Oil Prices To Skyrocket If U.S. Shale Stalls

Last nights headlines.  The writer slipped that word IF in there and the whole premise is IF Shale Stalls. Trying to create something from nothing and the writers past stories seem all to want to Jack up oil prices with Fear!! Traders that fall into misleading stories such as this are not well educated in the oil industry. The drop in rigs is money is tightening up yes, but you have 9000 DUC wells to be completed. 2 years plus to complete, so a slow down should be expected. Will production of 100,000bbd make a difference in 1 year? Probably not a great Skyrocketing effect on the whole scheme of the Permian. 

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Cunningham works for a DC think tank ASP that ponders the way to a more secure world.  Many big political types are part of ASP.  They have a very high opinion of themselves.  There is plenty of oil.  As the OPEC cartel's ability to price fix wanes, supply increases and prices stabilize in the low fifty's ( which will start Q4 2019) the cheerleaders will go away.

NATURAL GAS SHALE started in 2006 and picked up steam around 2010.  Before Natural Gas Shale took off US was paying $12 to $14 mm/btu.   Now it is $2.85 mm/btu and investment is going thru the roof.

OPEC/Saudi's desperate again today they plead with producers to cut more production.  Any US oil company that colludes should be charged with anti-trust violations.   Trump should keep his word regard OPEC oil price fixing and sign NOPEC when the bill hits his desk.

Oil will trade up going into summer driving season.  The May 8th Iranian waiver deadline is moving stock prices up.  Starting in Q4 prices will start their move to stabilize and balance  . . . .  in the low $50s.

 

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