James Regan

Oil Production Growth In U.S. Grinds To A Halt

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"Lower oil prices and ongoing financial stress in the U.S. shale industry are creating headwinds for drillers, and it appears increasingly likely that supply growth could undershoot forecasts.

U.S. oil production fell in June to 12.082 million barrels per day (mb/d), according to new data released by the EIA on Friday. That is a decline of 33,000 bpd from May – not a huge drop off, but a decline nonetheless. In previous months, maintenance at offshore oil fields made up a big chunk of the declines. While the overall figures for the entire U.S. appeared to disappoint, temporary declines offshore masked ongoing growth in the Permian. But this time around, blame cannot simply be pinned on offshore maintenance."

The Permian was used as the benchmark and the US Trophy play which would dominate world oil, has already peaked, what does this say for the rest of the Shale plays currently joining Permian on the podium. How can any credibility be given to the long turn forecast with US Shale?

We do not see this kind of "flash in the pan" declines with conventional oil plays, they last a life time and very difficult to see fields depleted or becoming unviable within ones career, happens yes but its rare and not the norm which is now evident with the Shale plays. Am I wrong to say that this side of the Industry is a bank heist, cut and run?

Looking forward to when the Hague starts the hearings into "Crimes Against the Oil Field".

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(edited)

On 9/4/2019 at 6:13 AM, James Regan said:

 

U.S. oil production fell in June to 12.082 million barrels per day (mb/d), 

.

.

EIA WEEKLY REPORT WEEK ENDED AUGUST 23rd

NEW U.S. RECORD :

12.5 MM BBLS/DAY

RECORD PRODUCTION IN PERMIAN AND BAKKEN 

The summer maintenance period accounted for part of the moderation.  

Producers in the Permian throttled back production .  There was no place to put the oil.  

Permian Peaked.  Hardly.  Delaware sub basin in Permian has not even scratched the surface.  The infrastructure to support its growth just now starting to be put in place.

NO PERMIAN PIPELINE CAPACITY

Pipes coming online.

CACTUS II AND EPIC STARTING TO FLOW.

9,000 DUCs inventory starting to be completed.

DO THE MATH

Record 12.5 mm bbls/day last week.

Weekly inventory number by itself is a joke.

Most analyst just parrot OPEC/KHALID al-FALIH propaganda (Energy Aspects, RBC Capital).

I have found CITI and Bank of America do serious analysis.

 

 

 

Edited by SKEP
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The fractures are starting to appear. The castle will fall.

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(edited)

On 9/4/2019 at 7:44 AM, Douglas Buckland said:

The fractures are starting to appear. The castle will fall.

Yes you are correct.

BP just left Alaska to concentrate on U.S. shale so THEY CAN LOOSE MORE MONEY

EXXON just sold Norway holdings to focus on Shale and Guyana to lose money

Chevron best Worldwide Return on Capital is U.S. shale.

KKR just bought prime Permian  Delaware basin acreage so they can loose money in shale.

Exxon said they can get Permian break even price down to $15.00 bbl MUST be a bold face Lie.

The market will put the knuckleheads that thought oil would be $100 bbl forever out of business

 The sooner the better. That's not a "fracture" it's natural industry lifecycle.

U.S. Shale and Gulf of Mexico will dominate Oil and Gas market for next decade.

 

Edited by SKEP
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6 hours ago, SKEP said:

.

.

 

Record 12.5 mm bbls/day last week.

 

 

 

That's a WAG and not a real number.

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2 minutes ago, wrs said:

That's a WAG and not a real number.

Nope

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Just now, SKEP said:

Nope

Yep, no one reports production on a weekly basis. 

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(edited)

4 minutes ago, wrs said:

Yep, no one reports production on a weekly basis. 

EIA does.

The EIA does a comprehensive weekly survey with minimum error. Many producers don't report their production for 2, 3 or even 6 months. The EIA survey has proven to be very accurate.

Will be interesting to see EIA Production and Export numbers in tomorrow's report.

Edited by SKEP
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Just now, SKEP said:

EIA does.

Where do they get the number?  No one reports production on a weekly basis.

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Are you saying the EIA numbers are not reliable? 

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(edited)

2 minutes ago, Zhong Lu said:

Are you saying the EIA numbers are not reliable? 

The weekly stuff is garbage for the most part.  The production numbers in the weekly stuff are estimates of their own.  The RRC requires reporting production 30 days in arrears.  If you try to get production information from the RRC site you will see that the data is all for at least one month back.  There is zero August production information from any operator out there right now and July has just begun appearing.

The inventory numbers are from a survey.

Edited by wrs
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(edited)

Ok, you are saying the EIA numbers are not reliable.  I agree.  But it's better than nothing.  Like everyone else I like having numbers so I can justify to myself that I'm doing the right thing.  What else do we have? 

Edited by Zhong Lu
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USA will not overproduce oil. USA's objective is to ensure energy independence and it will get to that level and then stop increasing further. USA will not increase oil production beyond 12.5-13 million barrels a day as that is the level needed to achieve full energy independence. Once that level is reached, USA will stop further increase. It can be done via taxes or blocking permits.

Bit oil price has nothing to do with the oil production

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That's actually a very "socialist" way of looking at it.  You're implying there's some central planner in control of oil production.  

Personally I think the reason oil production stops is because most of the oil producers go bankrupt.

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(edited)

On 9/4/2019 at 1:28 PM, kshithij Sharma said:

USA will not overproduce oil. USA's objective is to ensure energy independence and it will get to that level and then stop increasing further. USA will not increase oil production beyond 12.5-13 million barrels a day as that is the level needed to achieve full energy independence. Once that level is reached, USA will stop further increase. It can be done via taxes or blocking permits.

Bit oil price has nothing to do with the oil production

U.S. producers objective is to make as much money as possible.  They don't give a darn about energy independence. That's absurd.

Energy Independence talk is for politicians and the clueless.

There is no stopping the flood of oil about to hit the market over the next 18 months.  

Much of the new shale production will be coming from the Majors that have the new pipeline capacity, logistics, tanker fleets, and worldwide marketing.

Who cares about the established long-term contracts.

THESE PRODUCERS WILL START HITTING THE BIDS ON THE SPOT MARKET LIKE THERE IS NO TOMORROW.

Cant wait to see how a bloated inefficient quasi government entity like ARAMCO deals with a real world competitive market for the first time in its existence.  

Low oil prices are good news for world economies.  

OPEC will pop oil prices in short term to get prices up for suckers to buy their IPO listed on the Saudi Exchange.

OPEC better have a plan "B" for when Brent settles or to use their words "balances" and "stabilizes" at $55 to $60 bbl First Half of 2020.

Edited by SKEP
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2 hours ago, SKEP said:

U.S. producers objective is to make as much money as possible.  They don't give a darn about energy independence. That's absurd.

OPEC will pop oil prices in short term to get prices up for suckers to buy their IPO listed on the Saudi Exchange.

OPEC better have a plan "B" for when Brent settles or to use their words "balances" and "stabilizes" at $55 to $60 bbl First Half of 2020.

Yes to IOCs and their objectives. Maximizing shareholder wealth is the entire point. Not any long term systemic good, as if we could define it anyway.

OPEC is not a band of brothers, let alone OPEC plus Russia.

The days of KSA being a massive swing producer (look at how much they would very production '73-the 90s are long over. They can't afford to only pump 3 mbd, and aren't capable of sustaining 12 mbd. 

But the overt hostage days for '73 (KSA) or late '79 (Iran) have kind of come and gone. The producers need the consumers more, and when you have some balance between consumption and production, capitalism is pretty brutal on folks that try and set a market.

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5 hours ago, wrs said:

The weekly stuff is garbage for the most part.  The production numbers in the weekly stuff are estimates of their own.  The RRC requires reporting production 30 days in arrears.  If you try to get production information from the RRC site you will see that the data is all for at least one month back.  There is zero August production information from any operator out there right now and July has just begun appearing.

The inventory numbers are from a survey.

Wrs is correct EIA report weekly then revises on a monthly basis. You can expect the monthly revision to be as accurate as any reporting agency can be ie: accounting for a standard deviance of error, companies under reporting and or late filings, etc...

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17 hours ago, Matthew w said:

Wrs is correct EIA report weekly then revises on a monthly basis. You can expect the monthly revision to be as accurate as any reporting agency can be ie: accounting for a standard deviance of error, companies under reporting and or late filings, etc...

 . .  .  and the EIA Weekly U.S. Production survey has proven to be very acurate.

Weekly inventory number is a joke.

Edited by SKEP
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A little bit offfff topic,

Shale oil and shale gas extraction in the United States is a complete mistery for me. Wealthy and powerful country engages in activities that actively destroy large areas of land (pollution of soil and most of all underground water basins) for thousands of years for a few bucks. I know that vested interest groups, lobbyists simply run the country, EPA is a fig leaf etc. but this considers your very health and health of your children. This is not a case of bloated bills of military contractors etc., I mean people are stealing everywhere in the world, all the time, you could say it is normal, while not welcome.

But usually when it comes to the things that endanger the very existence of people, democratic societies typically act. Fracking is banned explicitly or implicitly in all EU countries. They could frack in China, but China is an authoritarian country and you can land in jail or just disappear if you are against the ruling class.

A lot of intelligent discussions here at oil price, could anybody tell mi why fracking is so popular in US ?

You could buy for sure any amount of oil and gas at world markets, your Navy rules the oceans,

no Malacca dilemmmas of China etc. so why ?

 

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16 hours ago, wrs said:

The weekly stuff is garbage for the most part.

Agreed, pay attention to any report from EIA or API etc, and you will  firstly see the adjective "surprise" its constant but go to an OPEC statement thats being reported on this forum and other and they go right down to business not adjectives just "Fact", so wheres the transparency in the US numbers constantly "spouted" (Oil Term) on the is forum.

 

5 hours ago, SKEP said:

 . .  .  .  and the EIA Weekly survey has proven to be very acurate.

Now your clutching at straws how can they be accurate when everyone get a surprise?

Screen Shot 2019-09-05 at 06.39.50.png

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(edited)

27 minutes ago, Marcin said:

A little bit offfff topic,

Shale oil and shale gas extraction in the United States is a complete mistery for me. Wealthy and powerful country engages in activities that actively destroy large areas of land (pollution of soil and most of all underground water basins) for thousands of years for a few bucks. I know that vested interest groups, lobbyists simply run the country, EPA is a fig leaf etc. but this considers your very health and health of your children. This is not a case of bloated bills of military contractors etc., I mean people are stealing everywhere in the world, all the time, you could say it is normal, while not welcome.

But usually when it comes to the things that endanger the very existence of people, democratic societies typically act. Fracking is banned explicitly or implicitly in all EU countries. They could frack in China, but China is an authoritarian country and you can land in jail or just disappear if you are against the ruling class.

A lot of intelligent discussions here at oil price, could anybody tell mi why fracking is so popular in US ?

You could buy for sure any amount of oil and gas at world markets, your Navy rules the oceans,

no Malacca dilemmmas of China etc. so why ?

 

@Marcin nothing is off topic here, start a thread on anything "free your mind, like water put water into the tea pot and become the teapot, put it into the cup and become the cup, now water will flow and water will crash- Be Water My Friend - Bruce Lee.

Its that easy now we can discuss Martial arts etc but will end up talking about how good the USA is with its regional oil play.

Fracking is popular because its a merry go round of debt and loss and crimes against the oil industry, currently propping up the USA, but not for long.

Edited by James Regan
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(edited)

4 hours ago, Marcin said:

A little bit offfff topic,

Shale oil and shale gas extraction in the United States is a complete mistery for me. Wealthy and powerful country engages in activities that actively destroy large areas of land (pollution of soil and most of all underground water basins) for thousands of years for a few bucks. I know that vested interest groups, lobbyists simply run the country, EPA is a fig leaf etc. but this considers your very health and health of your children. This is not a case of bloated bills of military contractors etc., I mean people are stealing everywhere in the world, all the time, you could say it is normal, while not welcome.

But usually when it comes to the things that endanger the very existence of people, democratic societies typically act. Fracking is banned explicitly or implicitly in all EU countries. They could frack in China, but China is an authoritarian country and you can land in jail or just disappear if you are against the ruling class.

A lot of intelligent discussions here at oil price, could anybody tell mi why fracking is so popular in US ?

You could buy for sure any amount of oil and gas at world markets, your Navy rules the oceans,

no Malacca dilemmmas of China etc. so why ?

 

Have you been to West Texas in particular the Permian basin?  Pretty desolate.

 

 

47x382h.jpg

bothtankssec18.jpg

Edited by wrs
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(edited)

orlaresident.jpgTypical Orla resident before the oil industry got there.

Edited by wrs
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(edited)

On 9/5/2019 at 5:40 AM, James Regan said:

Agreed, pay attention to any report from EIA or API etc, and you will  firstly see the adjective "surprise" its constant but go to an OPEC statement thats being reported on this forum and other and they go right down to business not adjectives just "Fact", so wheres the transparency in the US numbers constantly "spouted" (Oil Term) on the is forum.

 

Now your clutching at straws how can they be accurate when everyone get a surprise?

Screen Shot 2019-09-05 at 06.39.50.png

 

I specifically referenced the weekly Production report survey.

If you read my past posts I state weekly Inventory Report is a JOKE. 

IT DOES NOT TAKE INTO CONSIDERATION ALL THE INPUTS AND OUTPUTS.

MOST OIL ANALYST ARE WORTHLESS.

This all will change when the supply surplus grows from today's 900K/day to 2, 3, or 4 mm bbls/day.  Sometime in 2020 the day of reckoning is coming 

Record 12.5 mm bbls/day last week a good number. 

Jamie pay attention . . . get your facts straight

Edited by SKEP
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(edited)

1 hour ago, SKEP said:

Jamie pay attention . . . get your facts straight

Dude, give it a break please, your far too serious, and please stop playing with my name it not Jamie or JR its James I'm not hiding behind anything. I will also refer to you from now on as SKEP, coolio?

But your correct you did say it was monthly figures that you pay attention to, my bad.

Respectfully

Edited by James Regan
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