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(edited)

Hello All!

I have been away due to some health issues but now as I have recovered considerably...time is ripe to start anew.

Interesting times for oil markets. While the prices hinge on a certain level the opinions and possibilities are, on the contrary, galore! Where will oil go from here? ( @William Edwards---your insightful comments are required! )

Will it head further north ( @Tom Kirkman--- Your prognostication was true! What fate do you see for the prices now? ) or decide to settle down a little lower? ( @Marina Schwarz---"Oil at $40", very interesting indeed! So you don't see a supply shock ) OR will it settle at all? ( @ATK, @ceo_energemsier, @Top Oil Trader, @Keven Tan---let's explore! )

Among the cacophony of factors 'concerns regarding future supply' remain a common theme. Below is an article presents a good overview vis a vis Shale production.

 

Link: https://oilprice.com/Energy/Energy-General/The-Undeniable-Signs-Of-A-Shale-Slowdown.html

 

Edited by Osama
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Hey Osama, good to see you're back and feeling better!

I think there's a good chance that OPEC+ will end the cuts in June, which will bring Brent closer to $60 again. Not so sure about $40, what with all the oil sanctions. But we'll see. I like surprises.

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2 minutes ago, Marina Schwarz said:

Hey Osama, good to see you're back and feeling better!

I think there's a good chance that OPEC+ will end the cuts in June, which will bring Brent closer to $60 again. Not so sure about $40, what with all the oil sanctions. But we'll see. I like surprises.

Marina, thank you!

Yes, Russia has already hinted that further cuts might not be necessary.

Well $40...imagine the deal ends, trade negotiation fails badly and "concerns regarding global economic growth" (the most recurring headline for international media lately) ---these can bring it further down (talking about WTI).

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Would anyone be the least bit surprised if I stick with a longer term annual average of $70 Brent for this year?  (2018 Brent averaged $71, so my opinion for 2019 is hardly shocking.)

Short term price fluctuations are, ... um ... short term ... and they tend to fluctuate ...

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I do not see KSA shooting itself in the foot with their expectations for their budget, so I believe cuts will continue or even the Saudis carry the load alone? Global demand is still high currently, so I think(and hope) we continue in the current price range which is a level both producer and consumer can function with.

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1 hour ago, cbrasher1 said:

I do not see KSA shooting itself in the foot with their expectations for their budget, so I believe cuts will continue or even the Saudis carry the load alone? Global demand is still high currently, so I think (and hope) we continue in the current price range which is a level both producer and consumer can function with.

Oh happy day!  A comment ^ after my own heart!

 

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5 hours ago, Tom Kirkman said:

Would anyone be the least bit surprised if I stick with a longer term annual average of $70 Brent for this year?  (2018 Brent averaged $71, so my opinion for 2019 is hardly shocking.)

Short term price fluctuations are, ... um ... short term ... and they tend to fluctuate ... 

Well that will be interesting!

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8 hours ago, Osama said:

Hello All!

I have been away due to some health issues but now as I have recovered considerably...time is ripe to start anew.

Interesting times for oil markets. While the prices hinge on a certain level the opinions and possibilities are, on the contrary, galore! Where will oil go from here? ( @William Edwards---your insightful comments are required! )

Will it head further north ( @Tom Kirkman--- Your prognostication was true! What fate do you see for the prices now? ) or decide to settle down a little lower? ( @Marina Schwarz---"Oil at $40", very interesting indeed! So you don't see a supply shock ) OR will it settle at all? ( @ATK, @ceo_energemsier, @Top Oil Trader, @Keven Tan---let's explore! )

Among the cacophony of factors 'concerns regarding future supply' remain a common theme. Below is an article presents a good overview vis a vis Shale production.

 

Link: https://oilprice.com/Energy/Energy-General/The-Undeniable-Signs-Of-A-Shale-Slowdown.html

 

Simply put its an up and down cyclical event. Shale output like others may go up or go down, fluctuations based on who sneezed and for what? is it a cold? or the flu? or much more serious? Who is hungry or not? OPEC and Russia may agree to further the cuts or decide to end the agreement. However both groups benefit with prices above the 55-65$ range. Even if their volume of sales dips to competition, they still make better profits on less volume. In a way they are selling less product for more value. Shale is here to stay for the long  term. Even if there is a 2%-5% drop in shale output it will still be more than what it was 15 years ago!!!!

More to follow....

 

Glad to know you are doing better and wish you a full, healthy and speedy recovery!

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Light sweet crude prices on the New York market gained to settle at $64/bbl on Apr. 18, marking the second time in 3 days that the benchmark has reached or broken above that level.

Brent crude oil for June also rose to settle just under $72/bbl for the second time in 3 days.

“I think it’s pretty clear that tightening supplies and receding fears of demand growth is a boost to the market to these 5-month highs,” Gene McGillian, Tradition Energy vice-president of market research in Stamford, Conn., told Reuters.

The US drilling rig count dropped 10 units to reach 1,012 rigs working for the week ended Apr. 18, Baker Hughes reported in its weekly rig count, releases a day early because of the Good Friday holiday Apr. 19

The count was down 1 unit from the 1,013 rigs working at the same time a year ago.

Energy prices

The May contract for light, sweet crude oil on the New York Mercantile Exchange increased 24¢ to settle at $64 on Apr. 18. The price for June delivery rose 20¢ to settle at $64.07/bbl.

NYMEX natural gas for May dropped nearly 3¢ to a rounded $2.49/MMbtu.

Ultralow-sulfur diesel for May edged up by less than 1¢ to remain at a rounded $2.07/gal. The NYMEX reformulated gasoline blendstock for May increased 3¢ to settle at $2.07/gal.

Brent crude for June gained 35¢ to settle at $71.97/bbl. The July price increased 34¢ to settle at $71.43/bbl.

The gas oil contract for May decreased $1.50 to $635.50/tonne on Apr. 18.

OPEC’s basket of crudes for Apr. 18 was unavailable because the OPEC offices were closed Apr. 19.

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17 hours ago, cbrasher1 said:

I do not see KSA shooting itself in the foot with their expectations for their budget, so I believe cuts will continue or even the Saudis carry the load alone? Global demand is still high currently, so I think(and hope) we continue in the current price range which is a level both producer and consumer can function with.

We will have to wait and see regarding what the Saudi's do!

In Pakistan as oil moved to this price range we have suffered a Rs. 6/- hike in petrol prices! so not for all the consumers I'd say.

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(edited)

12 hours ago, ceo_energemsier said:

Simply put its an up and down cyclical event. Shale output like others may go up or go down, fluctuations based on who sneezed and for what? is it a cold? or the flu? or much more serious? Who is hungry or not? OPEC and Russia may agree to further the cuts or decide to end the agreement. However both groups benefit with prices above the 55-65$ range. Even if their volume of sales dips to competition, they still make better profits on less volume. In a way they are selling less product for more value. Shale is here to stay for the long  term. Even if there is a 2%-5% drop in shale output it will still be more than what it was 15 years ago!!!!

More to follow....

 

Glad to know you are doing better and wish you a full, healthy and speedy recovery!

Some good points!

Looking forward for your further analysis.

Thank you for the kind words!!

Edited by Osama
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In my view, Brent needs to stay at or below $70 and WTI needs to stay closer to $50 or else the oil price rollercoaster will start up again.

● $60+ WTI is unsustainable, in my view.  $50-ish seems to be the Goldilocks zone for WTI.

● $75+ Brent is unsustainable, in my view.  $70.00 seems to be the perfect, magical Goldilocks zone for Brent.

Moving too much higher or too much lower from these numbers for WTI and Brent will likely throw out of whack the current, wonderful, suitable balance between most oil producers and most oil consumers.

Oil Traders and oil producers, please don't get greedy and mess everything up.

Remember not long ago, the mantra of oil prices being "lower for longer" and "$40 forever"?

Those mantras just a few years ago were the direct result of oil producers and oil traders getting too damn greedy and choking the oily goose for a few years.

● $70 Brent and $50 WTI, please.

● Balanced, suitable, optimum, please.

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Tom

Oil traders do not set the price of oil, the price of oil is set by the demand and supply equilibrium. In 2002 China's oil imports started to increase substantially and global spare capacity became stretched. The dramatic increase in price was simply the result of countries and refineries bidding for the last available export capacity.

Similarly the large over supply in 2015, 2016 and 2017 caused by the shale oil boom meant that exporting countries like Russia and Saudi Arabia had lots of oil sitting around that they could not sell. Therefore the price collapsed.

Also the price of oil was over $100 for all of 2011, 2012, 2013 and half of 2014, yet the world economy grew as did consumption. There is obviously nothing wrong with $110 or $120 oil, in fact that price is needed to drill for the very expensive deep sea oil that we will need.

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2 hours ago, Tom Kirkman said:

... Moving too much higher or too much lower from these numbers for WTI and Brent will likely throw out of whack the current, wonderful, suitable balance between most oil producers and most oil consumers.

Oil Traders and oil producers, please don't get greedy and mess everything up.

Remember not long ago, the mantra of oil prices being "lower for longer" and "$40 forever"?

Those mantras just a few years ago were the direct result of oil producers and oil traders getting too damn greedy and choking the oily goose for a few years.

● $70 Brent and $50 WTI, please.

● Balanced, suitable, optimum, please.

 

1 hour ago, Gorizia said:

Tom

Oil traders do not set the price of oil, the price of oil is set by the demand and supply equilibrium. In 2002 China's oil imports started to increase substantially and global spare capacity became stretched. The dramatic increase in price was simply the result of countries and refineries bidding for the last available export capacity. ...

 

This is what I'm talking (and warning) about:

Oil Bulls Double Down on Rally With Highest Bets Since October

Hedge funds are betting rising tensions around the globe will keep fueling oil’s rebound this year.

Money managers boosted optimistic wagers on West Texas Intermediate crude to the highest since October in the week ended April 16, according to government data released Friday. Total long and short positions swelled to the most in six months, a sign the rally is luring back investors after 2018’s late-year crash. The U.S. benchmark has jumped about 40 percent this year.

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Tom

 

There is no doubt that the traders can move prices for a while but reality is what makes prices and not gambling.

If the traders are correct and real world oil supply is disrupted then the price of oil will increase. If however OPEC decide to produce as much oil as it can and an excess 2 million barrels a day comes onto the market then the traders will lose their shirts. 

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Osama

Glad to see you back, wishing you the best of health in the future.

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(edited)

In theory, just about every patch of the Permian could be a production field depending on how many formations are stacked , even a single formation would be considered "a drill site" or a "producing field" subsurface.

The Permian Basin is an oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. The Permian Basin covers an area approximately 250 miles wide and 300 miles long and is composed of more than 7,000 fields (best represented in Railroad Commission of Texas production figures as districts 7C, 08, and 8A) in West Texas. Various producing formations such as the Yates, San Andres, Clear Fork, Spraberry, Wolfcamp, Yeso, Bone Spring, Avalon, Canyon, Morrow, Devonian, and Ellenberger are all part of the Permian Basin, with oil and natural gas production depths ranging from a few hundred feet to five miles below the surface. Other areas within the greater Permian Basin include the Delaware Basin and Midland Basin. The Delaware Basin includes significant development in the Bone Spring and Wolfcamp, together known as the Wolfbone. The Midland Basin includes significant development in the Spraberry and Wolfcamp, together known as the Wolfberry. Recent increased use of enhanced-recovery practices in the Permian Basin has resulted in a substantial impact on U.S. oil production.

Given the enormous land mass of the Permian, it boils down to the quality of rock!!! GEOLOGY !!!

Without good geology there can be no production, or dismal production or just about your "stripper" well production of 10bpd or less.

Good geology= good quality rocks in the sub surface that contain high organic matter that results in hydrocarbons (oil, gas, ngls, condensate, natural gasoline etc)

I see all kinds of numbers being thrown out on this forum about how terrible and horrible shale is......

But unless you are doing it right then obviously just like any other business , a very highly technical business that relies on science and technology, you will not be as successful as others or will fail outright. Just like a doctor who has access to medical technology but doesnt apply it well doesnt make that doctor very good in terms of diagnostic understand capabilities and the application and implementation of that to a particular patient's case.

We have all read, heard about and seen hundreds of companies vanish, go under, go bankrupt and cease to exist in the shale patches across the country, a lot of them were fly by the night operations, who thought they could hit a few wells and be millionaires. Others backed by debt financing leveraged their potential reserves, only to find out that the quality of their rock wasnt so good and they overpaid for the leases.

The is highly competitive, risky and extremely technical (not that other oil and gas exploration isnt) as shale is a completely different animal and game than your conventional formations.

There are a lot of aspects of shale successes, some of them

1) Due diligence on the prospect , quality of rocks and the complete and thorough mapping of the subsurface formations, structures and shale layers and total analytical understanding of what each section means.

2) Not over paying for acreage. If companies pay (as they did in the past 10,000-100,000$ an acre and a lot of companies failed)) without proving out the geology , it could very well be a losing game from the start. The cost of acquisition should be reasonable and not be a burden going into a project. In the pre shale boom, companies played the land game than actually playing oil gas production game, buying up hundreds of thousands of acres of greenfield leases for very high prices and then flipping it. I call them lease flippers, they did make money for a time "flipping" and going into JVs with foreign companies as was the case with Chesapeake and CNOOC and Reliance etc , who ended up paying billions of $$ for just leases and at the end they exited these JVs with a very bad taste in their mouths. And look what happened to Chesapeake for a long time.

3) Using all the available technologies and data to create an ultimate picture of the subsurface including geology, petrophysics/geophysics, geochem, petroleum and reservoir engineering and finding and creating a multi tiered rock quality package for drilling. You can have sweetest, sweeter and sweet spots. ( For my own operations, I dont even touch the sweet spots first-- other companies sweet spots are their top tier, for us it the last drill site on the charts, sometimes you balance the drilling between the 3 tiers). 

4) Given that the Permian is a multi faceted geo formation, as it contains shale and non shale, the success rate can be very good if all things that are key are done right.

5) After having identified all the aspects in 3) and 4), next is the choice of drilling services and technologies , again the most advanced and feasible ones to be used that are best suited to those geo conditions, then followed by the testing and if the testing is good and within the criteria of a company, moving onto the production and development phase. Again all highly technical.

6) We are seeing costs in the Permian ranging from $30$-$45$/bbl some state it to be in the $48-$55/bbl , while most shale naysayers keep parroting $65-70$/bbl. That was true several years ago.

Another fine example is the Eagle Ford where costs now are down to $24-$35$/bbl

7) Type of funding is also very critical

Just a quick overview.

IN the end technology and science application of how, when and where is the key. Technologies are evolving everyday either brand new, or improvement and enhancement of existing ones, or combining a suite of technologies and application and merging of technologies from other business and industrial sectors.

We are not wildcatting for shale!!!

The major oil companies coming into the Permian are going to change the whole landscape and will more than likely see a lot of M&A's happening and also a lot of companies just exiting because they do not have the capability to do what it takes to be a shale player.

If XOM starts producing 1MMBPD and CVX does 900MBPD , that is a game changer, over time they can be producing more than that.

The Permian is already producing more than the Ghawar field.

Even with the shale well declines (which can be cured to a big degree now), new and better wells will take over. The older wells will be reworked and EOR applied to recover more oil, as only 10-15% of the oil gets recovered. However with new and advanced tech, we can see initial recoveries boost to over 25-35% and secondary recoveries can also match that range.

So there is still so much oil left in those declining older or parent wells that will keep the supply of oil going for much longer when reworked or companies will go back and study the subsurface geo and data and drill and complete better bigger wells.

The Permian has been producing commercially since 1921 and it will keep producing for a lot longer into the future. How much longer? are we going to be around to find out? LOL

 

 

image.thumb.png.55513b75a1abaa5298142c26db5dd50b.png

 

Despite recent low crude prices and a significant drop in the DrillingInfo rig count during January, the giant Permian Basin of West Texas and Southeast New Mexico continues to expand its role as the main driver of energy growth in North America. In just the past week, we have seen the following significant events that are attributable all or in part to what has become the world's second most-productive oil and gas resource:

A driver of upstream and midstream profits - Both ExxonMobil and Chevron beat analyst expectations with their 4th quarter earnings announcements, driven mostly by their upstream and midstream developments in the Permian. Exxon beat forecasts by almost one-third, with its full-year 2018 earnings coming in at the highest level since 2014. Driven by its Permian drilling, Chevron's oil and natural gas production rose to an all-time high as the company produced a record 3 million barrels of oil per day (bopd) during the 4th quarter.

A driver of downstream expansion and acquisitions - Early last week, Exxon also broke ground on a major expansion of its Beaumont refinery, a project that will add the capability of processing an additional 250,000 bopd and make it the largest refinery in the country. The new refining train being installed will be fit for processing the light, sweet crude produced in the Permian Basin and other North American shale plays, a growing volume of which must currently be exported in order to be refined. Meanwhile, Chevron confirmed on February 1 that it was acquiring the interest in the Pasadena Refining System owned by Petrobras America Inc. This purchase gives Chevron an additional 110,000 bopd of capacity to refine its own light sweet crude.

 

 

 

A driver of record domestic production - In its new Annual Energy Outlook released on January 24, the U.S. Energy Information Administration (EIA) now projects in its reference case that domestic crude oil production will rise to more than 15 million bopd by 2022, years before previous projections, and will remain above 14 million bopd through the year 2040. The main driver of this record production? The Permian Basin:

"Growth in Lower 48 onshore crude oil production occurs mainly in the Permian Basin in the Southwest region. This basin includes many prolific tight oil plays with multiple layers, including the Bone Spring, Spraberry, and Wolfcamp, making it one of the lower-cost areas to develop."

 

Meanwhile, the EIA's "High Resource and Technology" case projects U.S. domestic production to grow to an even more impressive 20 million bopd by the year 2040. This case may well be the most relevant here since, if we know anything about EIA projections as they relate to the Permian Basin over the past decade, it is that they are constantly having to be revised upwards.

A driver of record exports - In that same report, the EIA also finds it necessary to accelerate its previous projected date for when the U.S. will become a consistent net exporter of crude oil. The agency now projects that that threshold will be crossed in 2020, two full years sooner than it had previously anticipated just last year:

“The United States becomes a net energy exporter in 2020 and remains so throughout the projection period as a result of large increases in crude oil, natural gas, and natural gas plant liquids (NGPL) production coupled with slow growth in U.S. energy consumption.”

Those "large increases in crude oil", as quoted above, are driven mainly by the Permian Basin.

It's important and almost stunning to remember that, just a decade ago, the dusty plains of West Texas and Southeast New Mexico that make up the greater Permian Basin were widely considered to be a "dead area" by most in the oil and gas industry. Major oil companies like Chevron and ExxonMobil had pretty much abandoned any drilling activities or other major capital investments in the region, preferring to focus their capital dollars on searching for oil in more promising parts of the world. In September of 2008, total U.S. oil production was roughly 3.2 million bopd. This month, the EIA projects that the Permian Basin alone will put that much crude onto the market.

Now, just 10 years later, this basin is the hottest oil and gas play on the face of the earth, the driver of energy growth for the world's largest oil and gas-producing nation.

“Recent development in the Permian, driven by favorable economic conditions, is leading the new growth in the North American shale oil market.”

The rise of North American shale represented an enormous success, but the oversupply it created also helped contribute to the downturn. What changes have been made to shale oil operations so far as a result of that low-oil-price environment, what developments can we expect to see going forward, and what role will each basin play in future production? Our North American Shale Oil Outlook to 2025—developed using our North American Supply Model and other proprietary data collected by Energy Insights—explores the answers to these questions in greater detail.
 

image.thumb.png.843b5dae5536f21f5c24c42a8e7903ec.png

Permian poised to drive the shale oil market for the next 10 years

From Q2 2014 to Q1 2016, oil oversupply—in part caused by rising shale oil production—led oil prices to fall 50 percent and the number of active rigs to fall 80 percent. Though the market remains constrained by capital and rig or labor availability, we’ve seen oil prices recover, drilling activity more than double, and key operational improvements enable the shale oil industry to endure through the low-oil-price environment and beyond.

Recent development in the Permian, driven by favorable economic conditions, is leading new growth in the North American shale oil market. The Permian’s initial production (IP) growth rate for the past 5 years was 20 percent—compared to 2 percent in the Eagle Ford and Bakken—and its early development stage means there are more remaining drilling locations to explore. The basin also benefits from an average core breakeven price for 2017 that is less than $41 per barrel, enabling it to stay profitable despite well-cost increases of 30 percent.

As far as operational improvements are concerned, better drilling efficiency, completion design, and high grading have sustained and will continue to drive growth despite the foreseeable cost escalation of 15–25 percent in the next 2 years. Operators have reduced drilling days by 5 days while improving IP by 33 percent from 2014 to 2016. Improved completion design—like those that use higher volumes of proppant—has increased IP by 35 percent, and high grading in each subbasin has enabled operators to continue to drill and produce even considering the current oil price.

Going forward, under our base case that sees WTI at $60–70 per barrel from 2019 onward, we expect drilling and completions (D&C) activity to grow 20 percent per year and production to grow 12 percent per year through 2021. That increased D&C activity will require total capex spend to grow to near 2014 spend levels, and production will have nearly doubled since 2014, reaching around nine million barrels per day by 2025.

Edited by ceo_energemsier
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On 4/19/2019 at 10:08 PM, ceo_energemsier said:

 

Light sweet crude prices on the New York market gained to settle at $64/bbl on Apr. 18, marking the second time in 3 days that the benchmark has reached or broken above that level.

Brent crude oil for June also rose to settle just under $72/bbl for the second time in 3 days.

“I think it’s pretty clear that tightening supplies and receding fears of demand growth is a boost to the market to these 5-month highs,” Gene McGillian, Tradition Energy vice-president of market research in Stamford, Conn., told Reuters.

The US drilling rig count dropped 10 units to reach 1,012 rigs working for the week ended Apr. 18, Baker Hughes reported in its weekly rig count, releases a day early because of the Good Friday holiday Apr. 19

The count was down 1 unit from the 1,013 rigs working at the same time a year ago.

Energy prices

The May contract for light, sweet crude oil on the New York Mercantile Exchange increased 24¢ to settle at $64 on Apr. 18. The price for June delivery rose 20¢ to settle at $64.07/bbl.

NYMEX natural gas for May dropped nearly 3¢ to a rounded $2.49/MMbtu.

Ultralow-sulfur diesel for May edged up by less than 1¢ to remain at a rounded $2.07/gal. The NYMEX reformulated gasoline blendstock for May increased 3¢ to settle at $2.07/gal.

Brent crude for June gained 35¢ to settle at $71.97/bbl. The July price increased 34¢ to settle at $71.43/bbl.

The gas oil contract for May decreased $1.50 to $635.50/tonne on Apr. 18.

OPEC’s basket of crudes for Apr. 18 was unavailable because the OPEC offices were closed Apr. 19.

Nice copy-past statistics and old “news”, so what do you wanted actually to say?

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1 minute ago, Dmitry Bedin said:

Nice copy-past statistics and old “news”, so what do you wanted actually to say?

You can figure out the relevance of the "copy and paste" in relation to my previous comment on the same topic ;)

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The State Department is set to announce all countries that continue to import Iranian oil will be subject to US sanctions, The Washington Post reported on Sunday.

Secretary of State Mike Pompeo will announce Monday morning that as of May 2, countries importing Iranian crude or condensate will no longer be granted sanctions waivers by the State Department, two department officials told the newspaper's columnist Josh Rogin, who is also a CNN political analyst.
"The goal of the policy is to drive up the costs of Iran's malign behavior and more strongly address the broad range of threats to peace and security their regime presents," a State Department official told the Post.
The announcement will come nearly one year after President Donald Trump announced the US was withdrawing from the Iran nuclear deal.
 
 
On April 2, Brian Hook, senior policy adviser to Pompeo, said in a State Department briefing that the US is "on the fast track to zeroing out all purchases of Iranian crude." Hook said three of the eight importers who had been granted waivers on the Iran oil sanctions are "now at zero." He said a total of 23 importers were at zero.
Pompeo is set to announce offsets through commitments from other suppliers like Saudi Arabia and the United Arab Emirates, two State Department officials told the Post. Trump spoke on Thursday with the UAE's Crown Prince Mohammed bin Zayed al-Nahyan about the issue, the Post reports.
"The policy of zero Iranian imports originated with Secretary Pompeo," a senior State Department official told the Post. "He has executed this policy in tight coordination with the president every step of the way. Because the conditions to not grant any more (significant reduction exceptions, or waivers) have now been met, we can now announce zero imports."
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On ‎4‎/‎21‎/‎2019 at 4:02 AM, Justin Hicks said:

Osama

Glad to see you back, wishing you the best of health in the future.

Thank you so much!

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5 hours ago, ceo_energemsier said:

The State Department is set to announce all countries that continue to import Iranian oil will be subject to US sanctions, The Washington Post reported on Sunday.

Secretary of State Mike Pompeo will announce Monday morning that as of May 2, countries importing Iranian crude or condensate will no longer be granted sanctions waivers by the State Department, two department officials told the newspaper's columnist Josh Rogin, who is also a CNN political analyst.
"The goal of the policy is to drive up the costs of Iran's malign behavior and more strongly address the broad range of threats to peace and security their regime presents," a State Department official told the Post.
The announcement will come nearly one year after President Donald Trump announced the US was withdrawing from the Iran nuclear deal.
 
 
On April 2, Brian Hook, senior policy adviser to Pompeo, said in a State Department briefing that the US is "on the fast track to zeroing out all purchases of Iranian crude." Hook said three of the eight importers who had been granted waivers on the Iran oil sanctions are "now at zero." He said a total of 23 importers were at zero.
Pompeo is set to announce offsets through commitments from other suppliers like Saudi Arabia and the United Arab Emirates, two State Department officials told the Post. Trump spoke on Thursday with the UAE's Crown Prince Mohammed bin Zayed al-Nahyan about the issue, the Post reports.
"The policy of zero Iranian imports originated with Secretary Pompeo," a senior State Department official told the Post. "He has executed this policy in tight coordination with the president every step of the way. Because the conditions to not grant any more (significant reduction exceptions, or waivers) have now been met, we can now announce zero imports."

A rally is evident.....however, as Tom noted above, we will have to see how long does it sustains.

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Halliburton Co. said on April 22 a pricing downturn that has plagued the oilfield services sector was bottoming out, as it reported modestly higher activity levels in North America in the first quarter from a year earlier.

Oilfield services providers have been struggling with a tightening of spending by U.S. oil producers as they rein in new drilling in response to shareholder pressure for greater returns after a period of heavy investment.

The company’s shares were up 2.8% at $32 before the bell.

In contrast to comments from top oilfield services provider Schlumberger Ltd. last week, Halliburton said activity in its largest market North America was modestly higher, adding that it expects demand for its services to progress modestly for the next couple of quarters.

 

“We believe the worst in the pricing deterioration is now behind us,” Halliburton CEO Jeff Miller said, adding that it experienced pricing headwinds throughout the quarter.

Schlumberger last week blamed a 3% decline in quarterly North America revenue on softer pricing and lower activity for its hydraulic fracking and drilling businesses.

The company had also forecast a 10% decline in investments by oil producers onshore North America in 2019, adding that overall production growth outlook for the region could likely be lowered.

The number of rigs in operation in North America fell for the past four months and production growth in the Permian and other key shale basins have slowed as oil prices fell in the fourth quarter.

Constraints in pipeline carrying capacity have also forced oil producers to slow down drilling and production.

Halliburton’s revenue from North America fell 7% to $3.3 billion in the three months ended March 31 but came in above the $3.13 billion that five analysts had estimated on average, according to IBES data from Refinitiv.

International revenue rose 11%, and the company reiterated its expectation of high single-digit growth for 2019.

Total revenue was largely flat at $5.74 billion.

Net income attributable to Halliburton rose to $152 million, or 17 cents per share, in the first quarter, from $46 million, or 5 cents per share, a year earlier.

On an adjusted basis, the Houston-based company earned 23 cents per share, edging past analysts’ average estimate of 22 cents.

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Qatar Petroleum issued an invitation to tender for construction of the LNG carrier fleet for its North Field Expansion (NFE) project. The invitation foresees initial delivery of 60 LNG carriers, with the potential to exceed 100 new carriers over the next 10 years. The tender would increase the global LNG fleet by 11-19%. International Gas Union counted 525 LNG carriers at end-2018.

In addition to addressing shipping requirements for NFE, the tender covers shipping requirements for LNG that will be purchased and offtaken by Ocean LNG—a joint venture between Qatar Petroleum (70%) and ExxonMobil (30%)—from the Golden Pass LNG export project in Port Arthur, Tex., which is under construction and planned to start by 2024. The tender also includes options for replacement requirements for Qatar’s existing LNG fleet.

NFE will increase Qatar’s LNG production capacity to 110 million tonnes/year (tpy) starting in 2024 from 77 million tpy. The project will include construction of four new 8.25 million tpy LNG trains, which Qatar Petroleum tendered earlier this month

Qatargas will execute the LNG ship building program on Qatar Petroleum’s behalf.

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