Trumps Oil Industry....

[Wombat + 1,028]

5 minutes ago, Dan Clemmensen said:

Yes, the US is more market-driven, but we're actually not doing that badly. I think one big reason that wind and solar are not yet making gas is that we are currently awash in NG. Once we begin to get our of that mess, the price will go up and the wind and solar guys will add the power-to-gas equipment. They'll go to H2 first and just inject it onto the current system. Then, the power companies will decide to either convert to H2, or pay enough for CH4 to make H2-to-CH4 convertors attractive, whichever makes more economic sense.  Either way, power-to-gas will eventually win against pure-play drilling for NG. It may or may not win against "associated gas", which is so cheap it's killing pure-play gas. So power-to-gas won't win until the Permian goes dry, but it'll be there when we need it.

The way I see it, both "green" H2 and CH4 probably already make more economic sense. When u consider the 100's of billions (and rising rapidly) that were wasted on the Permian, I reckon the US backed the wrong horse big time? True, the tech to export H2 has only just been developed (here in Australia last year, now copied by US), but some US utilities already switching to wind and solar coz it cheaper than NG, despite ultra-low NG prices. I think the US push to dominate oil and LNG markets gonna cost her several trillion over the next decade?

[James Regan + 1,776]

3 hours ago, Douglas Buckland said:

https://en.m.wikipedi

3 hours ago, Douglas Buckland said:

https://en.m.wikipedia.org/wiki/RM_Poole

a.org/wiki/RM_Poole

For those of of us in the know, as we are in the habbit of telling foreign powers where are Special Forces are stationed, I used to train there they are stationed at an RAF base called Condor, Very close to where I was brought up, here a part of a paper discussing what may happen if the Scottish Gov managed devolution with England. The SBS have bases in Hereford and Poole but the active units are in standby mode in Condor to protect Oil Installations.

Edited April 26, 2020 by James Regan

[Douglas Buckland + 6,308]

 

”For those of of us in the know, as we are in the habbit of telling foreign powers...”

habbit/hobbit/rabbit....you are once again slaughtering the Queen’s English James!😂

[James Regan + 1,776]

1 hour ago, Douglas Buckland said:

 

”For those of of us in the know, as we are in the habbit of telling foreign powers...”

habbit/hobbit/rabbit....you are once again slaughtering the Queen’s English James!😂

Ah you caught it before I hit edit, I was going to leave it, it was quite funny, I'm sure my spellchecker is a Scottish version, but its not its Ameican English, I have to conciously change color to colour etc, its a PITA but worth it just to be pedantic, as I write to my bosses in Houston i have to communicate in a way they understand, but the same is not reciprocated.

Its funny when they write to clients and use the word Y'all , dat word dont exist braw, I have to call them and explain its rednecks talking and forgive them as they mean no harm they just can't speak English correctly. 

Edited April 26, 2020 by James Regan

[Tom Kirkman + 8,860]

6 minutes ago, James Regan said:

I'm sure my spellchecker is a Scottish version, but its not its Ameican English

Those darn Ameicans. 

Like the Amish, but less strict.

[James Regan + 1,776]

3 minutes ago, Tom Kirkman said:

Those darn Ameicans. 

Like the Amish, but less strict.

Apparently Amish parties for teenagers are meant to be very hedonistic, is there truth in this legend, I did see a program on discovery and it was beyond hedonism, it was down right scary, not saying I wouldn't have given it a bash in my day, but a far cry from Luther and his cart and horse.....

[Wombat + 1,028]

China's March crude imports from Saudi slip, Russia up 31% - customs

 

 

3 MIN READ

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BEIJING/SINGAPORE (Reuters) - China’s March crude oil imports from top supplier Saudi Arabia fell 1.6% from a year earlier, while purchases from No.2 supplier Russia rose 31%, Reuters’ calculations based on customs data showed on Sunday.

 

 

FILE PHOTO: A VLCC oil tanker is seen at a crude oil terminal in Ningbo Zhoushan port, Zhejiang province, China May 16, 2017. REUTERS/Stringer/File Photo

China’s March crude oil imports rose 4.5% year on year to 9.68 million barrels per day (bpd) as refiners stocked up on cheaper cargoes despite falling domestic fuel demand and cuts in refining rates due to the impact the COVID-19 pandemic.

Shipments from Saudi Arabia were 7.21 million tonnes, or 1.7 million bpd, data from the General Administration of Customs showed.

That was down from 1.73 million bpd a year earlier and average daily imports of 1.79 million bpd during the first two months of this year.

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Russia supplied 7.02 million tonnes last month, or 1.66 million bpd, down from 1.71 million bpd recorded for the first two months, the data showed.

While state refiners mostly maintained deep production cuts in March to reduce their fuel stocks, independent plants cranked up run rates as the oil price plunge triggered partly by Saudi and Russian pledges to increase supply boosted refining margins.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries as well as other producers have since reached a new agreement on output cuts, helping to lift oil prices off historical lows but with many saying that deeper reductions will be needed.

China’s imports from the United States remained close to zero in March. After falling last year because of the U.S.-China trade war, they are expected to pick up later in 2020 after Beijing started granting tariff waivers on U.S. goods including crude oil from early March.

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There were no shipments from Venezuela for a fifth month in a row, as China National Petroleum Corp (CNPC) [CNPET.UL], Caracas’s top oil client, steered clear of Venezuelan crudes to avoid violating secondary U.S. sanctions.

Also, despite little sign of any easing in U.S. sanctions on Iran’s oil exports, data showed China’s imports from the Middle East producer at 2.558 million tonnes, up 11.3% from a year earlier.

Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; editing by Tom Hogue and Jason Neely

Our Standards:The Thomson Reuters Trust Principles.

[Wombat + 1,028]

A little tid-bit from Reuters on Chinese intent. Imports from USA zero, imports from Iran and Russia up! I don't know why ur energy secretary in US thinks this will change? Very naive if you ask me.

[D Coyne + 305]

7 hours ago, Wombat said:

What is more, if US invested heavily in battery farms and pumped hydro, wld only need to over-build wind and solar X1.4! Some states have already "seen the light".

Wombat,

It is propably cheaper to overbuild wind and solar than to invest in battery and pumped hydro storage, another avenue is to produce fuels using curtailed power (when wind or solar produces more than can be utilized by the grid, then produce hydrogen or ammonia that can be stored and burned when wind an/or solar output is low.  Lots of possibilities and more research needed, to be sure.  Basically all avenues should be pursued and let the cheapest (accounting for externalities) process take market share.

[Wombat + 1,028]

5 minutes ago, D Coyne said:

Wombat,

It is propably cheaper to overbuild wind and solar than to invest in battery and pumped hydro storage, another avenue is to produce fuels using curtailed power (when wind or solar produces more than can be utilized by the grid, then produce hydrogen or ammonia that can be stored and burned when wind an/or solar output is low.  Lots of possibilities and more research needed, to be sure.  Basically all avenues should be pursued and let the cheapest (accounting for externalities) process take market share.

I agree that all avenues should be pursued, but it silly to just choose the lowest cost option. Batteries may not be cheapest at face value, but have advantages in grid stabilisation that cannot be matched even by hydro. Having hydrogen as well would be best for the seasonal storage.

[D Coyne + 305]

17 hours ago, Valerie Williams said:

I want to start by saying that even though I've talked about not wanting my job to go away, I don't want to give the impression that I'm willing to "ruin the planet" for the sake of making more money. I know that's a big political jibe at the oil industry, so let's put it to bed at the outset. Over the past 26 years, I have worked in machine design, but not always in oil and gas. Oil and gas is probably less than half of my experience. I can transition to something else pretty easily, and so can anyone else in the oil industry. Our skills can be repurposed, so we don't need to senselessly pursue oil to the detriment of all else just to survive or make a profit. That being said, I don't think the world has the technological ability right now to transition away from oil and gas, and so there's still work in this area and I really like my company and coworkers right now - so that's my deal.

Here are my concerns with solar and wind:

First, I don't think the output from those technologies can scale large enough to replace oil and gas.

Second, you still can't get the byproducts from wind and solar that you can from oil (that everyone forgets about, but literally every industry depends on - plastics, elastomers, etc.).

Third, solar and wind farms are terrible for the environment. They are having a terrible effect on wildlife and ecosystems wherever they are installed. Now, you can have a debate on which is worse, fossil fuels vs. "renewables", but the idea that the "renewables" are "clean" and fossil fuels are "dirty" is just baseless. And if you expand those installations to the volume needed to replace fossil fuel, the environmental impact would be horrendous.

Fourth, you have the duck curve (https://en.wikipedia.org/wiki/Duck_curve), and all the batteries in your EV. All "renewable" energy sources require battery backup because the supply cannot be controlled; you have to accumulate it and store it. Batteries are far worse for the environment than oil and gas ever was.

https://eandt.theiet.org/content/articles/2016/10/lithium-ion-batteries-found-to-produce-toxic-gases/

https://www.treehugger.com/corporate-responsibility/living-with-the-side-effects-of-lithium-ion-batteries.html

https://www.forbes.com/sites/jamestaylor/2017/08/17/batteries-impose-hidden-environmental-costs-for-wind-and-solar-power/#1bdb7f26b4e1

Fifth, batteries, part 2: Slave labor. Seriously, everybody needs to quit being mad about slavery hundreds of years ago and be mad about slavery right now.

https://www.theguardian.com/global-development/2016/jan/19/children-as-young-as-seven-mining-cobalt-for-use-in-smartphones-says-amnesty

https://medium.com/thebeammagazine/cobalt-the-toxic-hazard-in-lithium-batteries-that-puts-profit-before-people-and-the-planet-ae5a63e0f57c

But replacing the nuclear plants - that's a shame, b/c nuclear is one technology that might wean us off fossil fuels (except for the by-products). Now, I have ZERO skills in that industry, so I really would be out of a job. 🙂

Thought of another one: Sixth, does anyone know how much of the raw materials for batteries and solar panels exist? Do we even know if the planet can support the manufacture of enough of them?

Valerie,

Nothing humans do has zero impact, that is pretty self evident.

I am assuming you have heard of climate change, you understand basic physics obviously as an ME, a comparison of the environmental impacts of wind and solar vs fossil fuel is a no brainer, not even close. 

There are plenty of other options for storage besides batteries, hydrogen produced by excess wind and solar during peak periods is one option, the hydrogen can be used to produce electricity during low output periods for wind and solar, nuclear (small modular units being developed) is another potential backup option.

Solar panels are made primarily from silicon (about 28% of Earth's crust, so fairly abundant and no doubt recyclable.)

Also power output from solar has been growing at about a 30% rate for past 5 years and for wind the rate has been about 15% annual output growth for the past 5 years.  Future rates are of course unknown, but considering that the fossil fuels used for transport and electricity production probably have average thermal losses of 65% or so (coal, oil and gas) only about 40% of that energy needs to be replaced by wind and solar power.  It will take some time obviously, but as fossil fuel resources start to reach maximum output levels over the 2025 (oil and coal) to 2035 (natural gas) period, prices will rise and the transition to alternatives to fossil fuel will accelerate as they will be relatively cheaper.

Some of this covered in a book I coauthored (maybe at a local university library) at link below

https://www.amazon.com/Mathematical-Geoenergy-Discovery-Depletion-Geophysical/dp/1119434297

[D Coyne + 305]

24 minutes ago, Wombat said:

I agree that all avenues should be pursued, but it silly to just choose the lowest cost option. Batteries may not be cheapest at face value, but have advantages in grid stabilisation that cannot be matched even by hydro. Having hydrogen as well would be best for the seasonal storage.

Wombat,

Yes all things need to be considered, I am not suggesting no battery backup, just not all storage needs to be in batteries, find the best solution at lowest cost (including environmental costs).  At this point I don't think we know what that is, we will learn by doing.

Valerie had mentioned the Duck curve, some of that can be solved with demand pricing, so a meter in every home showing the price of electricity which changes hour by hour based on supply and demand, smart buildings interact based on pricing (and anticipated future prices) and adjust building energy use based on needs and prices,

The duck curve mostly occurs because prices are based on an old time of use scheme that has only two or three periods (often peak, off-peak, and shoulder (or those are the terms used where I live), we can do much better, we have moved on the the 21st century.

[Douglas Buckland + 6,308]

With oil being so cheap, why look at any of this tree hugging nonsense? Every country on the planet is already geared up to use oil!

[D Coyne + 305]

6 hours ago, Wombat said:

The way I see it, both "green" H2 and CH4 probably already make more economic sense. When u consider the 100's of billions (and rising rapidly) that were wasted on the Permian, I reckon the US backed the wrong horse big time? True, the tech to export H2 has only just been developed (here in Australia last year, now copied by US), but some US utilities already switching to wind and solar coz it cheaper than NG, despite ultra-low NG prices. I think the US push to dominate oil and LNG markets gonna cost her several trillion over the next decade?

Dan and Wombat,

Great discussion, on H2 vs Green CH4, very interesting, thanks.

[D Coyne + 305]

4 minutes ago, Douglas Buckland said:

With oil being so cheap, why look at any of this tree hugging nonsense? Every country on the planet is already geared up to use oil!

Doug,

Just thinking ahead, the glut will not last forever, when the economy recovers in 2021 or 2022 demand for oil will increase to 2018 levels, but oil output will not be ramped up so easily, there will have been very little investment in 2020 and 2021 and as you are no doubt aware the depletion of existing proved producing reserves is continuous, for a time we can draw down excess crude and product storage (perhaps for a year or two), but by 2024 we will need to return to 2018 output levels and oil prices are likely to rise to $70 to $80 per barrel, if we remain on a plateau at close to 2018 annual C+C output levels (about 83 Mb/d) oil prices will continue to rise and will probably be above $100/bo by 2028 and unless there is a transition to other forms of energy for transport, oil prices will continue to rise, eventually (2028 to 2033 is my guess) the same will occur for natural gas in the US and rising natural gas prices will accelerate the transition to wind, solar, hydro, and nuclear  (along with green H2 or green CH4 for storage used to back up other energy sources).  This all occurs primarily over the 26 year period from 2024 to 2050 as oil and natural gas production winds down.

[Dan Clemmensen + 1,011]

8 hours ago, Wombat said:

The way I see it, both "green" H2 and CH4 probably already make more economic sense. When u consider the 100's of billions (and rising rapidly) that were wasted on the Permian, I reckon the US backed the wrong horse big time? True, the tech to export H2 has only just been developed (here in Australia last year, now copied by US), but some US utilities already switching to wind and solar coz it cheaper than NG, despite ultra-low NG prices. I think the US push to dominate oil and LNG markets gonna cost her several trillion over the next decade?

The shale revolution saved the US economy an immense amount of money, because it acted as a cap on OPEC cartel pricing. If no shale, then oil at $100/bbl.  Yes, lots of investors and employees ended up getting screwed, but  that was due primarily to deliberate actions by OPEC to kill shale. if there had never been a cartel, global oil prices would never risen to a level that allowed shale to be profitable. US LNG was primarily a side effect of shale oil, not a deliberate "push to dominate". The US does not "dominate" oil. The US "push", after about 12 years, finally got us to net import/export breakeven. That's not "dominance", it's merely effective independence from OPEC.

Yes, wind and solar are now cheaper even than NG in many places, and almost certainly cheaper if there were no "associated" NG production. The most cost-effective way to reach 100% renewable will include a mix of overbuild, short-term storage, long-term storage,  and transport, and will include both utility-scale and distributed systems. I think the market will sort this out, much more rapidly than any government-level grand plan could. It has already been fairly steadily underway for more than a decade, despite changes in the federal government's stated positions.

[Dg56 + 16]

6 hours ago, Douglas Buckland said:

With oil being so cheap, why look at any of this tree hugging nonsense? Every country on the planet is already geared up to use oil!

Hi Doug, 

Lucky you were not a stone-age chief, your trobe would still be banging rocks...

"we are good at it, and we still have plenty of stones!" ☺ 

[James Regan + 1,776]

9 minutes ago, Dg56 said:

Hi Doug, 

Lucky you were not a stone-age chief, your trobe would still be banging rocks...

"we are good at it, and we still have plenty of stones!" ☺ 

Doug is old and bold and in lockdown now for week ....6?

[Dg56 + 16]

Renewable are getting cheaper, and there are ways to store energy... 

That's exciting because we could become genuinely energy independent (no more at the mercy of a Vladimir or a Mohamed making decisions that wipe out half of an industry). 

Because the sun over our heads is OUR sun, nobody can take it away.

And true energy independance means the end of oil corruption and oil wars. 

It sounds good to me, I am happy. ☺

[Dg56 + 16]

Hi James,

The guys in your cartoon are certainly not "bald". Maybe they have been in lockdown for far too long, no hair cut...

Like Doug? His hair is growing back during lockdown? ☺

[0R0 + 6,251]

6 hours ago, D Coyne said:

Doug,

Just thinking ahead, the glut will not last forever, when the economy recovers in 2021 or 2022 demand for oil will increase to 2018 levels, but oil output will not be ramped up so easily, there will have been very little investment in 2020 and 2021 and as you are no doubt aware the depletion of existing proved producing reserves is continuous, for a time we can draw down excess crude and product storage (perhaps for a year or two), but by 2024 we will need to return to 2018 output levels and oil prices are likely to rise to $70 to $80 per barrel, if we remain on a plateau at close to 2018 annual C+C output levels (about 83 Mb/d) oil prices will continue to rise and will probably be above $100/bo by 2028 and unless there is a transition to other forms of energy for transport, oil prices will continue to rise, eventually (2028 to 2033 is my guess) the same will occur for natural gas in the US and rising natural gas prices will accelerate the transition to wind, solar, hydro, and nuclear  (along with green H2 or green CH4 for storage used to back up other energy sources).  This all occurs primarily over the 26 year period from 2024 to 2050 as oil and natural gas production winds down.

I think you are reading things incorrectly. First because the depletion is not happening as shut downs are. The oil is being capped offshore and will have to be partially redrilled as none of the designs considered a prolonged shutdown. Majors say the recovery will take about 2 years to get the oil moving out of the wells again. Shale is being throttled but apparently the consensus here is that it can be restarted in days rather than months. Some if not most of Russian output may be damaged for years to come through an output cut - not due to the OPEC++ agreement but through the simple fact that Saudi had aggressively bid to stuff all available global storage, specifically to force Russia to cut off the wells that can't come back. Venezuela is essentially off the map and will suffer civilizational collapse. Oil production is going to be down >10 mob/d for at least 2 years and of that 5 mob/d for the bulk of the decade, mostly from Russia.  Any resumption is not going to get you back to the old 2019 conventional production levels for the decade. 

That will have a huge effect on supply and demand balance in recovery from the shutdown. Shale will recover along with OPEC (Saudi)  but N. Sea, shutdown offshore globally, and Russia will not. The shale will produce an LNG glut again, and we will continue to see oil displacement by NG-LNG. That is 40% demand decline by the end of the decade. In the interim, oil prices will spike in 2021 and shale drilling will be a madhouse of activity.

PV sourced CH4 and later H2 (my choice for possible future aviation fuel depending on solutions for the storage weight problem) will come into play in Saudi, US SW, and Australia as incidental product at high excess electricity production peaks at mid-day and at high winds in the TX to Dakotas wind corridor, NW Australia and NW Europe (which is already heavily utilized). 

We will all die with plenty of accessible oil in the ground. 

War with China, if it does not abandon its ambitions,  will be preceded by an embargo composed of extra high oil prices for it and Russian supply at a trickle and Iran not producing any at all. Once Saudi has knocked Russian production off the map, China will pay a large premium for its oil. The destination for its navy is to be either be decommissioned and physically dismantled, or end up at the bottom of the S China sea in an actual shooting war. Its acquiescence will determine how much of its oil demand will remain after the initial rush of activity. 

I believe there is a limit on Lithium battery production capacity expansion not just from Cobalt capacity restraints, but also from a lack of crucible lining materials for the metallic Lithium. Iridium is well above its prior peaks at $1600/oz (down from $3k before) and the raw ceramic alumina crucibles are entirely consumed at high temperature by contact with Lithium, and tantalum coatings don't buy you that much more reuse. Alumina contamination in the purified Lithium is problematic.  There is also a need to shake China out of the Lithium mines it controls. Similarly for other key minerals it monopolized outside of China. Duplicating China's copper refining capacity and its supply of key rare metals is also critical so will have international backing. 

In the meantime, demand will be boosted by the supply chain duplication out of China to create regional and national security in all major countries or trading blocks. By the replacement of driving for air travel and public transport commuting - what remains of it will increase demand for oil to a point. I don't know to balance it out against telecommuting in forecast calculations to see which way this sums up, just too much uncertainty in the component numbers.  But generally, the outmigration out of the cities will accelerate substantially, and over time that has led to increased oil consumption. 

[D Coyne + 305]

2 hours ago, 0R0 said:

I think you are reading things incorrectly. First because the depletion is not happening as shut downs are. The oil is being capped offshore and will have to be partially redrilled as none of the designs considered a prolonged shutdown. Majors say the recovery will take about 2 years to get the oil moving out of the wells again. Shale is being throttled but apparently the consensus here is that it can be restarted in days rather than months. Some if not most of Russian output may be damaged for years to come through an output cut - not due to the OPEC++ agreement but through the simple fact that Saudi had aggressively bid to stuff all available global storage, specifically to force Russia to cut off the wells that can't come back. Venezuela is essentially off the map and will suffer civilizational collapse. Oil production is going to be down >10 mob/d for at least 2 years and of that 5 mob/d for the bulk of the decade, mostly from Russia.  Any resumption is not going to get you back to the old 2019 conventional production levels for the decade. 

That will have a huge effect on supply and demand balance in recovery from the shutdown. Shale will recover along with OPEC (Saudi)  but N. Sea, shutdown offshore globally, and Russia will not. The shale will produce an LNG glut again, and we will continue to see oil displacement by NG-LNG. That is 40% demand decline by the end of the decade. In the interim, oil prices will spike in 2021 and shale drilling will be a madhouse of activity.

PV sourced CH4 and later H2 (my choice for possible future aviation fuel depending on solutions for the storage weight problem) will come into play in Saudi, US SW, and Australia as incidental product at high excess electricity production peaks at mid-day and at high winds in the TX to Dakotas wind corridor, NW Australia and NW Europe (which is already heavily utilized). 

We will all die with plenty of accessible oil in the ground. 

War with China, if it does not abandon its ambitions,  will be preceded by an embargo composed of extra high oil prices for it and Russian supply at a trickle and Iran not producing any at all. Once Saudi has knocked Russian production off the map, China will pay a large premium for its oil. The destination for its navy is to be either be decommissioned and physically dismantled, or end up at the bottom of the S China sea in an actual shooting war. Its acquiescence will determine how much of its oil demand will remain after the initial rush of activity. 

I believe there is a limit on Lithium battery production capacity expansion not just from Cobalt capacity restraints, but also from a lack of crucible lining materials for the metallic Lithium. Iridium is well above its prior peaks at $1600/oz (down from $3k before) and the raw ceramic alumina crucibles are entirely consumed at high temperature by contact with Lithium, and tantalum coatings don't buy you that much more reuse. Alumina contamination in the purified Lithium is problematic.  There is also a need to shake China out of the Lithium mines it controls. Similarly for other key minerals it monopolized outside of China. Duplicating China's copper refining capacity and its supply of key rare metals is also critical so will have international backing. 

In the meantime, demand will be boosted by the supply chain duplication out of China to create regional and national security in all major countries or trading blocks. By the replacement of driving for air travel and public transport commuting - what remains of it will increase demand for oil to a point. I don't know to balance it out against telecommuting in forecast calculations to see which way this sums up, just too much uncertainty in the component numbers.  But generally, the outmigration out of the cities will accelerate substantially, and over time that has led to increased oil consumption. 

0R0,

interesting analysis, I am fairly sure neither of us can predict the future, I have tended to underestimate the resilience of oil production, looks like cobalt free Lithium batteries are a long way off, maybe 10 years or more. As the price of cobalt rises more resources may be developed.  Tight oil output crashes pretty quickly will no comletions down by 50% in 15 to 18 months and stripper well output of 750 kb/d in US will be shut in at current price levels, possibly as much as 1.5 Mb/d so that would be about 5.5 Mb/d, combined with cuts elsewhere in deepwater, etc along with OPEC+ cuts we might see World C+C output fall by 30%.

I think it may come back faster than you believe once oil prices start to rise due to shortages. 

We will have to wait to see how it plays out.

[Douglas Buckland + 6,308]

5 hours ago, Dg56 said:

Hi Doug, 

Lucky you were not a stone-age chief, your trobe would still be banging rocks...

"we are good at it, and we still have plenty of stones!" ☺ 

Good deflection! Now try answering my question rationally.

[Dan Clemmensen + 1,011]

3 hours ago, D Coyne said:

0R0,

interesting analysis,[...] Tight oil output crashes pretty quickly will no comletions down by 50% in 15 to 18 months and stripper well output of 750 kb/d in US will be shut in at current price levels, possibly as much as 1.5 Mb/d so that would be about 5.5 Mb/d, combined with cuts elsewhere in deepwater, etc along with OPEC+ cuts we might see World C+C output fall by 30%.

I think it may come back faster than you believe once oil prices start to rise due to shortages. 

We will have to wait to see how it plays out.

As seen from the outside, it looks like the global oil industry as a whole reacted late and failed to cut production aggressively when the demand collapse became inevitable, starting in (say) mid-February. I assume that were at least some folks who were smart and/or agile and/or lucky and started early enough to minimize the damage.  If the industry as a whole reacts late as consumption resumes, there will be a supply shortage, but the smart/agile/lucky folks will be in position to make a lot of money. I hope somebody somewhere will resume drilling to add to the DUC inventory, and be ready to complete those wells very quickly when the time comes. I don't know what the equivalent "prepare to resume" steps are in the rest of the industry.  I think the consumption recovery will be somewhat gradual, so there will probably be time to bring back production as excess storage is worked off.

[Jay McKinsey + 1,490]

2 hours ago, Douglas Buckland said:

Good deflection! Now try answering my question rationally.

In 1900 most scoffed at the idea that a newfangled horseless carriage would replace the horse.Automobiles were very rudimentary, expensive and had a lot of shortcomings. 

Fifth Ave New York 1900, how many horseless carriages do you see? 

 

New York Fifth Avenue 1913, how many horses do you see?