Why Oil could hit $100

[Old-Ruffneck + 1,235]

3 hours ago, Rob Kramer said:

Eia had a draw (oil and gasoline) prices rise and % of refining rise . So your theory says rigs should rise. Mine says until a well is profitable they'll go down. Gas is helping this tho so well see  at 2.50 and 48$ some could come back .

No, it takes more than a weeks of consumption to get rigs going from idled or stacked out to full tilt drilling. I am assuming you have not working in the oil fields or production end of oil. There are several old ruff-necks in here that may explain it better. And there is always google.

[Blackbag99 + 20]

14 hours ago, Rob Kramer said:

Texas rrc has a news article about a 79% drop in flairing vs last year. From 2bcf to .4bcf would be the ammount estimate.  But your correct it was at a 25 year low at 1.49$ few months ago. What are you saying by your observation? That theres too much or market prices are too low ? 

The world is awash with gas. It was used to temper the last fall in oil prices.

Flaring is wasteful. When you don't have cash you don't burn cash.

[Blackbag99 + 20]

On 8/7/2020 at 9:11 AM, dukeNukem said:

33-35$ is way too optimistic. For break even I mean full cost to produce barrel of oil (with all taxes, royalty, service debt e.t.c). The best proof for break-even about 55-60$ is cash flow and level of shale industry debt...Debt was only going up for the last 10 years 

Totally agree. 

Shale patch should not expect funding for expansion until they can service repayments, with balance sheet write downs that looks extremely unlikely. Where we are today there are still some that struggle with servicing the interest repayments.

[Rob Kramer + 696]

15 hours ago, Old-Ruffneck said:

No, it takes more than a weeks of consumption to get rigs going from idled or stacked out to full tilt drilling. I am assuming you have not working in the oil fields or production end of oil. There are several old ruff-necks in here that may explain it better. And there is always google.

I've never worked in oil production.  My dad worked in Alberta.  Probably sagd . He seems to think everything has a 20$ break even and 20 year reserves.  I realize it's not a week thing but we've had 3 weeks of draws. Going on 4 in 2 days . And about 6 weeks at 39$ wti. (Also six weeks of dropping rigs). Anyways as you said this takes time to play out. 

[Rob Kramer + 696]

4 hours ago, Blackbag99 said:

The world is awash with gas. It was used to temper the last fall in oil prices.

Flaring is wasteful. When you don't have cash you don't burn cash.

Alot of gas production is down 96 BCF in Nov 19. Now 89 BCF (with 1.5BCF of flairing removed / probably a bit less) so were down 7BCF  (+1.5) and oil rigs started dropping 3rd month and new wells are majority oil for most of a year before they go gassy then decline in gas. So end of this month will start the cliff of gas. I agree the tanks are above normal levels but awash means takes a while to work off ... not the case here deficit in production will remove the glut through this winter. Gas will be at a deficit for 2 to 3 years then back to glut is my best estimate. With 3 months left if we hit 86BCF well be 10BCF/d less than a year ago (with lower cad imports and greater mexico exports) so 300BCF extra in the tank takes 30 days. The tanks dont change in proportion to demand ... that's productions' job and it just bucked the trend. That's my opinion feel free to disagree.  Its months away so we will both have our answer. Also global drilling is at a low. I think we all agree all wells decline so I mean sooner than later there has to be a shortcoming in production.  I dont want to come off as a know it all but I am confident in my conclusions.  

[Rob Kramer + 696]

On 7/16/2020 at 7:55 PM, cbrasher1 said:

Rigs are coming out at end of the month and start of August, how many and how fast I do not know, I'm sure that will depend on how stable the price is and if it goes up some....

Just saw this from a notification. Very accurate as to what's happened . Brent ended 4 weeks in a row within a dime and popped last week a bit. Rigs have trickled down tho (in number) I think there moving total rigs to oily areas with faster payoffs and more gassy areas with low pumping costs (as opposed to mixed wells) .