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how low will oil go this year?

onthebottom

Never Been Justly Banned
Jan 10, 2002
40,558
23
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Hooterville
www.scubadiving.com
Now the question is will shale oil production ever revisit
or even exceed its previous high. And if it does it
might just end with another collapse of the oil price. I am
of the view that shale oil is an asset of strategic importance
to national energy security. Some regulation of the extraction
of shale oil should be beneficial to the U.S. economy in the long
run.

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SRSroco
Sept 17, 2016

The Death of the Great Bakken Oil Field has begun and very few Americans understand the significance. Just a few years ago, the U.S. Energy Industry and Mainstream media were gloating that the United States was on its way to "Energy Independence."

Unfortunately for most Americans, they believed the hype and are now back to driving BIG SUV's and trucks that get lousy fuel mileage. And why not? Americans now think the price of gasoline will continue to decline because the U.S. oil industry is able to produce its "supposed" massive shale oil reserves for a fraction of the cost, due to the new wonders of technological improvement.

I actually hear this all the time when I travel and talk to family, friends and strangers. I gather they have no clue that the Great Bakken Oil Field is now down a stunning 25% from its peak in just a little more than a year and half ago:

The mighty Bakken oil field located in North Dakota reached peak production in December 2014 at 1.26 million barrels per day (mbd) and is now down to 942,000 bd. This decline is no surprise to me or to my readers who have been following my work for the past several years.

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According to the most recent EIA Drilling Productivity Report, the Eagle Ford Shale Oil Field in Texas will be producing an estimated 1,026,000 barrels of oil per day in September, down from a peak of 1,708,000 barrels per day in May 2015. Thus, Eagle Ford oil production is slated to be down a stunning 40% since its peak last year.

http://www.zerohedge.com/news/2016-09-17/death-bakken-field-has-begun-big-trouble-us?page=1
Not the peak oil idiots again.....
 

wetnose

Gamahucher
Nov 14, 2006
2,445
0
36
I think the Bakken fell out of favor since it's production cost is too high...the new area of interest is the Permian in Texas.

And of course Peak Oil is a thing. Should actually be called Peak cheap oil but it's not as catchy.

Oil sure doesn't magically replenish itself - once it's gone, it's gone...like toothpaste from a tube.

All of the cheap, easy to find sources have either been tapped out or on their way there. Why else have companies resorted to fracking, deep-sea and oil sands?

https://en.wikipedia.org/wiki/List_of_oil_fields
 

onthebottom

Never Been Justly Banned
Jan 10, 2002
40,558
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Hooterville
www.scubadiving.com

Insidious Von

My head is my home
Sep 12, 2007
38,084
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oil&gas

Well-known member
Apr 16, 2002
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Ghawar
Aggressive decline in world oil supply in the near
term seems to be more certain than concomitant
price increase.
 

oil&gas

Well-known member
Apr 16, 2002
12,220
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Ghawar
From glut to scarcity: crude price outlook brightens rapidly

It is interesting to note that the author of this article
back in about a couple of weeks ago wrote something
along the line that oil price was going to fall further.


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Globe and Mail Update
Mar. 30, 2017

A roundup of what The Globe and Mail’s market strategist
Scott Barlow is reading this morning on the Web


The oil price has stabilized near the $49 level and saved-up bullish forecasts are popping up everywhere. The central investment thesis is that industry investment in new discoveries and development collapsed in 2015 and 2016 and this paves the way for an eventual supply shortage that will see crude prices soar once again,

"With oil prices hovering around $50 a barrel, current project spending is focused on "short-cycle" projects involving U.S. shale deposits, Daniel Jaeggi, president of Mercuria Energy Group Ltd., said at the FT Commodities Global Summit in Lausanne, Switzerland, Wednesday. Hedging activity by these same producers is keeping future prices low until 2020, which is dissuading investment in major oil projects, he said. "We are sowing the seeds for potential instability in the future and more volatility, " Jaeggi said. In three to four years, "you won't be able to satisfy demand with short-cycle barrels.""

The huge Cenovus/Conoco Phillips deal is the big energy story domestically. I am viewing this as a bullish sign for the industry – Canadian companies have been generally brilliant at picking spots to buy and sell assets to and from foreign companies.

"Oil Traders Warn There's a Supply Crunch Looming" – Bloomberg1
"Crude Oil Prices Rose above the 200-Day Moving Average" – Market Realist2 (warning: I don't know this site well)
"Cenovus snaps up ConocoPhillips assets for $17.7-billion" – Report on Business3
"ConocoPhillips sells oil sands assets for $13.3bn" – Financial Times4
Counterpoint: "IEA's Birol Expects U.S. Oil, Shale Production Boom" – Bloomberg5

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An important Bloomberg column warns that high-yield stocks are not always entirely good things, particularly where U.S. retail stocks are concerned,

"In a world where the benchmark 10-year Treasury note yields just 2.4 percent, these dividends can look pretty appetizing for yield-starved investors. The questions investors must ask themselves are the following: Are these beaten down retailers diamonds in the rough or value traps? Am I being paid to wait or are these dividends going to get cut in the future?"

"Don't Be Fooled By High Dividends on Retailer Stocks" – Bloomberg6

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I was going to put this story in the Diversion category until I realized its importance for investors. Harvard Business Review answers the question, "How to Spot a Liar,"

"Want to know if someone's lying to you? Tell tale signs may include running of the mouth, an excessive use of third-person pronouns, and an increase in profanity. These are among the findings of a recent study that delves into the language of deception, detailed in the paper Evidence for the Pinocchio Effect: Linguistic Differences Between Lies, Deception by Omissions, and Truths, which was published in the journal Discourse Processes."

"How to Spot a Liar" – Harvard Business Review7

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