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RE: OPEC, for some quiet moments.. - admin - 03-11-2015

A high-ranking Saudi Aramco executive says the plunge in energy prices already has caused many in the industry to cut spending on oil and gas projects, and the trend probably will continue for a few years, perhaps reaching a cut of $1 trillion in investments.

Saudi Exec Expects $1 Trillion Drop In Energy Investments

Despite lower prices and dire news, particularly in the American oil markets, the fundamentals generally point to a flurry of need. If oil prices can merely get back to the $60-$70 a barrel range in the next 12 months, and stay there for a reasonable period of time, U.S. production is poised to respond. Certainly, many wells have shut down. Headcount has been reduced. But, the infrastructure is there to pick up the pace at a moment's notice. The recent volatility has created a much leaner breed of competitor. And from a logistics standpoint, a multitude of options have emerged – including rail, barge and tankers, to name a few – mostly over the past five years.

Oil Price Crash A Blessing In Disguise For US Shale

The Organization of Petroleum Exporting Countries won’t change policy at its next meeting unless other producers cut first, Qatar’s former energy minister said. OPEC is scheduled to next meet in Vienna in June, seven months after deciding to maintain output levels and protect market share. Production by non-OPEC members, such as Mexico, rose in February from the month before, U.S. output is forecast to be the highest in three decades and Russian supply climbed to a post-Soviet high in January.

OPEC seen by Attiyah keeping oil policy unless others cut output

The Energy Information Administration reduced its 2015 forecast for West Texas Intermediate oil prices as production is poised to rise further. The U.S. benchmark will average $52.15/bbl this year versus a February projection of $55.02, the EIA, the Energy Department’s statistical arm, said Tuesday in its monthly Short-Term Energy Outlook. Production will climb to 9.35 MMbopd in 2015, up 50,000 bopd from last month’s estimate.

U.S. cuts 2015 WTI forecast as oil production rises




RE: OPEC, for some quiet moments.. - admin - 03-12-2015

Chevron will increase asset sales by 50% to $15 billion and curtail new investment for the next two years after plunging oil prices squeezed cash flow for the second-biggest U.S. energy producer. Chevron’s divestment of oil and natural gas fields and other exploration and production assets will continue through 2017, said Chairman and CEO John Watson. Capital spending will decline through the period as construction of mega-projects such as the $54 billion Gorgon gas-export development in Australia winds down, he said.

Chevron accelerating asset sales to $15 billion on oil slide

A decision by Whiting Petroleum, the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50/bbl prices undercut companies with heavy debt and high costs.

Shale on sale as oil crash tilting seller markets to buyers

Annova LNG filed a request with the Federal Energy Regulatory Commission (FERC) Wednesday to initiate a review of the potential development of a mid-scale natural gas liquefaction and transfer facility at the Port of Brownsville, Texas. Exelon Generation is the majority owner of the Annova LNG Brownsville Project. "The U.S. offers some of the most competitive supplies of natural gas in the world, and this project provides Exelon an opportunity to continue the growth of our wholesale gas businesses," Ken Cornew, Exelon Generation’s president and CEO, said.

Exelon explores development of Texas LNG export terminal

Russia plans to maintain oil output at current levels for the next two decades, Energy Minister Alexander Novak said, shrugging off sanctions and the slump in crude prices. Production will remain at about 10.5 MMbopd until 2035, Novak said Wednesday at a conference in Moscow. Russia, which ranks with Saudi Arabia and the U.S. among the world’s biggest producers, pumped 10.7 MMbopd in January, a post-Soviet record.

Russia to keep oil output steady to 2035 despite price drop




RE: OPEC, for some quiet moments.. - admin - 03-13-2015

Europe’s largest oil companies are gaining support from an unlikely source as they confront the industry’s worst slump since the financial crisis: lower oil prices. Although better known for their oil fields, refineries, and petrol stations, BP Plc, Royal Dutch Shell Plc and Total SA are also the world’s biggest oil traders, handling enough crude and refined products every day to meet the consumption of Japan, India, Germany, France, Italy, Spain and the Netherlands. The trio’s sway in commodities trading, largely unknown outside the industry, is set to pay off in 2015 as the bear market allows traders to generate higher returns by storing cheap oil today to sell at higher prices later and using lower prices to make more bets with the same capital.

How Big Oil Is Profiting From the Slump - Yahoo Finance

We keep waiting for the bust, the gigantic rollover of oil companies that just plain collapse under their own weight and the $50 price that you get for West Texas Intermediate. It hasn't happened. We keep waiting for the junk bond market that is riddled with $200 billion in oil and gas paper to be crushed by defaults and restructurings. It hasn't been.

Jim Cramer: The Gigantic Oil Crash That Hasn't Occurred - TheStreet

Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday. The West's energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices.

IEA sees renewed pressure on oil prices as glut worsens | Reuters

Everything, so they say, is relative. Over the last two weeks, as WTI crude oil prices have turned tail and once again dived back below $50/Barrel, there has been much talk of an extension of the collapse, with oil moving even lower. When the most fundamental influence on the oil price, the strength of the U.S. Dollar, is taken into account, however, the fact that WTI is still holding above the base formed last month indicates quite the opposite.

Why Oil’s Recent Drop Indicates Strength, Not Weakness




RE: OPEC, for some quiet moments.. - admin - 03-14-2015

These four years of data represent the fastest expansion of oil production in U.S. history. New technology drove this boom—particularly the deployment of horizontal drilling through shale rock. The three biggest oil-producing shale regions are the Permian basin in West Texas, the Eagle Ford in Southern Texas, and the Bakken in North Dakota. Hover on the map for drilling history in each basin.

Watch Four Years of Oil Drilling Collapse in Seconds | Bloomberg Business - Business, Financial & Economic News, Stock Quotes

China and India are set to fill up their strategic petroleum reserves this year, taking advantage of lower oil prices, according to the International Energy Agency. The two nations are building emergency stockpiles with millions of barrels of crude that mirror the reserves of oil and refined products that the U.S. and its western allies amassed after the first oil crisis of 1973 to 1974.

IEA Sees China, India Filling Strategic Reserves With Cheap Oil - Bloomberg Business

Oil companies have proposed millions of dollars of cuts in development spending in Iraq, a senior oil ministry official said, after Baghdad told them low oil prices and its fight against Islamic State had made payments difficult.

EXCLUSIVE-Oil companies offer to cut 2015 spending in Iraq | Reuters

About a dozen U.S. drilling executives, including ConocoPhillips Chief Executive Officer Ryan Lance, were in Washington this week trying to persuade White House officials and lawmakers to lift the 40-year ban on U.S. oil exports, according to two people familiar with the meetings.

Oil CEOs Press Obama Administration to Lift Export Ban - Bloomberg Business

Having bottomed‐out in the second quarter of 2014, global oil demand growth has since steadily risen, with year‐on‐year gains estimated at around 0.9 million barrels per day (mb/d) for the final quarter of last year and 1.0 mb/d for the current quarter, the IEA Oil Market Report for March informed subscribers. The forecast of demand growth for all of 2015 was raised by 75 kb/d to 1.0 mb/d, bringing global demand to an average 93.5 mb/d.  Global supply rose by 1.3 mb/d year‐on‐year to an estimated 94 mb/d in February, led by a 1.4 mb/d gain in non‐OPEC output. Declines in the US rig count have yet to dent North American output growth. Final December and preliminary current-quarter data show higher‐than‐expected US crude supply, raising the 2015 North American outlook.

March:- IEA releases Oil Market Report for March




RE: OPEC, for some quiet moments.. - Kaliboo - 03-15-2015

Perhaps the well read, power posters on this board could share their views.  I would appreciate your views.

I'm seeing a confluence of events which could very soon lead to a perfect storm scenario limited to the USA IF Congress and the POTUS do not very quickly pass legislation to expand the right to export crude oil.  Some of these events are.

1.  US crude production is continuing to increase.

2.  Exporting of unprocessed or unrefined crude products is essentially banned in most cases, keeping most of the crude in the USA.

3.  Onshore storage capacity is about full.

4.  Many independents hedge their production 1-3 years out.  So that was done at much higher prices before the collapse and will take that long to unwind.  So at least that amount of volume will be producing no matter what the market price.

5. Much of the US production is light oil due to the advancement of shale drilling and horizontal wells.  However, US refineries were built to handle heavy crude which accounted for the majority of oil at that time.  So light crude  must compete for limited light crude refinery access if it can't be exported.

6.  Reportedly there are 3000 onshore wells that were drilled and cased, but not completed.  In most cases completing the well does not require a drilling rig to perforate and conduct up to ~30 separate frac treatments per well.  These wells may start off near 1000 BOPD and can be completed in ~a month.  Industry is continually advancing the performance of these wells so that initial rates are higher than e.g., 5 years ago, and decline rates are lower and recoveries are higher.  Nothing is stagnant in this business.  So projections or production capacity are easily under estimated by experts.

7.  Because of the longer field lives in deepwater (up to 50 years) these projects ignore these cycles and just keep moving forward as long as there is cash to invest.

One counter point is news of the US gov't buying 5 Mln BBls to refill the strategic petroleum reserve.  So that's ~1/2 day of US production.  No impact in my view.

Another counter point is that summer is approaching and consumption of fuel will pick up.  Strikes at oil refineries will end.  But reportedly these plants are already at the high end of their capacity.  So maybe not much more can be processed.

So in the very short term IF the Feds don't allow the crude oil to leave the country very soon, we could soon be drowning in it.  I can see domestic crude prices plummeting when there is no place to put it and a lack of customers to consume it.  And how will futures prices work?  IF there is no place to put these excess future deliveries and no one to sell it to, what will happen to those prices?  Could there be mass exodus and price collapse?  I.e., well under $30/bbl as is my current prediction since January?

The Feds say they are just now drafting legislation.  But what will POTUS do?  Part of me thinks his leftist thinking is to try and kill the domestic oil and gas industry, just as he helped do to the coal industry with his EPA executive orders helped of course by a slow steel industry (big met coal consumer) and lower cost competing, clean natural gas.  This would please many of his supporters and give him an opening to press harder for renewable energy.  The tradeoff here might collapse the economy but I don't think that concern would stop him as basded on his track record he seems to be heaviliy ideology driven to transform the nation into something else.




RE: OPEC, for some quiet moments.. - Thylacine-2 - 03-15-2015

I'm not a "power poster" and, although I read a lot, don't think of myself as being "well read", but it's Saturday morning, raining, and I've got the time, so I'll throw out a few opinions.

1. US production is continuing to increase because there is a lag between the decrease in rate of tight oil wells being drilled and the production rate. Since the number of wells being spudded has collapsed, production will turn around. IMO in a matter of weeks to a few months.

3. Onshore oil storage is not about full. That notion is being promoted by those trying to talk the price of oil down.

6. The 3000 wells drilled but not fracked includes some that will never be economic to frac, some that will be economic at much higher prices, and some which will be fracked "soon". Certainly no great rush to frac them now, at low oil prices. As prices recover, there may be a marginal effect by some of these wells coming into production.

Obama is not leftist. He is a completely reliable tool of the corporate state.


RE: OPEC, for some quiet moments.. - Putncalls - 03-15-2015

It will be a long time before Domestic oil production meets demand. In the interim the refineries can adjust. Some people refer to them as crackers (molecule crackers) because they can transform different hydrocarbons.

Maybe the US public will discover the insentious circus and media scam that brings the POTUS to puppet power while he plays the role of Marie Antoinette?


RE: OPEC, for some quiet moments.. - admin - 03-15-2015

["The Feds say they are just now drafting legislation.  But what will POTUS do?  Part of me thinks his leftist thinking is to try and kill the domestic oil and gas industry, just as he helped do to the coal industry with his EPA executive orders helped of course by a slow steel industry (big met coal consumer) and lower cost competing, clean natural gas.  This would please many of his supporters and give him an opening to press harder for renewable energy.  The tradeoff here might collapse the economy but I don't think that concern would stop him as basded on his track record he seems to be heaviliy ideology driven to transform the nation into something else."]

I understand the president is not universally popular, but to keep this forum free of politics, I suggest you take this part to a more appropriate forum (here), where people (perhaps even including me) could answer.

The increase in US oil production has caught many by surprise. There were good strategic reasons for not allowing crude export (as well as some economic reasons). To change this is a major strategic decision that has major ramifications, I think the quality of the decision is more important than the timing here as there are more implications than just trying to stem a falling oil price.




RE: OPEC, for some quiet moments.. - AU74 - 03-15-2015

(03-15-2015, 12:51 AM)Kaliboo Wrote:

Perhaps the well read, power posters on this board could share their views.  I would appreciate your views.

I'm seeing a confluence of events which could very soon lead to a perfect storm scenario limited to the USA IF Congress and the POTUS do not very quickly pass legislation to expand the right to export crude oil.  Some of these events are.

1.  US crude production is continuing to increase.

2.  Exporting of unprocessed or unrefined crude products is essentially banned in most cases, keeping most of the crude in the USA.

3.  Onshore storage capacity is about full.

4.  Many independents hedge their production 1-3 years out.  So that was done at much higher prices before the collapse and will take that long to unwind.  So at least that amount of volume will be producing no matter what the market price.

5. Much of the US production is light oil due to the advancement of shale drilling and horizontal wells.  However, US refineries were built to handle heavy crude which accounted for the majority of oil at that time.  So light crude  must compete for limited light crude refinery access if it can't be exported.

6.  Reportedly there are 3000 onshore wells that were drilled and cased, but not completed.  In most cases completing the well does not require a drilling rig to perforate and conduct up to ~30 separate frac treatments per well.  These wells may start off near 1000 BOPD and can be completed in ~a month.  Industry is continually advancing the performance of these wells so that initial rates are higher than e.g., 5 years ago, and decline rates are lower and recoveries are higher.  Nothing is stagnant in this business.  So projections or production capacity are easily under estimated by experts.

7.  Because of the longer field lives in deepwater (up to 50 years) these projects ignore these cycles and just keep moving forward as long as there is cash to invest.

One counter point is news of the US gov't buying 5 Mln BBls to refill the strategic petroleum reserve.  So that's ~1/2 day of US production.  No impact in my view.

Another counter point is that summer is approaching and consumption of fuel will pick up.  Strikes at oil refineries will end.  But reportedly these plants are already at the high end of their capacity.  So maybe not much more can be processed.

So in the very short term IF the Feds don't allow the crude oil to leave the country very soon, we could soon be drowning in it.  I can see domestic crude prices plummeting when there is no place to put it and a lack of customers to consume it.  And how will futures prices work?  IF there is no place to put these excess future deliveries and no one to sell it to, what will happen to those prices?  Could there be mass exodus and price collapse?  I.e., well under $30/bbl as is my current prediction since January?

The Feds say they are just now drafting legislation.  But what will POTUS do?  Part of me thinks his leftist thinking is to try and kill the domestic oil and gas industry, just as he helped do to the coal industry with his EPA executive orders helped of course by a slow steel industry (big met coal consumer) and lower cost competing, clean natural gas.  This would please many of his supporters and give him an opening to press harder for renewable energy.  The tradeoff here might collapse the economy but I don't think that concern would stop him as basded on his track record he seems to be heaviliy ideology driven to transform the nation into something else.



Would appreciate if you could keep your ODS garbage off this board. Thanks.


RE: OPEC, for some quiet moments.. - jft310 - 03-15-2015

Harold Hamm CEO of Continental Resources , large Balkean fracer , states the wells that have been drilled and are being drilled are not being completed . Those wells he says will not be completed until oil prices recover to $60-65 a barrel . So there is no massive new U.S. supply coming but there are headwinds .In fact a well that's been fracted losses up to 70 percent of it's production in the first year . He further states summer drive time will start the price recovery as refineries start switching over to summer blends and the US economy is recovering so demand is rising .
Harold was on CNBC last week with an interview .
He must be in a position to have a better feel than most for the current US situation.
The Billions bet on oil futures still shows an upward price curve over time .