RIGZONE: U.S. Oil Exports Just Begining

[BLA + 1,666]

https://www.rigzone.com/news/us_oil_export_story_has_really_just_started-19-feb-2020-161131-article/ 

[0R0 + 6,251]

We were discussing the IEA's somewhat overly optimistic view of US oil production, it will have to wait a while for prices to remain steadily above $50 to see any increases at all and $60 for persistent production growth.

[BLA + 1,666]

53 minutes ago, 0R0 said:

We were discussing the IEA's somewhat overly optimistic view of US oil production, it will have to wait a while for prices to remain steadily above $50 to see any increases at all and $60 for persistent production growth.

Yes .  .  maybe.

I agree with your price points for now.  However it is changing.  

The Permian exports will be controlled by the oil majors and the large international trading firms or Vitol, Trafigura, Govnor, etc

Majors have production, locked up pipeline capacity, access to export terminals and most importantly the international marketing and logistics operation.

Trading firms will work with the midsize and smaller independents providing all the services listed above.  BUT these producers do not have the scale to produce oil at a price the Majors can PLUS the Trading firms need their vig on the transactions.

Breakeven price points are dropping.  Thus export price points 

The COVID-19 virus most likely will be a distant memory in 6 months.  BUT take note of what excess supply will do to oil prices over the next couple of months. 

VLCC export terminals are key to serious growth.  They are about 18 months out.

 

 

Edited February 25, 2020 by BLA

[Old-Ruffneck + 1,246]

9 hours ago, 0R0 said:

We were discussing the IEA's somewhat overly optimistic view of US oil production, it will have to wait a while for prices to remain steadily above $50 to see any increases at all and $60 for persistent production growth.

Remember, Duc wells are still around 7500 and that will put a lot of production on the market. We need the pipelines to the gulf to sell the excess LTO we are producing. Rig count is flattening out now at 50-55$ a barrel, yet production is staying steady at 13mbd. My guess of last year for 2021 was 20mbd. Very optimistic back then but not far off the IEA's 18mbd. As long as they can build the terminals within the next 12 months production will rise and be in direct competition with OPEC and Russia. I see prices after the beervirus has run its course to steady around 58$ by September.