Posted on 12/15/2014 11:04:18 AM PST by thackney
Gasoline is what “we” see every day, but you’re probably correct, it is but a small component of worldwide oil consumption.
But I don’t see recession, and I see continued low interest rates.
US consumption isn’t the source of the predicted change in consumption growth. The US is not the demand “problem”, it is the supply “problem”.
World Oil Demand Outlook Cut Again; Sub-$60 Price Seen Holding
http://www.bloomberg.com/news/2014-12-12/iea-cuts-global-oil-demand-forecast-for-4th-time-in-five-months.html
The US oil industry has been using hydraulic fracturing since the 1940s. It won’t end at $50 oil. It certainly won’t grow like it was at $100, but it won’t go away either.
“Why do you think the global oil demand is stagnating?”
Because the IEA has been saying so, for months.
“IEA estimates that global oil demand will be weaker in 2015 than previously anticipated and supply from countries not part of the Organisation of the Petroleum Exporting Countries (OPEC) will be bigger.
The agency said consumption will grow by 230,000 barrels a day less than it estimated last month, while output from non-OPEC countries will grow at a quicker pace than IEA predicted in November.
It comes after OPEC cut is forecast for global oil demand in 2015.”
http://www.ifamagazine.com/news/europe-close-stocks-slide-as-oil-prices-drop-310508
Plenty of drilling and fracking for natural gas with prices at $4 to $6, compared to $10-$12 several years ago.
Sorry, I wasn’t clear.
I wasn’t expressing doubt it was happening.
I was asking the cause. It is the downturn of other countries economic strength. Same causes for the 2009 drop in prices, although the US was deep in it than today.
But your example isn't very reassuring, when you look at the number of rigs pursuing Natural Gas back then to today.
Are fewer rigs required as horizontal drilling and fracking become more prevalent? IOW, is drilling significantly more efficient than formerly? I’m asking, as a layman.
Most of the NatGas rig drops came from the gas price falling while the oil price climbed.
The same rig went after oil instead of gas.
S gasoline price has already dropped nearly twice the average fuel tax.
Where is the economic boom from that?
:-)
There has been a bifurcation of rig counts to well counts as rigs have become more efficient at drilling. Baker Hughes started reporting well counts about 18 months ago for this exact reason.
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-wellcountus
Well Count
All questions on the Baker Hughes Rig Count and Well Count should be e-mailed to: Oilfield Knowledge Center
Please direct all other inquiries or questions to our main number at: 713-439-8600
Download PDF Version of Map
The Baker Hughes Well Count is a natural extension of the Baker Hughes Rig Count, which has provided key activity data for more than 70 years. The index provides key U.S. onshore well count data to the oil and gas industry.
As new technologies and methodologies are introduced to the unconventional market, there is a continual evolution of drilling efficiencies, which can be difficult to measure. The Baker Hughes Well Count provides a greater understanding of key market forces, capturing the number of wells that were spud in each major U.S. basin.
Not only does the Baker Hughes Well Count provide a unique perspective of oilfield activity, but when combined with the Baker Hughes Rig Count, drilling efficiencies can be tracked by basin.
It does make sense. With one setup, several wells can be drilled in horizontally in different directions. Formerly, each setup required a new location (bulldozing a clearing, road construction, assembling and disassembling the rig, etc) which takes a couple of weeks, I would guess. Now that time can be used for productive drilling.
‘Most of the NatGas rig drops came from the gas price falling while the oil price climbed.’
Am also betting there,are some definition changes going on with what is considered gas vs oil.
Most of the Eagleford ‘oil’ wells are actually gas wells making more condensates
Do you understand that OPEC hasn't increased their production? Hardly the same.
Do *you* understand what OPEC's basic goal is in pursuing its current policies? Do you understand how frightened OPEC is of *our* new found capacity...our new found technology?
More like ‘98
Oh there will be a lag and a sharp spike in prices that does it. After seeing a shark the swimmers are reluctant to trust the water.
It took two years in ‘98 / ‘99 and then along came 9/11/01 and it went down all over again. Took until 2004 for things to get better again, again. I made a great deal for a drill ship in early 2004 that the contractor did all he could to get out of because the market was rising so fast. Before that, not so much.
Those were long and lean years again. Looking back over 40 years there have been more lean / sluggardly years than there have been good ones. It is a brutal industry and a risk industry for everyone involved. That is why it pays so well when it is good.
Steady would be much better but it never happens. It is always like a gold rush or a busted boom town.
Not just a whole heck of a lot can continue below $50. If $50 goes on very long there will be blood in the streets of the oil patch and keys in the flower beds in Houston, Midland and Williston.
About the only thing happening will be obligatory drilling for lease hold and work overs. I’ve seen it all before times FOUR and it is absolutely brutal.
There was hardly a breath of air stirring in the oilfield in ‘86/’87 that one lasted for years, or ‘98/’99 or ‘01/’02. I was shocked ‘08/’09 recovered so well with global demand down so much.
‘82 was brutal. I laid down 18 rigs in a month out of 21 that we had running. There was so little left. I had a lump in my chest bigger than a basket ball for months. So many people out of work. So many that had to be told bad news. You do what you can but seeing good men that do great work and want to work break down has taken a toll on me for decades now. It is so painful to experience.
“Those were long and lean years again. Looking back over 40 years there have been more lean / sluggardly years than there have been good ones. It is a brutal industry and a risk industry for everyone involved. That is why it pays so well when it is good.
Steady would be much better but it never happens. It is always like a gold rush or a busted boom town.
“
That mirrors the 41 years as an engineer in the industry.
Laid off after 27 years with a major.
Finally retired this year while I could do it voluntarily.
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