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RE: OPEC, for some quiet moments.. - admin - 06-02-2015

'Thylacine-2' pid='58628' datel Wrote:Folks in the business in Texas and ND would disagree that a "dramatic retreat" in shale oil is not occurring. As for current production....the decline in production due to the decline in drilling is starting to show up now. There is the lag from drilling rate to production rate.

Yes, existing wells have decline rates, with shale these are often in the order of 70% in the first year. If you drill a whole lot less new wells, production is sooner or later going to be affected.




RE: OPEC, for some quiet moments.. - ArtM72 - 06-02-2015

(06-02-2015, 12:22 AM)Putncalls Wrote:

(06-02-2015, 12:04 AM)Thylacine-2 Wrote: I'm wondering if US LNG is even a good investment. It's the hottest thing right now. There are lots of companies clamoring to get into the business and the eagerness must be based on analysis. But how can building 20 billion dollar plants be justified when the cost of the gas isn't determined?

I don't think it's hot any more. With 3$ US NG, US LNG bereakeven is over 8 bucks in Asia according to this 2013 Bloomberg article.

http://www.bloomberg.com/news/articles/2013-01-11/u-s-lng-profit-seen-elusive-as-price-gap-closes-energy-markets ;

Yeah.  That Bloomberg article also said Cherniere's project only cost $5Billion when the cost of the first phase is over $12B (http://www.bloomberg.com/bw/articles/2014-11-06/u-dot-s-dot-natural-gas-exports-will-fire-up-in-2015) That figure might not even include the $2 billion head start they had with their unfortunate LNG regassification plant on the same location.

It seems so many people are writing about this stuff you can pick and choose citations to justify almost any position you want to take on the future of LNG.  <img src=" border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/blush.gif" />




RE: OPEC, for some quiet moments.. - admin - 06-02-2015

A sudden surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks through May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts say about 20 million barrels is being stored on ships in another indication the glut has yet to dissipate.

The Tanker Market Is Sending a Big Warning to Oil Bulls - Bloomberg Business

Analysts say spot or short-term deals already account for 30-35 per cent of the overall market, though this includes any deals with a duration of less than four years — illustrating how focused the LNG market has been on longer-term deals over its 51-year history. Even though producers need to lock-in contracts to fund the construction of multibillion-dollar liquefaction and loading terminals, consumers’ appetite for oil-linked contracts has fallen even after the near halving in crude prices since last summer.

LNG trade prepares to come out of oil’s shadow - FT.com

OPEC will maintain its production target next week, Libya’s deputy vice prime minister for energy said, joining Kuwait in predicting no policy change when oil ministers from the 12-member group meet in Vienna. The output target will remain 30 MMbopd, Mohammad Oun, Libya’s deputy vice prime minister for energy, said by phone Thursday from al-Bayda, eastern Libya. Oun will be part of Libya’s delegation to the June 5 meeting. OPEC is working on a long-term strategy draft to present next week that is likely to show projections of crude supply from non-OPEC producers are the same as those forecast in 2014, he said.

Libya seconds OPEC output target as ministers head to Vienna

Brent oil snapped a two-day advance as Saudi Arabia maintained crude output at a record in May before OPEC meets this week to discuss its production policy. Futures slid as much as 0.8% in London after rising 4.8% on Friday. Saudi Arabia pumped 10.25 MMbopd, unchanged from April and the most in a monthly Bloomberg survey going back to 1989. The Organization of Petroleum Exporting Countries will probably maintain its collective quota at 30 MMbopd when it meets June 5 in Vienna, according to a separate survey last month.

Oil halts advance as Saudis pump at record before OPEC meeting




RE: OPEC, for some quiet moments.. - admin - 06-03-2015

At the height of the U.S. energy boom, Texas landowner John Baen received about $100,000 a month in royalty payments from companies producing oil and natural gas on his property. Now the checks are much smaller, and when he opens his mailbox each day, he’s afraid he’ll find yet another bankruptcy notice. So far, four of the producers sending him checks have caved in to rising debts as oil prices slumped, seeking court protection from their creditors.

‘Shale-ionaires’ suffering from wave of bankrupt oil drillers

The heads of Europe’s largest oil and gas companies joined together for the first time to call for governments to agree on carbon pricing at a UN climate summit, opening a schism with their American rivals. “It’s clear that the subject isn’t viewed in the same way on both sides of the Atlantic,” Total Chief Executive Officer Patrick Pouyanne, one of the signatories, said at a press conference in Paris. “We are working with those who come forward.”

European big oil opens schism on climate policy with U.S. rivals

Dan K. Eberhart, the CEO of Canary, LLC, the largest privately held oilfield services company in the U.S., has announced a U.S. shale energy recovery and a turning point in shale's role to help stabilize world oil prices. "Energy economic indicators are positive," Eberhart said.  "Not only have Brent prices increased about 40% from last year's lows, but recent rig counts have also shown a significant ‘flattening’ of the downward count. In horizontal oil rig activity, we're seeing an uptick to positive activity after the six-month fall the industry took when oil prices crashed."

Canary CEO predicts shale recovery as rig count stabilizes

From Canada to Qatar and the Barents Sea to the Gulf of Mexico, energy companies are shelving or delaying projects following crude’s collapse. Some of the world’s biggest explorers have cut capital budgets from last year by as much as a third. In the U.S., the number of rigs drilling for oil plunged 60 percent since October to the lowest in almost five years. U.S. shale production started falling in May and the government expects the decline to continue.

OPEC Is Winning the Oil War - Yahoo Finance




RE: OPEC, for some quiet moments.. - admin - 06-04-2015

Today, about 100 public firms and many more private ones are shaping the North American shale industry, raising the risk that hundreds of rigs might quickly reenter service, even if individual companies tread lightly.

The U.S. oil fracker's dilemma: crouch or pounce? | Reuters

But helping to underpin the shale firms' measured optimism about adding rigs are costs that have fallen 15-25 percent and continued productivity gains for new wells. Break-even levels for most shale fields have already inched down since the price crash started. Wood Mackenzie sees them falling on average by $10-15 a barrel through mid-2016, with bigger savings accruing in the most productive spots.

The U.S. oil fracker's dilemma: crouch or pounce? | Reuters

The U.S. oil market is on the brink of returning to a more bullish footing known as backwardation for the first time in six months, with the discount for prompt supplies vanishing as a domestic supply glut eases. The discount for prompt U.S. oil futures versus the second-month contract - a structure known as "contango" that signals a weak market - narrowed to its smallest in five months on Friday as strong demand and flattening production added to expectations that domestic stockpiles will continue to fall over the summer.

U.S. oil contango vanishing as supply glut shifts abroad | Reuters

This week starts with a refreshing call by Deutsche Bank (DB), which basically encapsulates my view on the E&P group. Notwithstanding the valuation issues in the group that remain significant, there continues to be ample evidence that $55 oil does not support production increases in either 2015 or 2016 for that matter.

US Shale Will Not Bounce Back At Current Prices | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 06-05-2015

Saudi Arabia’s oil minister said the kingdom’s efforts to focus on market share are working just days before OPEC meets to discuss production. “The answer is yes,” Ali al-Naimi said Monday upon arriving in Vienna for this week’s OPEC meeting, after being asked whether the Saudi strategy was working.

Saudi oil market share strategy is working, Al-Naimi says

Gazprom Neft, the oil arm of Russia’s state-run gas exporter, said commercial production from its Bazhenov shale formations could start in three years amid U.S. sanctions limiting the transfer of fracing technology. The company aims to produce about 40,000 bopd from the deposits from 2018, Kirill Strizhnev, head of unconventional projects for Gazprom Neft, told reporters in Moscow. That’s about 2.7% of Gazprom Neft’s daily first- quarter output of 1.5 MMboed.

Gazprom pursues production from Bazhenov shale amid U.S. sanctions

Russian oil output neared a record in May, damping speculation before OPEC meets this week that major producers may cooperate to curb a global supply glut. Production of oil and natural-gas condensate climbed 1.6% from a year earlier to 10.708 MMbpd, close to January’s post-Soviet record of 10.713 MMbpd, according to preliminary data from the Energy Ministry’s CDU-TEK unit.

Russia producing oil near record swells global glut before OPEC meeting

Low prices and plummeting rig counts have prompted a gusher of headlines claiming that the shale oil revolution, which by early this year boosted American oil production to nearly 10 million barrels a day, is grinding to a halt. The doomsayers, however, are missing a key parallel trend: lower prices are prompting unprecedented innovation in the oil fields, increasing production per well and slashing costs.

Data Analytics Are Leading to a “Shale 2.0” Revolution | MIT Technology Review




RE: OPEC, for some quiet moments.. - admin - 06-07-2015

When OPEC started a price war last November, driving oil down to its current $65 a barrel, U.S. shale drillers looked doomed. Six months later, it’s the world’s largest oil companies that are emerging as the unexpected casualties.

OPEC Shale War Leaves Big Oil Companies as Surprise Victims - Bloomberg Business

OPEC is set to carry on pumping oil nearly flat-out for months more, content that last year's shock market therapy has revived demand and knocked back growing competition. With oil prices having stabilised at around $65 a barrel, some $20 above their January lows, there's little appetite within the Organization of the Petroleum Exporting Countries to modify production limits or address Iran's request to give it more room in the market as sanctions ease.

OPEC set to hold line on output, setting aside Iran dilemma | Reuters

Nearly a year after oil markets entered a deep downward spiral, unmoored from the $100-a-barrel mark that had anchored them for years, some OPEC members are publicly talking for the first time about a new "fair" price for their crude. Oil ministers from Iraq, Venezuela and Angola said in Vienna this week that a price of $75 or $80 a barrel - barely $10 above the going rate - could be just fine. Iraq's Adel Abdel Mahdi said it would be "equitable".

OPEC moots $80 as new 'fair' oil price - but will it stick? | Reuters

Oilman T. Boone Pickens said Thursday that Saudi production is topping out at about 10 million barrels per day and oil prices will return to $70 per barrel by the end of the year. OPEC is "all in at 31 million barrels a day. That's about all they can do,"

Pickens: Saudis bluffing on oil production - Yahoo Finance




RE: OPEC, for some quiet moments.. - admin - 06-08-2015

Exxon Mobil CEO Rex Tillerson said Europe should see the “tremendous environmental benefits” of producing natural gas from shale, pointing to the U.S. output boom as a model for cutting greenhouse-gas emissions.

Exxon CEO says Europe should see climate benefits of shale gas

Low oil prices in December had little impact on 2014 reporting of US oil and gas industry spending, reserves and revenues, according to EY’s eighth annual U.S. oil and gas reserves study. In contrast to 2013, total capital expenditures for the companies studied increased 16% to $200.2 billion in 2014. Likewise, revenues rose 10% while end-of-year oil and gas reserves grew 8 and 7 percent respectively.

E&Y: U.S. oil and gas capex, revenues and reserves continued to soar in 2014

Strong U.S. production, he notes, is due in part to frackers focusing on their most productive wells and ignoring the less productive. “There are a lot of companies that should be going out of business,” he believes. “They’re not making much money in terms of free cash flow...they should be going by the wayside and production as a result should slow. It’s not happening because Wall Street has raised all this money...to invest in energy. It’s the hottest trade now on Wall Street. As a result there are these kind of zombie fracking companies that should go under but they’re not going to go under.”

OPEC: The impact of the semi-annual meeting at home and abroad - Yahoo Finance

When Ryan Lance, CEO of ConocoPhillips, told an OPEC conference in 2012 the industry was under-estimating shale, oil was trading near $100/bbl and his warning fell on deaf ears. Two years and a price crash later, Lance returned to the same forum on Thursday and had no problem winning the attention of officials and executives. Shale oil “is here to stay,” Lance said, speaking over a chart showing the almost vertical rise in U.S. shale output.

Shale’s resilience vindicates Conoco CEO on return to OPEC




RE: OPEC, for some quiet moments.. - admin - 06-08-2015

Hydraulic fracturing has contaminated some drinking wells but the impact is not widespread, according to a landmark U.S. study of water pollution risks that has both foes and supporters of the drilling method declaring victory.

EPA Study of Fracking Finds 'No Widespread, Systemic' Pollution - Bloomberg Business

For a nation that bans most oil exports, the U.S. still finds a way to ship more abroad than at least two OPEC members. The shale oil-rich nation exported more than half a million barrels a day in April, the most since at least 1920, and more than Libya or Ecuador shipped in the same month. OPEC ministers are meeting this week to decide a response to the global oversupply just as Iraq signals it will boost overseas deliveries and Iran urges the group to make room for more output if global sanctions against the Persian Gulf state ease.

U.S. oil exports add to global glut as OPEC resists cuts

Who ever said there wouldn’t be any news coming out of the OPEC meeting in Vienna this week? In a surprise announcement, Indonesia has decided to officially pursue full membership in the oil cartel. Indonesia is no stranger to OPEC. It used to be a member, but left six years ago. Now it hopes to rejoin by the time the group meets again in November 2015.

This Country Wants To Rejoin OPEC As Soon As Possible | OilPrice.com

Crude oil options sank at the fastest pace in years on Friday after OPEC decided to keep pumping crude at record rates, prompting traders to unwind bets they had placed ahead of the group's meeting to protect against possible wild fluctuations in futures prices. The CBOE crude oil volatility index, a measure of options prices, plunged as much as 13 percent to 33 points, the largest one-day drop since 2011. That's down from a four-year high of 64 in February.

Post OPEC decision, traders rush to dump options positions




RE: OPEC, for some quiet moments.. - admin - 06-09-2015

In fact, some observers expect a second wave of technological innovation in shale oil production that will equal or surpass the first one, which was based on horizontal drilling and hydraulic fracturing, or fracking. Fueled by rapid advances in data analytics—aka big data—this new wave promises to usher in a second American oil renaissance: “Shale 2.0,” according to a May 2015 report by Mark Mills, a senior fellow at the Manhattan Institute, a free-market think tank.

Data Analytics Are Leading to a “Shale 2.0” Revolution | MIT Technology Review

A draft report by the Environmental Protection Agency (EPA) confirms that hydraulic fracturing has not led to widespread, systemic impacts on drinking water resources thanks to the safety and effectiveness of state and federal regulations, and current industry practices. “After more than five years and millions of dollars, the evidence gathered by EPA confirms what the agency has already acknowledged and what the oil and gas industry has known,” said API Upstream Group Director Erik Milito. “Hydraulic fracturing is being done safely under the strong environmental stewardship of state regulators and industry best practices.”

EPA hydraulic fracturing review confirms safety

“I have been in OPEC for some many years, and it is the first time I had seen this,” OPEC Secretary-General Abdalla El-Badri said after the meeting. “Very, very positive.” Last November, when the Organization of Petroleum Exporting Countries introduced its strategy of maintaining production to take market share from higher-cost producers, the group’s weaker members like Venezuela argued for a cut to boost prices. This time, even they were supportive amid signs the strategy is working.

OPEC Ministers Find Key to Happy Union as Iran Met With Silence - Bloomberg Business

Recent and compounding data will soon wash away the walls of worry erected by the experts. Four consecutive weeks of inventory draws, each one larger than the last is irrefutable proof that a 60% decline in the rig count means something.

Forget the noise: Oil prices won't crash again