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Rig counts are going down down down (oil production is following, if slowly for now), every business involved is gushing money like it's blood in a splatter movie because everyone loaned way more money than they'll ever get out of the ground, 30 oil/shale related companies in the US have gone into bankruptcy in the past year and (well paid) jobs are burning by the thousands and everyone is pumping the "good spots" dry as fast as they can to pay off their massive interest costs. And Iran haven't even really entered the picture. Enjoy the low prices while they last, $200/barrel here we come 
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Jan 12, 2016 16:57
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| # ¿ May 22, 2024 12:21 |
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Conventional oil peaked in 2005 or something, and outside of america world "total liquid" oil production (includes biofuel and natural gas liquids) has been pretty much flat since then (a little up in a few countries) according to the EIA. QE probably helped boost oil production quite a bit in the US, cheap loans -> overinvestment -> *QE stops* *China poops everywhere* *Wobble Wobble* -> crashing commodity prices -> lots of bankruptcies and underinvestment -> ???
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Jan 21, 2016 16:50
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KaptainKrunk posted:It'll take a couple of years to eat through the oversupply. The U.S. tight oil industry is hosed for the next decade though. The curve / timing can be deceptive, hedges and already drilled wells extended production well through 2015, and there's still some hedges that haven't run out yet (most run out this spring from what I've gathered), so it's not easy to draw any conclusions on how it will look going forward. We do know that discoveries and new projects are way below where they need to be for a stable/gentle curve development.
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Jan 21, 2016 17:56
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There's a nice graph out there over the increasing amount of oil going to internal consumption in Saudiland etc, more than negating any increase in production.
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Jan 22, 2016 09:35
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Rig counts are ticking down again, although Canadas is in some sort of jojo loop where +/-80 at a week are not uncommon. I'm not too read up on why that is a thing, but perhaps fewer players/winter weather?quote:The number of rigs drilling for oil in the U.S. dipped by five from last week down to 510 rigs, while the rigs seeking gas dropped by eight down to only 127 rigs. The oil rig count is now down more than 68 percent from its peak of 1,609 in October 2014 before oil prices began plummeting.
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Jan 23, 2016 11:29
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http://www.bidnessetc.com/63092-2016-more-bankruptcies-and-capital-expenditure-cuts-to-follow/ posted:Oil Sector Bankruptcies http://uk.businessinsider.com/oil-prices-and-debt-2016-2?r=US&IR=T posted:A recent report out from Jaime Caruana at the Bank for International Settlements looked at the relationship between debt and oil companies, finding that oil and gas company bonds outstanding rose from $455 billion in 2006 to $1.4 trillion in 2014 while syndicated loans to the sector increased from $600 billion to $1.6 trillion over the same period. Meanwhile in  -land:http://www.bloomberg.com/news/articles/2016-02-08/world-s-largest-energy-trader-sees-a-decade-of-low-oil-prices quote:Oil prices will stay low for as long as 10 years- Abort abort abort 
Pimpmust fucked around with this message at 22:17 on Feb 9, 2016 |
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Feb 9, 2016 22:14
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Anubis posted:People calling something the new normal or a fundamental shift away from everything that was previously known is all too often the first sign that things are about to go right back to normal. I assume that's the joke. Yes, this. These dudes making 10 year predictions around a stable oil prices are either scamming someone or are really dense, either way not worth listening to. This should help you figure out where prices and production is going:  Note the massive investment needed (a lot more dollars per barrel gained than before, and accelerating upwards) for a rather small uptick of mainly condensate/bitumen related oil production during the last ten years since 2005, and then look at the crashing investment. Meanwhile the IEA are pulling out predictions like these:  The IEA WEIO 2014 p 51: “Annual investment in upstream oil and gas rises in the New Policies Scenario by one-quarter to more than $850 billion by 2035, with gas accounting for most of the increase. More than 80% of the cumulative $17.5 trillion in upstream oil and gas spending is required to compensate for decline at existing oil and gas fields. A further $5 trillion is required for oil and gas transportation and oil refining.” “Gradual depletion of the most accessible reserves forces companies to move to develop more challenging fields; although offset in part by technology learning, this puts pressure on upstream costs and underpins an oil price that rises to reach $128/barrel in real terms by 2035.” All that investment to keep production slightly creeping upwards, there's one more kink though:  Note "Yet-to-be" areas. That's oil we haven't found or developed yet, and with very little investment going to exploration (and we've long since gone past the point where we were finding more oil resources than we were using up already) it's not looking like those will be found or developed, unless prices are 100+. The most recent 2015 IEA outlook has a 4% decline in existing (conventional) fields provided there are enough investments. IEA’s 2013 outlook showed a whole 8% average decline pa in existing fields without investments. It's not super complicated math, yet we have these guys coming out and flagging ~50 dollar oil for a decade? Do they know something about a civil war and collapse of China/India/Europe/The USA that we don't? 
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Feb 10, 2016 17:05
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The various biofuels for example serve as a substitute to oil in many ways (to the point of being *counted as equivalent to oil* in official statics over production figures) and their price is set relative to oil, as their total production costs are often on the high side they too are feeling the pinch now. Electrics are different, but also high cost and can't compete on price when oil prices are this low. So no, I don't think displacement will be happening during <10 years to keep oil prices at $50. They can serve to rein in very high oil prices, but that too takes time, it's not easy to ramp up production quickly on either biofuels or electric cars so oil price spikes can still happen (see 2007/2008). You are also missing the point I made about depletion rates and capex. To keep a whopping 1-2 million barrels in oversupply for 10 years you'll need a lot more capex than is currently happening.
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Feb 11, 2016 07:44
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| # ¿ May 22, 2024 12:21 |
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Mercury_Storm posted:Saudi Arabia is actually investing in solar so they can sell more oil rather than use it domestically: Considering that their domestic oil consumption has grown from 1,5 million barrels to 3 million barrels during 2000-2013, at that rate by 2030 they'll be burning somewhere north of 5 million barrels/day domestically.
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Feb 12, 2016 06:45
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