Enjoy the sub $3.00 gas prices while they last. The Saudis know what they are doing. Oil was $25 per barrel and gas prices were below $2.00 when the Saudis took down the twin towers. Know your enemy.
Despite the constant blather that lower oil prices are “unequivocally good” for America, we suspect companies working and people living these 19 Shale regions will have a different perspective…
Drilling for oil in 19 shale regions loses money at $75 a barrel, according to calculations by Bloomberg New Energy Finance. Those areas pumped about 413,000 barrels a day, according to the latest data available from Drillinginfo Inc. and company presentations.
“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke,” said Daniel Dicker, president of MercBloc Wealth Management Solutions with 25 years’ experience trading crude on the New York Mercantile Exchange. “The shale revolution doesn’t work at $80, period.”
Fuck all these oil maggots & the Saudi’s. Ruining America’s water table daily and at least one state has made it illegal to divulge what terrible shit is in the “injection fluid”. Great way to serve the public, eh?
Oil maggots? Seems to me that providing a product demanded by hundreds of millions of Americans is at least a reasonable business model, and not in the least maggoty.
As far as “serving” the public, that isn’t part of the articles of incorporation of any for profit that I have ever heard of, so it seems bit unfair to pretend that this should be a guiding principle somehow.
If you want to stop oil and gas companies, the best way to do it, and one completely within the control of individual citizens, is to just stop using their products. Tell them thanks,but no thanks, and move along. Anything else is just participating in the scheme, and doing so allows no real room to then pretend it is someone else’s fault as you, and I and others drive, fly, wear petroleum byproduct clothes, heat our homes, put rubber tires on our bicycles, or do all those other things that encourage the previously mentioned business models.
A pledge for those trying to put a dent in big oil! Go Amish or go home!!
Saudis, like others, just obey to uncle sam. today’s oil prices just reflect the pissing contest between the US and Russia. US just try to recycle the old reagan tactic that implies to drive the oil prices low to cut russian’s profits. this is made this time via the banksters.
but… americans shot themselves in the foot, because russians already insured they could sell their products at a fixed price to China, not to mention they can increase production as they want.
Putin 1
Obama 0
Oil prices reflect all sorts of things. Geopolitical pressure and machinations is certainly one of them, as are the products demanded from the refining of a particular commodity. We the people could negate the entire scheme of geopolitics by just deciding to go do something else, change our behavior, live closer to work and sacrifice the need for that 4 wheeled monstrosity, take the bus, insulate the house, pretend that our energy decisions MATTER…because they do.
The Amish lifestyle is certainly one excellent solution, but obviously not for everyone.
Here is another…telecommute. If you must, keep an EV around for local transport. Don’t travel the globe if you don’t have to. Live in a place that matches your desire for cultural and events that make you happy so you don’t have to travel much. Near a city possibly, near mountains and woods perhaps, certainly you could live IN a city if you prefer that lifestyle, or near one if you would prefer to be just at the outer range of the influence of those who prefer the company of other sheep.
It doesn’t matter to me in the least, but I find it difficult to listen to sheeple opinions advocating sheeple ideas when that sort of nonsense is most of the reason the country is in a mess.
Oil plunged below $68 a barrel this morning after OPEC decided to not cut production.
US shale oil miracle is imploding as we speak.
Canadian tar sands are also no longer profitable at below $80.
Energy company profits will be slammed.
S&P 500 profits will be slammed by USD rising by 11% in the last six months.
It’s all bullish.
The Sellside Chimes In On The Crude Crush: “This Will Reverberate For Years”
Submitted by Tyler Durden on 11/27/2014 12:23 -0500
The sell-side is worried…
SocGen’s head of oil research Mike Wittner warns “this will reverberate for years”… (via Bloomberg)
OPEC decision to keep output target is “unambiguously bearish,”
“We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC”
“It’s huge,” he says by phone from New York. “This is a signal that they’re throwing in the towel. The markets have changed for many years to come”
“The change is that it’s no longer Saudi Arabia and OPEC that are going to be managing the supply side of the market. It doesn’t sound like much, but that is so fundamental, it is hard to overstate”: Wittner by phone
“This will reverberate for years,” adding, it will “bring on lower prices and let the market do the job of throttling U.S. shale oil growth”
U.S. shale output unlikely to contract for 1-2 yrs amid lower prices
Goldman warns another large leg lower in Brent oil prices to near $60/bbl would not be sustainable beyond a few months (absent significant demand weakness) as it would accelerate the rebalancing of the oil market with Canadian oil sands and US shale oil projects reaching their production variable costs
The call on OPEC becomes the call on US shale
Today, November 27, OPEC announced that it would maintain its production target at its level of 30 million barrels per day. The organization further commented that it would aim to adhere strictly to this quota, although past quotas have only been loosely implemented. Today’s decision came in line with our expectation and our view that it is not in OPEC’s interest to balance the market on its own but that US shale oil production should contribute as well, given its scalability. Further, today’s decision comforts us in our forecast for a large market surplus in 1H15.
Potential for further price declines until evidence of a US production growth slowdown…
While we continue to believe that WTI prices in a $70-$75/bbl range are sufficient to incentivize US producers to reduce capex, today’s price sell-off creates potential for further declines in oil prices. In particular, now that OPEC is aiming to maintain production and market share, prices could trade lower until evidence of a pull-back from US E&Ps, when they announce their 2015 capex guidance in January-February (and despite our expectation for an only modest build in 4Q14 inventories). The next OPEC meeting is scheduled for June 5.
…although prices at current levels likely lead to a balanced market by 2H15
Ultimately, we expect US production growth will slow and that OPEC will implement moderate production cuts once this slowdown is apparent. Consequently, we reiterate our 2015 price forecast with Brent prices at $80-$85/bbl and WTI at $70-75/bbl. Importantly, we do not believe that it is in OPEC’s interest to push prices significantly and sustainably lower, and we forecast lower OPEC production starting from 2Q15, as the fiscal strain on non core-OPEC countries would be too large otherwise. Further, we believe another large leg lower in Brent oil prices to near $60/bbl would not be sustainable beyond a few months (absent significant demand weakness) as it would accelerate the rebalancing of the oil market with Canadian oil sands and US shale oil projects reaching their production variable costs.
There never was a US shale miracle. It was just some sales pitch invented by the media to explain what petroleum geologists have known for a century…there was oil and gas in the source rock from which it was generated. The problem was always price, and by extension the technology that this price enables.
Price allowed one to happen, and the result as the industry developed the most highly productive sweetspots was the fastest growth in American oil production…ever. While the magnitude of the result of $100 oil might have bee surprising, certainly the fact that there is plenty of oil around to develop is not.
So what will happen next is this…the less efficient operators will lay down rigs. Less work will cause service companies to clear their existing backlog (230 days spud to completion in the Williston Basin) and begin competing on a cost basis for business with the more efficient or well placed (acreage wise) operators.
At some point, as supply rebalances against demand, the rate of growth as rigs are picked back up again will allow some, but not all of the cost reductions to stick. Hard to say how much at this point.
The good news in all of this is that once prototyped in the US, the technology for a given price can theoretically be applied to formations such as the Bazhenov in Russia. The question THEN will be…does Russia develop the shales, or continue develop of undiscovered conventional production, or reserve growth in existing conventional fields? That choice will be interesting, but probably won’t show up for a decade or more.
I wonder the outcome of this economic war we have declared on Russia. I hope the U.S gets its
economic ass taken down a notch or three. This whole mess we started in the Ukraine was absolutely none of our business, and we go there and stick our finger in Russia’s eye.
Ukraine is a morally and financially bankrupt nation, and why does Europe and the U.S want to have the outdated NATO goon platoon babysit this basket case is beyond me.
I think Russia, while hurting, can do better with 65. barrel oil that we can with shale oil.
Russia is a one trick pony when it comes to its economy, the US is not. The price of oil weighs nearly as heavily on them as it does Saudi Arabia and Venezuela. It has been referred to in the past as “the resource curse” and very few have escaped it. Norway being a notable one.
Certainly the development of shale oil was happening at prices far below $65/bbl back during the early Devonian shale booms in Ohio…in the late 1800’s. It has only been noticeable as of late because of the early inoculations against energy imports during the energy crisis of the 70’s.
Back when the peak oil half wits FIRST began spouting off on topics they know little about.
Well. There goes the boom to bust. Unemployment from 5 percent to 15 percent in this area. But at least we will have water. Can’t afford food or a overly expensive home. Oh wait Obama will take care of us. FUBAR. Yeeeee. Haw
Well. There goes the boom to bust. Unemployment from 5 percent to 15 percent in this area. But at least we will have water. Can’t afford food or a overly expensive home. Oh wait Obama will take care of us. FUBAR. Yeeeee. Haw. Lived in oil country all my life. Nothing new to see. It is just a bust cycle. Cops and fireman will be busy. Been laid off and hired again. Struggled to pay bills and had plenty. Saved money had to spend it all in the bust. Life is a bitch sometime others a little better. Just keep moving.