Its going to be an oil bloodbath

[El Nikko + 2,145]

13 minutes ago, Douglas Buckland said:

My Vance & Hines pipes are illegal in California, Singapore and a few other places.

Before they were replaced one side had a 5" gash on the back box and hole in the pipe, that turned heads and was free 😂

I do love the sound of a V8 but 17 mpg is painful especially now we have a diesel VW Passat which does 50 mpg so it just sits on the drive mostly and is relegated to being the dog car and I keep my fishing rods in it...well when I say keep I mean I'm too lazy to put them away.

[Dan Warnick + 6,100]

23 minutes ago, Douglas Buckland said:

My Vance & Hines pipes are illegal in California, Singapore and a few other places.

Almost everything's illegal in Singapore.  Great city/state/island, but after a few days to a week I find myself getting annoyed by the rules, rules, rules and everyone talking the same way, almost like robots of a sort.

[Douglas Buckland + 6,308]

56 minutes ago, El Nikko said:

Before they were replaced one side had a 5" gash on the back box and hole in the pipe, that turned heads and was free 😂

I do love the sound of a V8 but 17 mpg is painful especially now we have a diesel VW Passat which does 50 mpg so it just sits on the drive mostly and is relegated to being the dog car and I keep my fishing rods in it...well when I say keep I mean I'm too lazy to put them away.

I only take my bike out on weekends as I hate city traffic....but well worth it! Stress relief on two wheels. Speed limits in Malaysia are more like suggestions than rules. It is common to be passed on the highway by sportbikes going 245+ kph.

But they just don’t look as cool as an old Harley Nightrod!😂

[BLA + 1,666]

On 4/4/2020 at 10:35 PM, Gerry Maddoux said:

When you think about it, there are very few businesses that the president can actually raise from the dead. Not restaurants, bars, hotels, car and truck dealerships, casinos . . . the list is obvious and almost endless. The largest "disruptors" of yesteryear--Amazon, Microsoft, Apple, Oracle, Netflix--are thriving beyond imagination. Unemployment is going to hit 20%, they say. That's huge. 

President Trump can actually save domestic oil and gas jobs. We are now producing 13M barrels and importing about 7M. This is crunch time: we can either continue to import oil from OPEC and endorse the mad prince's crazy enterprise or we can use our own oil, slap a tariff on Saudi oil, use Canadian oil for our heavy feedstock mix, and . . . . . save domestic oil.

Does it deserve to be saved? We're talking about shale here. It really doesn't matter: hundreds of thousands of American jobs supporting millions of Americans are at stake. Oilfield workers spend. If they're working they're going to be buying groceries, not going to the food bank; they're going to donate (they have big hearts), rather than be donated to (which hurts their pride). This isn't about the idiots who wore $2,000 boots and jawboned private equity out of billions in a dupe; this is about American oilfield workers. 

I'm not one, an oilfield worker, never was one except for a short summer job between high school and college. There I came to appreciate the hard work, family values, camaraderie and spirit of the American oilfield worker. I don't speak the lingo that most of the people do on this forum, but I marvel at their musings and knowledge. I think I understand them--even the ones whose formulations differ from my own.

But I don't think for a minute that Prince Mohammed bin Salmon understands President Trump. I think he believes our president is a hotel man, a reality show producer, a jet plane and yacht enthusiast, a playboy like himself--now all grown up and old. Our president has been all of those things, but there's nothing like a crisis to bring out the fiber in a man, and this is some crisis. I seriously think that President Trump is going to save those hundreds of thousands of oilfield jobs, even if it means shocking the prince. To be honest, I'm not enthralled with shale. But I am enthralled with the American way of life, the indomitable spirit of her workers, and the need to save all the jobs we can.

Disagree

There are about 67 public independent producers and a half dozen majors in the Permian. That will consolidate to maybe 10.

As many "experts" have clearly stated , companies may disappear but the rock is still there.  

U.S. shale doesn't have to produce at OPEC oil b/e prices.  After the consolidation the U.S. avg b/e will get below $30 within a year or two.  Everyone will make good return at $50 to $55 bbl.  Saudi Arabia can't keep oil prices low enough, for long enough to permanently damage U.S. oil industry. 

If I were MBS I would be more concerned about ME countries financial survival in what could become an even more volatile region. 

Jobs in the oil patch have been decreasing for years as more computer geeks and less roughnecks get hired. 

The " indomitable" spirit of the American worker is still alive and well.  

Shale will be just fine.

The U.S. worker will be just fine. 

The best thing Trump can do to maintain a strong oil industry is to end the Zombie Shale Producers now.  Let nature take its course. 

Shale oil like the rest of U.S. businesses don't need employees at the moment.  The Congressional bill allows for unemployment at full salary levels and forgivable loans for employers that retain their employees.  We'll get thru this.    Note there are projections of surplus of 20 to 35 mm bbl/day coming.  No production cuts will change that.  Screw the Saudis, bring the U.S. troops home. 

Trump will do something. He has to its an election year.  But bottom line  .  .  .   The consolidation is long overdue.  The writing is on the wall. 

 

Edited April 7, 2020 by BLA

[Douglas Buckland + 6,308]

“Jobs in the oil patch have been decreasing for years as more computer geeks and less roughnecks get hired.“

I don’t care how many ‘computer geeks’ you hire, if you don’t have guys working the drill floor, you will NEVER get that bit to TD!

[Hassan Abdullahi + 7]

4 hours ago, Tom Kirkman said:

Saudi Aramco appoints Mark Weinberger to board of directors

DUBAI (Reuters) - Saudi Aramco has appointed Mark Weinberger to its board of directors as an independent board member, replacing Andrew Gould, the company said in a statement on Sunday.

Weinberger was the global Chairman and CEO of EY (previously known as Ernst & Young) from 2013 to 2019.

He currently serves as a director on the boards of Johnson & Johnson and Metlife as well as being a member on several boards of trustees, including the United States Council for International Business (USCIB).

What benefit would he bring to Aramco if I may ask? 

[Tom Kirkman + 8,860]

47 minutes ago, Hassan Abdullahi said:

What benefit would he bring to Aramco if I may ask? 

None, in my opinion.

[Marcin2 + 726]

  On 4/1/2020 at 9:14 PM, Hiten Shah said:

World is getting rid of crude oil addiction

Pollution free world. in India we call Karma. We pay for your deeds. Those who earned money from pollution will lose their money.

Tom Kirkman:

You might feel more at home on a Greenpeace forum rather than this Oil Price forum.  You will likely have an uphill battle here. 

But please feel free to tilt at windmills all you want on this forum.  I can use the comic relief.

 

 I am wondering: What if user Hiten Shah is just ignorant, and he is not aware of the applications of hydrocarbons in transportation, chemical industry etc. He may not understand how internal combustion engines work, that you need hell lot of fossil fuels and metals produced by mining operations to manufacture Tesla. That Tesla is moving due to electricicity, and this electricity needs fossil fuels etc. 

Getting rid of crude oil is just like getting rid of electricity, theoretically we can all move back to caves.

Sometimes we assume that other users have our level of undestanding of reality, which is not the case.

Is there any place, like educational materials for beginners where you can learn basics ?

I would just provide Hiten Shah and similar users with links to such materials, I think loosing time on explaining how world works could be really frustrating.

[Marcin2 + 726]

What is the economics of crude oil industry ?

I mean how much costs are fixed and how much are variable, like rule of thumb ?

(In scenario of oil majors like: Rosneft or Saudi Aramco, Exxon, BP, where cost of capital is very low, and can eliminated from equation).

We can calculate how much governments are loosing through lost taxation but I would like to understand the situation from point of view of the industry, if no further cut and current situation will last till rebound after epidemic so August/September 2020 at earliest.

[BLA + 1,666]

3 hours ago, Hassan Abdullahi said:

What benefit would he bring to Aramco if I may ask? 

It's who you know. 

Short KSA. 

Edited April 5, 2020 by BLA

[BLA + 1,666]

3 hours ago, Douglas Buckland said:

“Jobs in the oil patch have been decreasing for years as more computer geeks and less roughnecks get hired.“

I don’t care how many ‘computer geeks’ you hire, if you don’t have guys working the drill floor, you will NEVER get that bit to TD!

Sure,  but producers are doing more with less these days. 

[KeyboardWarrior + 527]

On 4/1/2020 at 2:14 PM, Hiten Shah said:

World is getting rid of crude oil addiction

Pollution free world. in India we call Karma. We pay for your deeds. Those who earned money from pollution will lose their money.

So many randoms appearing in the last week. Coming in here knowing absolutely nothing and then saying something like "the end of oil is here, time for a renewables shift". It's especially funny because a broken economy can't finance these expensive solutions. Meanwhile oil is ultra cheap... 

[0R0 + 6,251]

22 hours ago, Wags said:

Seems like most of the dinosaurs here can’t see a future without oil which doesn’t surprise me. Sure you might need oil for plastics or whatever but as an energy source it’s definitely on the out. These oil lovers literally sound like they belong to a cult of oil, I don’t understand why they get so defensive about oil. If it wasn’t for oil corporations in bed with governments , we’d be on much better and faster track to less oil energy dependence, surely most of you dinosaurs believe humans are smart enough to run this planet without using oil. Anyways it’s good thing the younger generation have a much more appreciation for the planet we live in and can fix so many of the terrible problems the dinosaurs have created and left for us to clean up.

It is simple. Oil is on the way out anyway, but not the way you think. And it will take about two decades for most of the transition, and what we won't transition to is EVs. The only truly cheap power potential is solar in the desert. Guess what, people don't live there, work there or charge EVs there. in some populated areas, like TX, there are steady wind corridors that can actually provide nearly free energy. That is not available everywhere. It is actually only very specific zones and the transport of that energy is mind blowingly expensive in capital terms. So Singapore will get electricity from Western Australia's wind corridor along their shore. That is not a universally applicable circumstance. 

The problems you are implying are imaginary and not necessarily caused by us dinosaurs. 

[0R0 + 6,251]

1 hour ago, Marcin2 said:

What is the economics of crude oil industry ?

I mean how much costs are fixed and how much are variable, like rule of thumb ?

(In scenario of oil majors like: Rosneft or Saudi Aramco, Exxon, BP, where cost of capital is very low, and can eliminated from equation).

We can calculate how much governments are loosing through lost taxation but I would like to understand the situation from point of view of the industry, if no further cut and current situation will last till rebound after epidemic so August/September 2020 at earliest.

If we let doctors get results with the available meds documented already, then the whole deal is done by the end of the month with room to spare. The lockdown Democratic states will be destroyed by the decisions of their leadership, and will see an exodus of people such as we have not seen since the days of the Dust Bowl in the 1930s. 

Restarting will take time and not be immediate. Many small businesses will never make it out the other end. Air travel will be hurt permanently, public transport will no longer be a way to save money but only a means to survive for the lowest paid, everyone else will do their best to commute by car. Oil demand will RISE rapidly for that. But the biggest change will be the duplication of China's sole sourced materials to eliminate it out of supply chains which have proven to be too brittle to withstand disruptions. About $3 Trillion in today's money and probably 3 MOB/d contribution to demand. I can't figure out the balance because so much will have shifted. People and business will behave differently.

If the Dems in the US and the hardliner globalists get their way, the world will be deliberately put into a permanent recession. Don't fall of their shrieks about "saving lives". They want to bankrupt the world so they can "save" it and create a world safe for the CPC.  

 

[KeyboardWarrior + 527]

22 hours ago, Wags said:

Seems like most of the dinosaurs here can’t see a future without oil which doesn’t surprise me. Sure you might need oil for plastics or whatever but as an energy source it’s definitely on the out. These oil lovers literally sound like they belong to a cult of oil, I don’t understand why they get so defensive about oil. If it wasn’t for oil corporations in bed with governments , we’d be on much better and faster track to less oil energy dependence, surely most of you dinosaurs believe humans are smart enough to run this planet without using oil. Anyways it’s good thing the younger generation have a much more appreciation for the planet we live in and can fix so many of the terrible problems the dinosaurs have created and left for us to clean up.

Oh we know, but when we talk about the plan that works, you recoil in fear of radiation and non existent problems. 

[Rob Kramer + 696]

6 hours ago, Marcin2 said:

What is the economics of crude oil industry ?

I mean how much costs are fixed and how much are variable, like rule of thumb ?

(In scenario of oil majors like: Rosneft or Saudi Aramco, Exxon, BP, where cost of capital is very low, and can eliminated from equation).

We can calculate how much governments are loosing through lost taxation but I would like to understand the situation from point of view of the industry, if no further cut and current situation will last till rebound after epidemic so August/September 2020 at earliest.

I've come to see 10-20$ to get the assets and 10-20$ to run the assets (per barrel) . Then royalty/tax + non cash costs ontop. 

[BLA + 1,666]

1 hour ago, Rob Kramer said:

I've come to see 10-20$ to get the assets and 10-20$ to run the assets (per barrel) . Then royalty/tax + non cash costs ontop. 

In my opinion, when we are done with the covid glut and move forward your numbers will become obsolete . 

Edited April 5, 2020 by BLA

[Old-Ruffneck + 1,246]

6 hours ago, BLA said:

Sure,  but producers are doing more with less these days. 

Still 5 man crews on decent rigs and 4 man crews on crappy ones. Majority of rigs actually produce more employees per rig than in the horizontal days. More steps taken to get that oil outta the ground.

[0R0 + 6,251]

41 minutes ago, BLA said:

In my opinion, when we are done with the covid glut and move forward your numbers will be obsolete . 

EIA provides $25-35 without royalties, and $35-45 with them for the better shale operators on the better shales. Debt/financing costs is not included. 

[Old-Ruffneck + 1,246]

9 minutes ago, 0R0 said:

EIA provides $25-35 without royalties, and $35-45 with them for the better shale operators on the better shales. Debt/financing costs is not included. 

I certainly wouldn't put much stock in EIA's numbers. Wrong more than they are right.

[BLA + 1,666]

17 minutes ago, Old-Ruffneck said:

Still 5 man crews on decent rigs and 4 man crews on crappy ones. Majority of rigs actually produce more employees per rig than in the horizontal days. More steps taken to get that oil outta the ground.

The majors are now starting "manufacturing" operations to lift oil from a field.  More efficient .  Some are controlling more and more of the operations from engineering communication central back in Houston.  Field operations not going away.  Never said that.  Producers are doing more with less.

[Rob Kramer + 696]

1 hour ago, BLA said:

In my opinion, when we are done with the covid glut and move forward your numbers will become obsolete . 

I mostly check small + mid size cdn companies.  So I don't know what the outcome will be on our side.  I haven't looked into US shale since the shale oil fiasco thread. I just watch monthly eia and primary vision frack spread count for US info. Not that production matters with demand destruction of 20% give or take. Still alot of hedges running till q3. Mabey because of the pipeline issues companies have ran less capex intense so situations dont seem as dire . Seems like they just re shut in wells and only sell hedged barrels.

[BLA + 1,666]

6 minutes ago, Rob Kramer said:

I mostly check small + mid size cdn companies.  So I don't know what the outcome will be on our side.  I haven't looked into US shale since the shale oil fiasco thread. I just watch monthly eia and primary vision frack spread count for US info. Not that production matters with demand destruction of 20% give or take. Still alot of hedges running till q3. Mabey because of the pipeline issues companies have ran less capex intense so situations dont seem as dire . Seems like they just re shut in wells and only sell hedged barrels.

The hedges

Good point. 

Even the best only hedged 50%

[Douglas Buckland + 6,308]

10 hours ago, BLA said:

Sure,  but producers are doing more with less these days. 

The original post mentioned “roughnecks”. Roughnecks work the drill floor and have nothing to do with production.

I get your point regarding production activities though.

[Hiten Shah + 22]

22 hours ago, Marcin2 said:

  On 4/1/2020 at 9:14 PM, Hiten Shah said:

World is getting rid of crude oil addiction

Pollution free world. in India we call Karma. We pay for your deeds. Those who earned money from pollution will lose their money.

Tom Kirkman:

You might feel more at home on a Greenpeace forum rather than this Oil Price forum.  You will likely have an uphill battle here. 

But please feel free to tilt at windmills all you want on this forum.  I can use the comic relief.

 

 I am wondering: What if user Hiten Shah is just ignorant, and he is not aware of the applications of hydrocarbons in transportation, chemical industry etc. He may not understand how internal combustion engines work, that you need hell lot of fossil fuels and metals produced by mining operations to manufacture Tesla. That Tesla is moving due to electricicity, and this electricity needs fossil fuels etc. 

Getting rid of crude oil is just like getting rid of electricity, theoretically we can all move back to caves.

Sometimes we assume that other users have our level of undestanding of reality, which is not the case.

Is there any place, like educational materials for beginners where you can learn basics ?

I would just provide Hiten Shah and similar users with links to such materials, I think loosing time on explaining how world works could be really frustrating.

Don’t get frustrated. I would like to introduce myself as an Mechanical Engineer and MBA Finance.https://www.thehindubusinessline.com/economy/petrol-diesel-sales-shrink-in-march-as-lockdown-wipes-demand/article31269848.ece/amp/

if situation continues India won’t import any crude oil.

• Maruti Suzuki ( more than 50% share ) VW Group & Renault will offer only petrol and CNG engines in India
• Come April and dieselversions of over 40 cars and SUVs will be phased out from the market as companies shift their focus completely to petrol models and cleaner CNG and electric versions, with the onset of the BS6 emission norms era.

• AIR POLLUTION
  With factories shut, airplanes grounded and vehicles off the road, one positive thing that has emerged during the lockdown is the clean air and a major drop in the pollution levels in Delhi and Mumbai.

   
  Delhi, which was gasping for fresh air until January and February this year, has been witnessing clear blue skies and fresh air. The average Air Quality Index (AQI) in Delhi for the past one week has remained in the range of 50-60, which is almost 4 to 5 times lower than what it was just a couple of weeks back.
   
  The average AQI level in Delhi for February had been more than 200-250, which is hazardous, while in January and December, the AQI was between 250 and 300, which is dangerous.
   
  While comparing the current AQI levels in Delhi with that of last year during the same period, it is seen that during March 2019 to the first week April 2019, the AQI levels in Delhi were almost four times higher than what they are currently.
   
  Even Mumbai is witnessing clear blue skies and fresh air. The average AQI levels in Mumbai for the last one week remained at just 27-35, while in January and February this year, Mumbai had experienced an AQI level of around 130-150, while industrial areas and outskirts of Mumbai witnessed an average AQI level of 250.
• https://m.economictimes.com/small-biz/productline/power-generation/renewables-account-for-three-quarters-of-new-capacity-in-2019-irena/amp_articleshow/75010903.cms

The renewable energy sector added 176 gigawatts (GW) of generating capacity globally in 2019, marginally lower than the 179 GW added in 2018.

However, new renewable power accounted for 72 per cent of all power expansion last year, said International Renewable Energy Agency's (IRENA) new data on Monday.

Solar and wind contributed 90 per cent of total renewable capacity added in 2019.

"Renewable energy is a cost-effective source of new power that insulates power markets and consumers from volatility, supports economic stability and stimulates sustainable growth," IRENA Director-General Francesco La Camera said.