No Dumping Allowed - latest from Mike Shellman

Presented without my usual comments, for your consideration.  You will most definitely not find this on Mainstream Media:

No Dumping Allowed

In December of 1998 the price of oil in America had fallen 50% the previous 11 months and was  below $10 per barrel. A group of stripper well operators from the Oklahoma-mid-continent area, suffering financially from low product prices, formed an organization called Save Domestic Oil, Inc. (SDO) and filed a petition before the United States Department of Commerce against  Venezuela, Iraq, Mexico and the Kingdom of Saudi Arabia under Section 701 of the United States Tariff Act of 1930.

Section 701 covers what in international trade is called, "anti-dumping". In a nutshell,  dumping essentially means unloading a product on the market at an unfair price to cause harm to others. Save Domestic Oil, Inc. believed the countries named in the petition were exporting oil to the United States at a lower price than it could actually be produced, thereby harming American stripper well operators. SDO referred to this as unfair trade practices.

The petition  was  quickly and decisively dismissed by the Department of Commerce for lack of support from large integrated US oil corporations, fears of international retaliation, opposition by both the Clinton Administration and American refiners dependent on imports to meet product demand. The DOC decision was appealed by  SDO and major integrated companies in the US, like Chevron, Shell and Exxon were drug into the appeal. The DOC's initial ruling was upheld  and the entire thing  ultimately disappeared, including SDO itself.

The founder and Chairman of Save Domestic Oil, Inc. in 1999 is now the CEO of the largest shale oil producer in the Bakken and one of the largest LTO producers in the United States. He is big buds with the President of the United States and has likely directly or indirectly influenced US energy policies, specifically crude oil and natural gas issues. He considered himself, his corporation and the entire shale oil industry to be a great "threat to OPEC" when he strongly advocated for lifting the 40 year old oil export ban in the US starting January, 2015.   

... (more in the link)       

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Tom/Mike, I appreciate the situation that shale oil is in but what can be done? Are we going to see the bearings on the hamster wheel melt or are we going to see another "too big to fail " scenario complete with a bailout? Something has to give if what we are being told is accurate. 

Anybody out there have a crystal ball?

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13 minutes ago, MUI said:

Tom/Mike, I appreciate the situation that shale oil is in but what can be done? Are we going to see the bearings on the hamster wheel melt or are we going to see another "too big to fail " scenario complete with a bailout? Something has to give if what we are being told is accurate. 

Anybody out there have a crystal ball?

$50 WTI seems to be the centerpoint for self-controlling WTI overproduction.

https://community.oilprice.com/topic/4652-happy-dance-us-shale-oil-slowdown/?do=findComment&comment=41944

 

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Looks like Saudi is continuing to cut production and is planning to produce only 9.8mmbbl/day in March.  This is very odd. Could it be that they pushed things too hard last fall and are suffering technical repercussions in their fields?  I know that if you let the shale wells flow too fast early that they release the formation pressure too quickly and leave a lot of oil trapped.  According to the best operator I know out there and the one who has managed my best wells, maintaining formation pressure is very important and overproducing at the start of the well life decreases formation pressure without the benefit of much additional production.  He tends to bring peak output in about the third month of his wells and maintains that level for several months after that.  

I really don't know much about Saudi production other than they pressure their fields artificially with water and nitrogen.  I also know they continue to claim 270GB of reserves year in and year out................

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