wrs + 893 WS June 27, 2020 (edited) 1 hour ago, Ward Smith said: Actually, there are New Yorkers who would disagree, since the state banned fracking Blaming Trump for the lockdowns the states did is also wrong. There are multiple states which never locked down, such as South Dakota. But go ahead and vote for Biden, I'm sure things will get much better under him… It's a moratorium and I am not sure it can be upheld in the long run. The justification is weak. Out in West Texas and New Mexico where the Permian is being developed using the hated technique, there really aren't environmental concerns as used for justifying the moratorium in New York (there is no drinking water). As the the feds doing anything to stop it in Texas, they would have a harder time than New York did because they really have no jurisdiction. JMO Edited June 27, 2020 by wrs Quote Share this post Link to post Share on other sites
wrs + 893 WS June 27, 2020 (edited) 1 hour ago, Gerry Maddoux said: With all respect, you're wrong. All it would take is a bill passing a Democrat House and Senate signed into effect by the president. It's really not that simple. There has to be a justification and out in West Texas the basis they used in New York will not work (there is no drinking water). In New York it's a moratorium and they do not have a permanent ban in effect. Furthermore, what jurisdiction do the feds have? If the state doesn't ban it, the feds will have a hard time enforcing their law. Edited June 27, 2020 by wrs 1 Quote Share this post Link to post Share on other sites
Dan Clemmensen + 1,011 June 27, 2020 50 minutes ago, Rob Kramer said: I agree. But I'd say 515-530rigs + 315 frac spread count. Technically the rigs dont need to be there if theres ducs to frac. IMO oil and gas prices are going to do the opposite of what there doing now. But due to Nat gas being a bull market with oil should be like steroids for companies mabey even enough to have free cash flow fund the re growth instead of banks. Plus the pipelines are all there (well could reduce flairing but mostly). In addition to DUCs, you must consider refracks. DUCs and refracks together should be enough to get the completion crews back to work quickly while the next round of hopeful investors get up their courage to finance more drilling. I see no way to characterize NG as a "bull market" in the foreseeable future. I see a serious increase in demand as NG continues to replace coal, but I also see the NG market becoming increasingly global due to LNG, and I see several truly massive new sources coming onstream. (I have no inside information and no expertise. I'm just commenting on stuff I read here on OilPrice.) 1 1 Quote Share this post Link to post Share on other sites
Gerry Maddoux + 3,627 GM June 27, 2020 1 hour ago, wrs said: It's a moratorium and I am not sure it can be upheld in the long run. The justification is weak. Out in West Texas and New Mexico where the Permian is being developed using the hated technique, there really aren't environmental concerns as used for justifying the moratorium in New York (there is no drinking water). As the the feds doing anything to stop it in Texas, they would have a harder time than New York did because they really have no jurisdiction. Give me a break! The only reason the drillers in the Permian have been able to violate Texas RR Commission Statewide Rule 32 and vent NG more than 24 hours and flare more than 10 days is because the EPA has been silenced--allowing the RR Commission decided to ignore their own rulebook. A large part of why the glut occurred is because drillers who couldn't possibly have continued their mad lemmings dash to the sea were able to continue because they could vent and flare to their heart's content. You've enjoyed free rein in the Permian and the Delaware largely BECAUSE of President Trump. This would be substantially different under a President Biden (briefly) and unrecognizable under President just about anyone else. Besides, Texas is turning bluer than a squid, and Blue Dog Democrats are going to do pretty much what their Party tells them to do. I'm worried that Texas will surprise the world and go blue this October. If that happens, the shale basins can fold their tents. 1 Quote Share this post Link to post Share on other sites
wrs + 893 WS June 27, 2020 1 minute ago, Gerry Maddoux said: Give me a break! The only reason the drillers in the Permian have been able to violate Texas RR Commission Statewide Rule 32 and vent NG more than 24 hours and flare more than 10 days is because the EPA has been silenced--allowing the RR Commission decided to ignore their own rulebook. A large part of why the glut occurred is because drillers who couldn't possibly have continued their mad lemmings dash to the sea were able to continue because they could vent and flare to their heart's content. You've enjoyed free rein in the Permian and the Delaware largely BECAUSE of President Trump. This would be substantially different under a President Biden (briefly) and unrecognizable under President just about anyone else. Besides, Texas is turning bluer than a squid, and Blue Dog Democrats are going to do pretty much what their Party tells them to do. I'm worried that Texas will surprise the world and go blue this October. If that happens, the shale basins can fold their tents. The same thing was going on during the Obama administration or did you forget lower for longer? Quote Share this post Link to post Share on other sites
Blackbag99 + 20 TB June 27, 2020 (edited) On 6/26/2020 at 8:59 PM, Ward Smith said: V12 jeep? Doubt it seriously. Maybe you mean V8? Even the 700hp trackhawk only has a V8 engine Limited had two versions 4.8 V8 & 6.2 ?? After 2004 they made it ugly Edited June 27, 2020 by Blackbag99 Quote Share this post Link to post Share on other sites
Rob Kramer + 696 R June 30, 2020 On 6/27/2020 at 2:23 PM, Dan Clemmensen said: In addition to DUCs, you must consider refracks. DUCs and refracks together should be enough to get the completion crews back to work quickly while the next round of hopeful investors get up their courage to finance more drilling. I see no way to characterize NG as a "bull market" in the foreseeable future. I see a serious increase in demand as NG continues to replace coal, but I also see the NG market becoming increasingly global due to LNG, and I see several truly massive new sources coming onstream. (I have no inside information and no expertise. I'm just commenting on stuff I read here on OilPrice.) Fair enough. In one way your correct (in my veiw) globally prices are more aligned than ever. But drilling is not profitable under 3$ globally and neither is LNG. So from our current stand point of 1.75$ that's more bullish than bearish. Also with low prices comes reduced rigs , shut ins, canceled LNG deliveries, demand increase, production decline ect. So I might be early calling this winter the start of a bull market but the low price is it's own cure IMO. But unlike oil the wells and politics arnt so quick to react. I dont know the size and start dates vs demand so I cant comment on global projects 2 1 Quote Share this post Link to post Share on other sites
Top Oil Trader + 469 JJ July 1, 2020 i stopped trading oil a while ago, when i found much risker and rewarding investments, however i look at oil from time to time, for trading ideas, use your own intellect. . So today we see brent at 41-42, next move up will hit 54. And lots of volatility when it will reach 60s, this will be where there will be lots of confusion, and all the people who said oil would hit 10 again, or lower, willl come out of woodwork againas the have since oil crased below 0, and constantly been proven wrong over and over 100s of times, and will tell you this will be the last spike, and predict then end of oil. This will be advice from the big banks, the regular so called experts we see on tv all the time, who only get it right when indeed there is a bear market, and as it goes down, the predict lower prices, since its easy to predcit prices to go where they have been but its risky and much harder to predcit new levels for prices, which requires skill and intellect, but qualities missing from most talking heads, and gurus. But fundamentally, here is the twister. Yes people are not working etc, but the world still needs oil, all over the world. The future epidemics will be even worse than now, closures will be even worse, protests even worse, all this will put pressure on oils production, raising the price. More wars or two, though right now war is between India/China US/ISRAEL/TURKEY against Syria/Russia. China/ HongKong maybe China/Taiwan, Saudi/Yemen, US/Venezuela US/ISRAEL vs iRAN/RUSSIA maybe skirmishes soon between US/China all will slow production and distribution spiking price even further. Still maintaining $100 price target. 3 1 Quote Share this post Link to post Share on other sites
Top Oil Trader + 469 JJ July 1, 2020 exactly lots of producers wont produce will which lower the supply by 50%, increasing prices by 50% so 40*50% = $60 price point and then with added disruptions we could see 100 Quote Share this post Link to post Share on other sites
Rasmus Jorgensen + 1,169 RJ July 2, 2020 On 6/27/2020 at 6:37 PM, Tomasz said: Super bull wave coming eventually? In offshore we have hoped for recovery for 6 years now... Hope is not a strategy. There are also bearish indicators - lower overall economic activity. Less private and business travel. Less business travel is happening and will seriously alter the travel business. 2 Quote Share this post Link to post Share on other sites
Omega man + 3 JW July 2, 2020 Do you know how much oil is needed to manufacture 2 billion rubber gloves?? Masks and other pharmacy items ???? Between the inflation that’s coming and rig count and how shale wells Peter out I see $150 again easily 1 1 Quote Share this post Link to post Share on other sites
Dan Clemmensen + 1,011 July 2, 2020 4 hours ago, Omega man said: Do you know how much oil is needed to manufacture 2 billion rubber gloves?? Masks and other pharmacy items ???? No, but I can make a rough estimate. 200 Nitrile gloves weigh less than a pound. A barrel of crude weighs more than 300 pounds. let's guess that we can convert two pounds of crude to one pound of nitrile, so a bbl will make at least 150x200=30000 gloves. 2 billion gloves will take less than 66,000 bbl. Current (pre-pandemic) oil production is about 100 million bbl/day. So those 2 billion gloves will take 66/100,000 of one day's production, or just less than one minute of global crude production. 1 1 1 Quote Share this post Link to post Share on other sites
Old-Ruffneck + 1,207 er July 7, 2020 About the only thing to spike oil short term 100$ is an all out war. Still holding my estimate at 60 by end of September. Thinking i might be little over, but it will inch slowly back up. Patience!!! 2 1 Quote Share this post Link to post Share on other sites
Rob Kramer + 696 R July 7, 2020 I think 60$ by dec 2020 also and by Dec 2021 140$ (both brent). Theres a big shortage coming. We have oil going from 13.1 to 10M b/d and nat gas going from 97bcf/d to 84bcf/d. I dont think 30% less oil will be used in 2021. Or 13% less gas . EIA data for 2019 showed 80% of energy used in USA was fossil fuels. That includes nuclear hydro and renewables as the other 20% . Hard to say fossil fuels are dead when you weigh them as a total in energy mix. 4 1 3 Quote Share this post Link to post Share on other sites
Gerry Maddoux + 3,627 GM July 8, 2020 You may well be right. With the Dakota Access Pipeline ordered to be shut down, and with the water/earthquake/rapid decline problems in the SCOOP/STACK, the only shale will be Permian and Eagle Ford. It sounds as though the Bakken is a stranded asset. The Permian is productive, but has a limit. The Eagle Ford may already be in decline. Offshore is faltering. Yes, I can easily see $140 oil by December 2021. At that point it's pretty well whatever OPEC wants to charge because there will likely be a perpetual shortage, unless renewables come on faster than they have. 2 Quote Share this post Link to post Share on other sites
Jan van Eck + 7,558 MG July 8, 2020 On 7/2/2020 at 11:01 AM, Omega man said: Do you know how much oil is needed to manufacture 2 billion rubber gloves?? Masks and other pharmacy items ???? Between the inflation that’s coming and rig count and how shale wells Peter out I see $150 again easily Those gloves are not made of oils. The source material is shale gas, from which propane is extracted. The propane is converted to propene, then polymerized into polypropylene, that in turn is converted into acrylonitrile monomer, which is co-polymerized with butadiene and the resulting co-polymer can be formed into a wide range of industrial products, including nitrile gloves. I suspect the big tonnage is the manufacture of "rubber hose" as you see in car coolant systems, and various drive belts. If it is further polymerized with styrene then you get the engineering plastic known as "ABS," which has large applications, and is manufactured to a wide array of specifications, typically for flow rate characteristics. Another good reason to keep the shale fracking going! 3 2 4 Quote Share this post Link to post Share on other sites
Jan van Eck + 7,558 MG July 8, 2020 On 6/27/2020 at 12:37 PM, Tomasz said: That means less subways & bus rides & less car pooling. More cars on the road means much more demand. No chance. Along the East Coast USA there is no excess capacity for road traffic for commuters. I suspect the same for LA and Frisco, probably not much different for Chicago. Roadway capacity is quite limited. For example, the 2-lanes-each-direction I-95 running out of New York through Connecticutr was designed for 40,000 vehicle movements per day. At the last counting some two decades ago it was up to 161,000 vehicle movements per day. They put up these electrtonic billboards for traffic info, all they were reading (before C-19) was bad, to awful, to abysmal, to standing still. Now, if the commuters refuse to use the Metro North trains, and insist on cars, where are those cars going to run? There is no more free asphalt. And when you get to the City, there is zero parking. So, hopeless. What is possibly going to happen is that commuters are ging to be perpetually masked and gloved. But they will still be riding those trains - which, by the way, are short of capacity, chronically over-crowded, and standing-room-only during that dreaded morning rush hour (which starts at 6:00 a.m. and continues to 9:30 a.m.). Or. commuters are going to discover the wonders of the motorcycle 🤣! 1 1 Quote Share this post Link to post Share on other sites
El Nikko + 2,145 nb July 8, 2020 12 hours ago, Gerry Maddoux said: You may well be right. With the Dakota Access Pipeline ordered to be shut down, and with the water/earthquake/rapid decline problems in the SCOOP/STACK, the only shale will be Permian and Eagle Ford. It sounds as though the Bakken is a stranded asset. The Permian is productive, but has a limit. The Eagle Ford may already be in decline. Offshore is faltering. Yes, I can easily see $140 oil by December 2021. At that point it's pretty well whatever OPEC wants to charge because there will likely be a perpetual shortage, unless renewables come on faster than they have. Regarding Saudi in particular It appears that they have never had the production capacity to pump so much since they opened up the taps. I can't see shale rebounding to the same production highs again either so we could be in for a hell of a crunch at some point due to the low CAPEX over the last few years. 1 1 2 Quote Share this post Link to post Share on other sites
Gerry Maddoux + 3,627 GM July 8, 2020 I believe the natural assumption out there is that there will be an oil shock, then shale will pick up again as a swing producer, as will production from all over the world, and the price will fall, and that such volatility will be the modus operandi until the end of oil demand. I'm not sure this is a correct model. Libyan production capabilities have been damaged. Venezuela is down to one rig. Small shale drillers are going to have a near-impossible task of getting funding and the large companies have shrinking share value and a threatened dividend. I have some serious questions about KSA, OPEC in general, and even more about Russia. Iran has a lot of oil but it's likely secretly contracted to China. The big find off Guyana is so gassy it's problematic. The U.S. stripper wells are mostly toast. Net/net: we may have a modest but persistent oil supply shortage during the waning years of oil demand. This may be just the push the renewables market needs in order to "take over," which I don't personally think is going to make much difference in global climate change but will make a lot of people feel better. We will at some point come right up against what the true cost of going green really is: when the price of oil finds a more realistic price point for a precious commodity that took a million years to produce, at just the right temp and pressure. I have said for some time that if you roll an oil barrel into a Starbucks and have them fill it with latte--keep in mind that it's easy to grow coffee beans yearly with little sophistication and equipment--it would cost you roughly $3,700. The Gold-Oil ration has long been used as an index of which commodity is cheap and which is high, but not the Latte-Oil ration. While the Green Revolution has grown like a weed using overproduced and undervalued oil, we may be about to see how it does under a Latte-Oil reset (cheaper coffee, pricier oil). There are two existential possibilities and they can't both be right: 1) continued advancement of civilization and improved standards of care and life for more and more people in the world--which would increase the need for oil, or, 2) some sort of self-destructive epoch whereby there is a mass shift to AI in enterprises run by a very few, resulting in a throwaway mass human population (nothing to do)--a dystopian mess plagued by revolution, rioting, looting, and a rapid reset of the very principles of civilization (the stuff that the "modern Nostradamus," Yuri Bezmenov, warned about). I would say to the extreme members of the Green Revolution: be careful what you wish for. And to the younger generation so angry about how badly our generation messed up the planet: I imagine your actions are going to produce a whole new set of unwanted consequences. Sorry, I didn't mean this to be more than putting forth the Latte-Oil ratio yet again, but it turned into a sermon. This sort of thing has to be the very stuff of dementia (all old presidential candidates should beware going off on tangents). 2 1 1 Quote Share this post Link to post Share on other sites
Rasmus Jorgensen + 1,169 RJ July 11, 2020 On 7/2/2020 at 5:01 PM, Omega man said: Between the inflation that’s coming and rig count and how shale wells Peter out I see $150 again easily https://splash247.com/valaris-scraps-three-young-drillships-originally-ordered-for-2-25bn/ Wake up and small the coffee amigo... Quote Share this post Link to post Share on other sites
Rasmus Jorgensen + 1,169 RJ July 11, 2020 (edited) deleted. qouted the worng person. Edited July 11, 2020 by Rasmus Jorgensen Quote Share this post Link to post Share on other sites
0R0 + 6,251 July 12, 2020 On 7/7/2020 at 10:05 PM, Jan van Eck said: No chance. Along the East Coast USA there is no excess capacity for road traffic for commuters. I suspect the same for LA and Frisco, probably not much different for Chicago. Roadway capacity is quite limited. For example, the 2-lanes-each-direction I-95 running out of New York through Connecticutr was designed for 40,000 vehicle movements per day. At the last counting some two decades ago it was up to 161,000 vehicle movements per day. They put up these electrtonic billboards for traffic info, all they were reading (before C-19) was bad, to awful, to abysmal, to standing still. Now, if the commuters refuse to use the Metro North trains, and insist on cars, where are those cars going to run? There is no more free asphalt. And when you get to the City, there is zero parking. So, hopeless. What is possibly going to happen is that commuters are ging to be perpetually masked and gloved. But they will still be riding those trains - which, by the way, are short of capacity, chronically over-crowded, and standing-room-only during that dreaded morning rush hour (which starts at 6:00 a.m. and continues to 9:30 a.m.). Or. commuters are going to discover the wonders of the motorcycle 🤣! Uber and Lyft, but mostly Work From Home. The gain in efficiency from avoiding those traffic conditions is finally available, not to speak of the savings in real estate. Then you can hire abroad and out of town, thus foregoing the city job premium ($40k in CA for example, nearly $100k for some Silicon Valley locations). I don't believe the traffic on those NE corridor roads will ever return. The traffic in exurbia will go through the roof as people go to shop and ferry kids as families move there out of cramped urban dwellings. But the office job in the center of the city has likely been dealt a permanent death blow. Initial reports from the NYC metro real estate market are of an 18% drop in residential city real estate prices. And a 6% drop in rents, and much increased vacancies. Not good news for the banks or for the REITs, commercial space is going to be hurt that much more badly. On retail and office space. There is already a rush to hire directly abroad without needing to rent or build office infrastructure. Unfortunately for corporations, they don't really save that much since these people are already paid a good proportion of their equivalent US pay, Where these folks are still cheap is in areas with weak infrastructure for electricity and telecom, like India. The bulk of individuals available there need to go to an internet connected office away from home, since the cell phone connections don't support that much broadband throughput at a reasonable price, if at all. Tech recruiters have seen their domestic US business evaporate during CV19 as this rush picked up. However, the workers available are not necessarily first rank caliber, as those are already working for local companies at wages not much lower than their US counterparts. While many would jump ship to get a US sourced job, they are likely to do so with only a big rise in income. It will be interesting to see how this develops. But Trump's H1B and immigration crackdowns on the basis of competition with US workers has become an entirely moot point. What little barrier there had been for foreign workers in tech being employed abroad by US firms before, there is none remaining now. If the US labor pool is missing >4 mil techies (mostly coders), then China is lacking for nearly 40 million. Europe is no different, though it had a smaller deficit because of less demand from a narrow technology sector. There is hardly a product outside of food furniture and clothing that does not have an embedded technology component that needs to be programmed and checked for operational bugs and security breaches. Even homes and furniture do often contain some tech. 2 Quote Share this post Link to post Share on other sites
0R0 + 6,251 July 12, 2020 On 7/8/2020 at 9:52 AM, Gerry Maddoux said: There are two existential possibilities and they can't both be right: 1) continued advancement of civilization and improved standards of care and life for more and more people in the world--which would increase the need for oil, or, 2) some sort of self-destructive epoch whereby there is a mass shift to AI in enterprises run by a very few, resulting in a throwaway mass human population (nothing to do)--a dystopian mess plagued by revolution, rioting, looting, and a rapid reset of the very principles of civilization (the stuff that the "modern Nostradamus," Yuri Bezmenov, warned about). I would say to the extreme members of the Green Revolution: be careful what you wish for. And to the younger generation so angry about how badly our generation messed up the planet: I imagine your actions are going to produce a whole new set of unwanted consequences. Was just reading an article about the technological progress and productivity of automation applications and it draws an entirely different picture. Technology is producing more jobs, not less. But the supporting system is not producing the skills necessary for those employees and employers, and regulations strangle new large scale business operations thus raising costs and limiting compensation available to employees to fund their specialized training - or for employers to fund it. . https://www.city-journal.org/html/technology-destroying-labor-market-15829.html The dystopian technologists are viewing their innovative work as orders of magnitude more important and its adoption farr quicker than it actually is. AI is several generations away from useful implementation for anything beyond the most basic tasks, and big job killers like automated driving are still far from an impending reality as in most cases you need the person inside the vehicle at both ends of their drive and during the drive itself (article gives the example of school bus drivers, who's job is mostly keeping the kids from tearing each other up.yet this was counted in a popular study on automation displacement of jobs). 1 2 Quote Share this post Link to post Share on other sites
Enthalpic + 1,496 July 12, 2020 On 7/8/2020 at 7:52 AM, Gerry Maddoux said: I believe the natural assumption out there is that there will be an oil shock, then shale will pick up again as a swing producer, as will production from all over the world, and the price will fall, and that such volatility will be the modus operandi until the end of oil demand. There are two existential possibilities and they can't both be right: 1) continued advancement of civilization and improved standards of care and life for more and more people in the world--which would increase the need for oil, or, 2) some sort of self-destructive epoch whereby there is a mass shift to AI in enterprises run by a very few, resulting in a throwaway mass human population (nothing to do)--a dystopian mess plagued by revolution, rioting, looting, and a rapid reset of the very principles of civilization (the stuff that the "modern Nostradamus," Yuri Bezmenov, warned about). I would say to the extreme members of the Green Revolution: be careful what you wish for. And to the younger generation so angry about how badly our generation messed up the planet: I imagine your actions are going to produce a whole new set of unwanted consequences. Sorry, I didn't mean this to be more than putting forth the Latte-Oil ratio yet again, but it turned into a sermon. This sort of thing has to be the very stuff of dementia (all old presidential candidates should beware going off on tangents). Ha that describes current events in the US perfectly. Quote Share this post Link to post Share on other sites
Tomasz + 1,608 July 12, 2020 According to Art Berman's calculations, shales pay off at a breakeven of 55-65 dollars Then you should add some $ 5 transport costs to the WTI price and some $ 5 discount from the WTI price to the Brent price. So it gives us a Brent oil breakeven price of something like 65-75 dollars. However, given the lack of investment in the oil sector since 2014, apart from shale oil, I personally think that when the problem with COVID is resolved, which rather did not prove to be as deadly as it was announced, taking into current drilling activity around the world I expect for at least next 3 years the price of oil and natural gas should increase. 3 5 Quote Share this post Link to post Share on other sites