Posted on 07/26/2016 9:29:43 AM PDT by bananaman22
U.S. oil production peaked at over 9.6 million barrels per day in June, 2015: Based on Core Labs' prediction above, U.S. oil production will fall to under 8.3 million barrels per day before the end of this year and will continue fall to under 7.5 million barrels per day sometime in 2017 before it stabilizes. The only thing that will stop U.S. oil production from falling is a sharp increase in oil prices. In my opinion, West Texas Intermediate (WTI) must move firmly over $60/bbl before we will see the increase in capital expenditures necessary to stabilize U.S. oil production.
In my opinion, the only reason for the recent pull back in oil prices is the FEAR that has been created by the Brexit vote.
(Excerpt) Read more at oilprice.com ...
The pull back in prices is because the chicoms have dumped a bunch of gasoline in the US and refiners are slowing down. Refiners are the root of the demand for crude.
Production will continue to fall and significantly.
This is the second wave of panic and I don’t know when it will end for certian.
Not this year though.
Gas will be cheap continuing through the summer because the ChiComs just dumped a crapload of refined petroleum products on the world market.
CC
Just got back from the Permian. The shallow wells were pumping away. I saw a few workover rigs in place, but a whole parking lot full of idle ones. Looked like there was steady business going on, and the malls were full (doing better than the Metroplex malls). The hotel folks indicated that they were full M-Th, but weekends were light. Compared to the early nineties, things looked prosperous but not ‘boom town’. Lots of oilfield truck traffic on the back roads.
On the other hand, in the Abilene/Sweetwater area, half of the wind turbines were idle on a 100 degree afternoon.
But gas prices will be going down?
I’ve googled oil prices maybe twenty times over the last six months and each and every time there’s at least one story among the top results claiming oil prices have bottomed. Usually they’re sanwiched between one about the glut and another about how prices fell again that day.
They called bottom in: January 2015, May 2015, September 2015, December 2015, March 2016, June 2015 when prices were back up to the 50’s.
T Boone said we’d see $80 by winter...of 2015. 7 months later and guess what no $80.
I’m convinced that the fluctuations in the dollar are more at work than supply and demand at this point.
Driving tourism is up due to attractive prices and hatred of the TSA.
Put all the cross-currents together and we should have rather stable prices for now.
So many pundits with so little data to form their opinions.....
The speculators (The Bottom Seekers anyway) should now be called “Want Wishers” in the Oil business. They all speculate what they wish would happen well before they put their money where their speculations are. Otherwise, why would they forecast their next investment move whether they are shorting the markets or betting on them?
With the summer driving season coming to a halt, the refiners will be shutting down for maintenance. The glut of gasoline will draw down but crude stocks will build. WTI is down again today yet many energy stocks are ticking up. This triple bottom looks like another buying opportunity but not nearly as good as the previous two.
We have a lot of shale wells (big frac jobs) that are shut in. They are shut in because of low crude prices. When prices rise they will bring them on line. When crude hits 65-75 dollars a barrel they will start drilling new shale wells. We will have cheap crude for a number of years.
It should also be noted we know where the vast reserves of shale oil are. When the economics are good, we will drill it.
Link below to a good article about economics of shale oil.
http://oilprice.com/Energy/Oil-Prices/How-Shale-Oil-Will-Survive-The-Crude-Carnage.html
“On the other hand, in the Abilene/Sweetwater area, half of the wind turbines were idle on a 100 degree afternoon.”
Yeah, if you draw a square (area known to locals as The Big Empty) north from Abilene to Wichita Falls, westerly to Lubbock, south to Midland, east back to Abilene you’ll see more wind turbines than you ever knew existed. Looks like the Tom Cruise War of The Worlds movie set. In fact, there is a complex of huge power lines and a right of way running from this area back into the DFW Metroplx. Must of been some interesting eminent domain negotiations performed to get this done.
Thanks for the link.
I’ve heard that Permian is the only basin still active. I think even Eagle-Ford has taken a hit.
$7 Billion in ‘fees’ for the ratepayers takes care of a lot of poles and wires. https://stateimpact.npr.org/texas/2014/06/26/how-new-transmission-lines-are-bringing-more-wind-power-to-texas-cities/
It won’t end until demand picks up, there has been too much expansion of production.
IOW the economy will have to grow- and there doesn’t appear to be any way of growing it! Governments are sucking the investment money up for their bread and circus policies.
10% more summer blend in storage now than this time last year. Switching over to winter blend gasoline production now instead of latter August to keep refinery in operation. Can’t sell winter blend until Sept. 15. Re-blending summer gasoline with butane for conversion to a winter grade.
Glut of diesel reveals less shipping by truck, rail, and push-boat barge. Can’t have a slump in shipping at the same time as an expansion of the economy.
Dem’s make false claim economy is growing for political talking point, but reduced shipping undercuts that meme.
This is a parallel to the saying about studying military success: amateurs look at strategy and tactics, professionals look at logistics. You have it exactly right with your data and analysis. Everything else is just political puffery with a basis in doctored data.
I think we would need to see the worldwide recession end.
“$7 Billion in ‘fees’ for the ratepayers takes care of a lot of poles and wires”
Thanks for the article, interesting for sure. I’m on a deer lease west of Crowell on the Pease River. Spent some otherwise boring days sitting at my deer stand watching cable being strung by helicopter. Usually a couple of guys up on the tower cross members to guide and secure cables. Looked like a good job for young Cowboys killing time till the next rodeo, lol :)
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