincided with weak demand, raising the possibility that the Organization of the Petroleum Exporting Countries (OPEC) could cut output.

But Saudi Arabia has privately told oil market participants it can accept oil prices between $80 and $90 a barrel, sources briefed by OPEC's biggest producer told Reuters.

Kuwait's oil minister said OPEC was unlikely to cut production to support prices. OPEC ministers will meet to discuss output policy Nov. 27.

"It suggests there's some nervousness in the market that Saudis are seeking to bring pressure on the shale producers in the U.S.," said Gene McGillian, an analyst at Tradition Energy.

"The market is in search of a bottom and we're in the process of finding it, we just have to see what OPEC does and where the economy goes," McGillian said.

Brent November crude fell $1.32 to settle at $88.89 a barrel, having slumped to $87.74, the lowest front-month price since December 2010. The intraday low was a contract low ahead of its expiration on Thursday.

U.S. crude fell 8 cents to settle at $85.74 a barrel, having recovered from an intraday low of $84.07.

The spread between the two grades narrowed, falling to less than $3 after regular trading, the lowest since Oct. 7. One trader said the gap had narrowed because of profit taking on the spread, while a second trader said it was due to global growth. Both struggled to identify why the spread had narrowed late Monday.

The narrower losses were a result of the market "taking a breather" from the rally, said John Saucer, vice president of research and analysis at Mobius Risk Group. "In the near term, I think we need to see some consolidation, some backing and filling," he said. The market may be locked in a holding pattern until the IEA numbers, which are due out early Tuesday.

Growth in China's exports and imports trumped forecasts in September, and the world's largest energy consumer increased crude oil imports by 9.5 percent from August, lending limited support to prices.

Consuming countries like China and India often build up stockpiles when prices are low.

Oil prices could be on the brink of sliding another $10 or more, some analysts said.

Iraq cut its November oil prices for customers in Asia and Europe on Sunday, following a similar move by Saudi Arabia last week.

Kuwait's oil minister, Ali al-Omair, was quoted as saying by state news agency KUNA on Sunday that $76 to $77 a barrel might be the level that would end the oil price slide, since that was the cost of oil production in the United States and Russia.

(Additional reporting by Robert Gibbons in New York, Sam Wilkin in London and Meeyoung Cho and Florence Tan in Singapore; Editing by Christopher Johnson, Andrew Hay and Meredith Mazzilli)

[integral]

This is a personal vendetta by certain oil producing countries against US production.

It is already squeezing E&P corps domestically. The AFE's have to be cut, and one place is oil service.

NASV with a horrendous upside down, inverted quick is very suspect right now.

NASV cannot control an AFE by an operator and its WI partners. All NASV can do is bid and compete and hope it can out last this game. Healthy service corps have a better chance of survival. Banks don't fool around with delinquent debtors.