Skip to comments.High Oil Prices Are Here To Stay
Posted on 06/09/2014 5:29:20 PM PDT by ckilmer
American oil production is surging. Yet oil prices remain near $100 a barrel.
You may be wondering: When will all of this additional production finally overtake demand and push the price of oil down?
You can find one answer in the price of oil futures -- which say we can expect oil to fall to closer to $80 in the coming few years and stay there.
(Excerpt) Read more at nasdaq.com ...
Perhaps the GOP could tell the dems to get off of this minimum wage BS and look at doing something that will actually lower the cost of living instead?
“..Yet oil prices remain near $100 a barrel..”
which proves which many have believed, and that is that “supply and demand” plays no role in the oil industry.
It has always appeared to be manipulated - but before we thought it was the Arabs.
The US is at least $17T in debt that they admit to. It’s at least 4x that. The problem is spending. Look to Detroit as electing DemocRats is not good and neither is electing RINOs.
Fully three-quarters of the horizontal oil being produced in the United States comes from the Bakken and Eagle Ford. Without these plays, the horizontal boom would be barely noticeable.
Equally important to note is that production growth in both the Bakken and the Eagle Ford is slowing significantly. The growth of production both by rate and absolute amount in both of these plays appears to have peaked.
During his recent presentation, EOG's Thomas was asked what the next big horizontal oil play in the United States would be. His answer? There isn't going to be one.
EOG has scoured the United States and hasn't found a new play with anything close to the productive capability of the Bakken and Eagle Ford.
What makes the Bakken and Eagle Ford unique is that they are crude oil plays. Most of the other large horizontal plays are "combo" plays that have large hydrocarbon accumulations, but much of those hydrocarbons are in the form of natural gas and natural gas liquids.
For example, in his presentation, Thomas referred to the Permian Basin in West Texas as having lots of barrels of oil equivalent (BOEs) -- but heavy on the "equivalent" and light on the oil. There is going to be a lot of production from the Permian in the coming years, but a great deal of it won't be oil.
Production is up and demand is supposedly down.
Any one smell a rat?
You’ll get the oil championing guy on here bashing you for saying such things. Can’t question the poor oil industry like that.
It’s called ‘the declining value of the dollar’.
I see it all around.
$6 an lb ground beef.
Jeez these guys are killing us.
So they really do have a ‘magic potion’ that has eluded the Democrats all these centuries?
I think the plateau at the end of the graph will go sharply higher when summer reports come out.
EOG’s take on the Permian is telling. That explains why they’re doing a massive amount of new drilling in the Eagle Ford right now. This means that at least EOG’s leases in the Permian are don’t have a lot of oil but rather a lot of natural gas and NGL’s.
Should EOG’s word that there won’t be anymore eagle ford or bakkens in the USA — be taken as gospel? Or just a very educated opinion right at this moment.
Like that is going to happen.
For those who want to see a video showing how horizontal drilling and fracking is done, Northern Gas and Oil has a great one. Its 6 minutes.
It includes a visual piece on how fresh water aquifers are protected from contamination.
Of course the beef market actually makes sense.
Severe drought, higher prices. Lag in the price rise.
Things are like in cartoons with the slow motion water hose schtick in Tom and Jerry.
Yes. Oil is traded in dollars. As the dollar goes up the price of oil comes down. As the dollar goes down the price of oil goes up. Since the Fed will continue to devalue the dollar right into collapse I think this article is right that the price of oil is likely to stay up just not for the reason they are stating.
We are thinking of buying one of these little beauties as a hedge www.eliomotors.com
$6,800 and 84MPG
The WTI crude future is over $104 today. Speaking of the future, it’s likely that many more people will be driving cars and trucks in developing countries over the next few decades—maybe several hundred million.
Cool. Can it fly?
Could it be a back door way of saying that the other reserves are to expensive to develop given the current price?
It doesn’t fly but it will do over 100 MPH. We are really seriously thinking about putting in an order for one. Its supposed to be getting a 5 star crash rating and Pep Boys is going to be servicing them. So you just drive to any Pep Boys in your area for the servicing and repairs..
“.. they may have played a role - “eluded the Democrats all these centuries” - dunno what, but something is amiss.
but “supply, demand?”
There was a recent vote in the California legislature regarding fracking. Oil companies gave money to Democrats AND Republicans to DEFEAT IT!
Getting due for a new ride........want a truck......but told myself this weekend, them dang gas prices ain't never coming down.
Can anyone say Honda ?
If you look closely at the chart you posted, you will see that all the formations peaked in October 2013 or so. Chances are, this was a decision from board rooms, rather than a natural slowing of production.
Perhaps the more important measure would be recoverable oil reserves. From an Alberta perspective, the recoverable reserves in the Athabasca oil sands grows each year as new technology pushes that figure upwards. In addition, some of the older plays are extended by enhanced recovery methods like SAGD, CO2 injection (Weyburn Field), etc.
Because of where EOG came from (Enron Oil and Gas), and having met the former President of EOG Canada in 2000, I take anything said by the ‘brass’ at EOG with more than a grain of salt. The moment I heard that man speak in 2000, I took a distinct dislike to him. Arrogant, hyperactive blarney, with little substance, cut from the same cloth as Skilling. First impressions are lasting!
The Permian will ultimately make more oil. EOG is driven by the higher rates of return in the Eagle Ford and the Bakken. Once that is drilled up within the next decade, they will go to the Delaware And Midland Basin but they have a much smaller acreage position.
PXD. That’s your big player in the Midland Basin. The Delaware has many playas. They all need more water and sand.
I keep waiting to be correct. It will happen. Booms never last long.
The recent dip in EF and Bakken production is due to temporary industry changes such as reduced spacing, not reservoir depletion. Thomas circled it as an predictor of future declines, which I take as an effort to discourage competition.
Thomas also said that prolonged oil prices under $90WTI will shut down most horizontal drilling. He wants over 100% ROIs. I think he's playing up his advantages of strong land positions, technology and data to cool his competitor's hype.
Global demand is up, not down.
Oil is a globally priced, fungible commodity.
Go back to previous postings I have made here.
The Bakken is unique, and the Eagleford has only a relatively tiny window of commercial activity along its liquids maturity belt.
No one has found the widespread commercial accumulation as these two have.
Chances are no one will.
Physics dictates liquids does not move very well through such tite rock
That is the plan.
Since the price of oil has come back from it's nadit in the early 90's, they have been doing a lot of horizontal drilling in the old oil fields in the Permian Basin. A lot of the drilling around Glasscock County have been horizontal wells, especially around Garden City. Most of the property owners in Garden City are getting royalty checks from wells drilled horizontally under their lots.
Going back in the old established fields and re-drilling/fracking the old wells makes sense for doing secondary and tertiary recovery projects. The original wells probably got less than 20% of the avialable oil out of the pay zones.
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