We're worried about US shale production, while OPEC calls for $10 trillion investment to meet demand?

[TraderTate + 186]

So, while oil prices are dull on glut concerns and an uptick in US shale production, OPEC is saying the industry needs $10 trillion in investment by 2040 to meet growing demand ... 

[Seleskya + 50]

Right, and BP just released its annual energy outlook, saying that peak oil demand is going to hit sooner than we thought because of renewables. 

[Bison + 1]

I think people make too much of the shale bugaboo.  It takes a lot of drilling to maintain the production numbers and banks and private equity companies are beginning to push for profits instead of production.  I don't by any means think it is the end of shale, but it may be a slow down.  We've had 2 years of non-investment in exploration that is going to bite us eventually.  The shale play has been built on the backs of the service providers being beaten down on costs, etc.  Those prices must rise to continue exploration and production.  State governments are also pushing back on tax breaks given to unconventional producers.  They are starting to realize that most of the production is in the first 12-18 months of production and are trying to pare back breaks given out to 24 - 36 months.

[Seleskya + 50]

Also, the past few years of shale production were made possible because oilfield services companies were taking a hit with huge discounts. Now they're going to want some of their money back, so it's not going to be as cheap anymore. 

[Rodent + 1,424]

 

45 minutes ago, Bison said:

I think people make too much of the shale bugaboo.  It takes a lot of drilling to maintain the production numbers and banks and private equity companies are beginning to push for profits instead of production.  I don't by any means think it is the end of shale, but it may be a slow down.  We've had 2 years of non-investment in exploration that is going to bite us eventually.  The shale play has been built on the backs of the service providers being beaten down on costs, etc.  Those prices must rise to continue exploration and production.  State governments are also pushing back on tax breaks given to unconventional producers.  They are starting to realize that most of the production is in the first 12-18 months of production and are trying to pare back breaks given out to 24 - 36 months.

That "shale bugaboo" is keeping oil prices where they are, and I would expect that trend to continue. As OPEC cuts,  tugging prices upward, shale continues tugging prices back down. The result is oil hovering in a nice place that is just enough to keep US drillers happy. 

Sure, profits will need to taken. And eventually the lack of money sunk into the US industry in the last few years will affect US production, but not before US shale erodes OPEC's market share.

[Rodent + 1,424]

And Shell is looking to buy up some shale assets in the Permian, citing breakevens of $15. https://www.bloomberg.com/news/articles/2018-02-20/shell-shows-interest-in-bhp-assets-amid-plans-to-expand-in-shale

[theeseer + 1]

The world is not giving up on oil and gas for the simple reason that it is the cash cow for most of the major powers. I have no doubt that there are other ways to generate energy but they simply will be introduced only when and if Russia, the USA, the entire Middle East figures out how to live without fossil fuel dollars. Meantime lets make some money on the stocks. I really like Noble 750 million buyback and more reserves found. 

[Rodent + 1,424]

13 minutes ago, theeseer said:

The world is not giving up on oil and gas for the simple reason that it is the cash cow for most of the major powers. I have no doubt that there are other ways to generate energy but they simply will be introduced only when and if Russia, the USA, the entire Middle East figures out how to live without fossil fuel dollars. Meantime lets make some money on the stocks. I really like Noble 750 million buyback and more reserves found. 

$NBL not looking too shabby today! Hope you got in early!

[TraderTate + 186]

Even big oil is investing in renewables ... they know where this is all going, eventually. It'll be a long time before renewables overtake fossil fuels, but they're still all preparing for that (dollars are dollars). 

[Rodent + 1,424]

1 minute ago, TraderTate said:

Even big oil is investing in renewables ... they know where this is all going, eventually. It'll be a long time before renewables overtake fossil fuels, but they're still all preparing for that (dollars are dollars). 

Agreed, which is why Saudi Arabia is going gangbusters for Vision 2030. This is where the state-run oil companies have a leg up on the US--they can make big sweeping changes because it's under one roof. The US has lots of little players that can only be regulated broadly, and regulation comes slowly and painfully. The exception being place like PDVSA, which couldn't possibly be expected to get its act together to produce oil while sitting n the biggest reserves in the world. Its attempted foray into renewables will have similar results. Likely Nigeria too.

[Harsh vardhan singh + 36]

OPEC's optimistic thinking towards Oil demand is good for oil prices but somewhere they are now preparing for upcoming renewable boom.

[Seleskya + 50]

20 hours ago, Rodent said:

$NBL not looking too shabby today! Hope you got in early!

NBL is great! Egypt deal pushed their shares up 10% this week. Up over 2% already today.