Shales Death Blow?

[wrs + 893]

10 minutes ago, James Regan said:

CANNON BALL COMING - THIS IS ALMOST LAUGHABLE - HAR FAR WILL SHE GO?

 

Does it matter? This is purely financial.  If anyone is selling oil this cheap they are stupid, stupid, stupid.  People selling short are selling oil they don't have with a promise to deliver it.  This is going to blow up big time.

Edited April 20, 2020 by wrs

[Douglas Buckland + 6,308]

12 minutes ago, wrs said:

Texas is built on oil.  It diversified after the 80s but if you don't think oil is the most important business in Texas then you don't understand Texas at all.

That does not necessarily indicate that frackers represent the entirety of Texas.

[wrs + 893]

Just now, Douglas Buckland said:

That does not necessarily indicate that frackers represent the entirety of Texas.

Oh sure, there are ranchers and farmers and plenty of other businesses but the biggest contributor to the Texas economy and the state coffers is oil.

[Douglas Buckland + 6,308]

10 minutes ago, wrs said:

Oh sure, there are ranchers and farmers and plenty of other businesses but the biggest contributor to the Texas economy and the state coffers is oil.

And all ‘oil’ will vote as a block?

[wrs + 893]

2 minutes ago, Douglas Buckland said:

And all ‘oil’ will vote as a block?

Votes don't matter, it's who is counting them that matters.   Think what you will.  I am a 5th generation Texan.  Yes we have been invaded by left coasters but they will be leaving soon.

[RSD + 41]

5 hours ago, 0R0 said:

Only that Iran would be stuck there just the same as everyone else. What they would do is a repeat of the missile and drone attack on Saudi. With whatever consequences they can get that way. They would gladly cut off the straights of Hormuz if they had the Russians make a financial commitment, but I very much doubt they would get one, nor that any of their relationships outside of Russia would survive the episode. 

The Straits of Hormuz is an interesting situation right now - Uncle Sam's Canoe Club has two carrier battle groups parked in the Arabian Sea just outside the straits with the mission of keeping the straits open for seaborne trade.  Obviously right now the quickest way to get the oil price up would be to let Iran close the straits, and it would be the ultimate F You to the Saudis if America let them do it.  But the Iranians might realsie that their best bet to get someone more moderate in the White House who they can build a relationship with might be to let the oil flow out of the gulf to keep the price right down and bankrupt shale oil producers... strategy games... strategy games...

[James Regan + 1,776]

DONT WORRY ITS PURELY FINANCIAL...... CONTRACTS CHANGE TOMORROW BUT A FEW MORE WEEKS UNTIL OPEC+ MAKES ITS CUTS, MAY GO NEGATIVE TOMORROW.

Edited April 20, 2020 by James Regan

[wrs + 893]

4 minutes ago, James Regan said:

DONT WORRY ITS PURELY FINANCIAL......

I don't know if you understand how this works.  That is the price for the contract that expires tomorrow.  The June contract is sitting at $23.  It is indeed purely financial.  What will matter is how the June contract trades after tomorrow.

Edited April 20, 2020 by wrs

[James Regan + 1,776]

Just now, wrs said:

I don't know if you understand how this works.  That is the price for the contract that expires tomorrow.  The June contract is sitting at $23.

READ ABOVE, ROUGH IDEA

[wrs + 893]

Just now, James Regan said:

READ ABOVE, ROUGH IDEA

This is why futures markets don't really work.  

[James Regan + 1,776]

OMFG- Free Oil.....

[Wombat + 1,028]

On 4/20/2020 at 4:17 AM, Gerry Maddoux said:

I've read all the above articles. At current prices, no one can remain standing for long. The Saudi prince had his own brother--the true heir apparent to the throne--put under house arrest just before he put his wild price scheme to work. Putin is making a buck a barrel. In Saudi Arabia, there must surely be palace coups being put together, because when you figure in their welfare state requirements, they're currently losing a massive sum of money each day. Iran is dying on the vine--and extremely desperate and dangerous. Venezuela is kaput for many reasons, as is Brazil. Mexico is well on its way. The Vaca Meurto in Argentina can't really get going. Shale is pretty much closing up shop. Canadian oil sands is almost gone. 

When a situation looks this dire, it is either going to be pronounced dead, or something big is about to happen. If you read OP.com, this is the death of shale, Tesla is the car of the future, renewables are taking over, and gee aren't the cities clean and shiny now that the Covid-19 has forced us all out of our gas-guzzlers and into our caves.

Yet the Saudis are pulling some very ballsy gambits: price war, pedal to the metal production, buying almost $2B of Total, BP, ENI, Equinor. They're obviously expecting much higher prices. What do those clever fellows know?

Damned if I know, but it's something. And I also am fairly sure that there are a bunch of guys who are going to want to drill out the shale, once the price comes up above starvation wages. This is not the end of oil. Not unless vast numbers of people die. There for a while I thought maybe this was actually the Big One--the flu of 1918 come back to collect a quarter of the world population. But it doesn't appear to be--it's taking mostly the feeble and obese and the drinkers and hypertensives, not to mention a couple of my favorite song-writers. That's not for nothing but the oil-consuming crowd is going to want to kick some serious ass once this virus is vanquished. They're going shopping, big time, and they're going to fly and drive and party like it's 1955. 

In shale we're going to have a bad year or so. But then it's going to come back--only now there are going to be responsible spacings (4-6 wells per pad) in most areas, gas-lifting is going to become a standard of utilization, as are refracks in certain areas. LNG is set to soar. Unless we have another Great Depression, oil is going to find a level where producers all over the world (read the Saudis) can make a reasonable sum. That level is roughly $80 Brent and $70 WTI. At that level, everyone gets to eat. So if you've got some nice royalties, I wouldn't exactly go off half-cocked and sell them on one of those little internet auctions if I were you. Who knows? There may be life after death. 

I hate to tell u this Gerry, but LNG glut almost as bad as oil glut, and will become much worse over next 2-3 years, even as oil recovers slightly. It is not just O&G that has been overproduced last few years, it EVERYTHING! All commodities, all manufactured goods, all bought with crazy amounts of debt thanks to decade of zero rates. Our problems are far deeper than just the CV you know?

[Wombat + 1,028]

22 hours ago, RSD said:

The Straits of Hormuz is an interesting situation right now - Uncle Sam's Canoe Club has two carrier battle groups parked in the Arabian Sea just outside the straits with the mission of keeping the straits open for seaborne trade.  Obviously right now the quickest way to get the oil price up would be to let Iran close the straits, and it would be the ultimate F You to the Saudis if America let them do it.  But the Iranians might realsie that their best bet to get someone more moderate in the White House who they can build a relationship with might be to let the oil flow out of the gulf to keep the price right down and bankrupt shale oil producers... strategy games... strategy games...

Actually RSD, u not even close. KSA and Iran just "bit players" now, no longer relevant. U shld read more about the China-Russia alliance. That is where the real action is now. They plan to make the USA obsolete b4 long. They are playing "the long game"?

[Mg1 + 3]

On 4/19/2020 at 9:44 AM, James Regan said:

Okay dont want to get into a Shale fight, I just saw this report and the bold part jumped out at me, can anyone explain if there rigs are different in set up or is it just terminology being used by publisher?

These active drilling rigs included 438 oil rigs operating in the US oil fields, down by 66 from the previous week; 89 gas drilling rigs, down by seven; and two miscellaneous rigs, unchanged from last week.

Of them, 28 are directional drilling rigs, 483 are horizontal drilling rigs, and 18 are vertical drilling rigs.

This distinction is by final product, not by the rig type itself. You need heavier/more capable rig to drill deeper wells, so you may need a more powerful machine to drill a horizontal well (especially if it is extended reach) than a vertical well, but if the vertical well is deep enough then still need a heavy rig to handle the weight of deep casings. Same thing for oil and gas rigs - no difference in machinery, put a “gas” rig to drill on an oil prospect, and it will become “oil” rig.

[El Nikko + 2,145]

2 hours ago, Mg1 said:

This distinction is by final product, not by the rig type itself. You need heavier/more capable rig to drill deeper wells, so you may need a more powerful machine to drill a horizontal well (especially if it is extended reach) than a vertical well, but if the vertical well is deep enough then still need a heavy rig to handle the weight of deep casings. Same thing for oil and gas rigs - no difference in machinery, put a “gas” rig to drill on an oil prospect, and it will become “oil” rig.

The terminology looks like they're splitting the rig count into groups of well type rather than rig type; vertical, directional (probably inclined?) and then horizontal which are also directional...It doesn't really make much sense unless I'm missing something

[Mg1 + 3]

4 hours ago, El Nikko said:

The terminology looks like they're splitting the rig count into groups of well type rather than rig type; vertical, directional (probably inclined?) and then horizontal which are also directional...It doesn't really make much sense unless I'm missing something

You are right, these are not rig types, these are types of wells that rigs drill. Choice of words which does not make sense for drillers, but is good enough for everybody else. Same rig can happily drill a vertical, deviated or horizontal well up to a point where its mechanical capabilities become insufficient, then one picks a bigger rig - which again can drill vertical or deviated. And of course there is zero difference in rig specs that are needed to drill for gas or for oil, provided wells are of similar shape and depth.

Edited April 21, 2020 by Mg1

[RSD + 41]

On 4/21/2020 at 9:36 PM, Wombat said:

Actually RSD, u not even close. KSA and Iran just "bit players" now, no longer relevant. U shld read more about the China-Russia alliance. That is where the real action is now. They plan to make the USA obsolete b4 long. They are playing "the long game"?

KSA is still relevant as they can easily ramp up to 13.5 million barrels a day whenever they want to, the Iranian oil industry isn't relevant, but Iran's ability to shut the straits and start flinging missiles and rockets is still very relevant.

[SGT-Craig + 2]

Correct me if I am wrong but surely Texas has fracking. (No I'm not being rude).

My point is if oil companies go under this does not help Texas and reelection.

[Dg56 + 16]

20 minutes ago, SGT-Craig said:

My point is if oil companies go under this does not help Texas and reelection.

Thousands are losing their job. Investors (including mom&pops) have lost B$. Reelection, that's all you can think of? Really?