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Archive for March, 2016

The Long Term Impact Of The Oil Rig Crash

By on 7 Mar 2016 in analysis, notable posts with 0 Comments
The Long Term Impact Of The Oil Rig Crash

(oilprice.com) The North American Baker Hughes Rig Count came out Friday. The decline continues. Baker Hughes gives an oil and gas breakout for every basin and state with five years of historical data. Baker Hughes has twenty eight and one half years of historical data for total U.S. rigs but only five years for individual basins. Gas rigs peaked in August 2008 at 1,606 rigs, over six years before the peak in Oil rigs. On February, 26, gas total U.S. gas rig count stood at 102, a decline of over 93 percent. A closer look at the total U.S. total rig count.

October 10, 2014 1,609 rigs
February 26, 2016 400 rigs
Percent decline 75 percent

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Oil Prices Should Fall, Possibly Hard

By on 7 Mar 2016 in analysis, notable posts with 0 Comments
Oil Prices Should Fall, Possibly Hard

(Forbes) Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.

Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.

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Luisa Palacios, head of Latin America at Medley Global Advisors, a risk consultancy

By on 7 Mar 2016 in quotes with 1 Comment

About Latin America: “The 70 percent drop in prices is a major shock. Oil was contributing in some countries from 20 to 50 per cent government revenues and 50 to 96 percent of exports. No wonder we are starting to question the financial viability of some countries and some national oil companies.”

Luisa Palacios, head of Latin America at Medley Global Advisors, a risk consultancy

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Peak Oil Review – 7 Mar 2016

By on 7 Mar 2016 in Peak Oil Review with 1 Comment

Oil prices rose for the third consecutive week with New York futures closing at $35.92 a barrel and London at $38.72. Prices in London are now up 3.9 percent for the year. Behind the price rise is a continuing drop in the number of drilling rigs operating in the US and the announcement by several major shale oil producers that they plan to suspend new drilling until prices recover. Exactly where profitability is these days is in dispute with some drillers contending they can make money from shale oil if prices rise into the mid- $40s as compared to $60-70 two years ago. Some of these claims are for the benefit of the banks who have become very wary of the oil industry in recent months. The downside, of course, is that if shale oil producers start increasing production if prices get into the mid-$40s, they could easily drive them back down again with unsaleable production.

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Shale Oil Industry Announces Production Declines Across the Board

By on 3 Mar 2016 in news, notable posts with 0 Comments
Shale Oil Industry Announces Production Declines Across the Board

(The Fuse) The U.S. oil industry seemed to be defying gravity in 2015, keeping oil production elevated even as oil prices crashed to lows not seen in more than a decade. But now, over 1.5 years into the price collapse, production declines in shale oil are finally starting to appear as low oil prices have slashed company investments in new supply, and production begins to decline from existing wells.

The latest data from the EIA shows that U.S. output is steadily declining, although perhaps at a slower rate than shale’s competitors might prefer. In December, the latest month for which final data is available, total U.S. production declined to 9.26 million barrels per day (mbd), a loss of 43,000 barrels per day from the month before and down from a peak of 9.69 mbd in April 2015. But December’s small decline hides the decrease in shale production, as losses were offset by output increases from the Gulf of Mexico.

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IEA: oil prices have bottomed out, but growth will not be sharp

By on 1 Mar 2016 in news, notable posts with 0 Comments
IEA: oil prices have bottomed out, but growth will not be sharp

(Reuters) Global oil prices appear to have bottomed out and are expected to rise through this year as investment cuts help to reduce a supply glut, a senior analyst at the International Energy Agency said on Tuesday.

Benchmark Brent crude futures LCOc1 were up 44 cents at $37.01 a barrel at 1304 GMT (06:04 EST), the highest in eight weeks. They hit a more than 12-year low of $27.10 on Jan. 20.

“Oil prices appear to have bottomed out,” Neil Atkinson, the new head of IEA’s oil industry and market division, told a seminar in Oslo.

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Billion-Barrel Stockpile May Take Years to Clear

By on 1 Mar 2016 in news, notable posts with 0 Comments
Billion-Barrel Stockpile May Take Years to Clear

(Bloomberg) Even if Saudi Arabia wins its struggle with U.S. shale producers over market share, it will face a new billion-barrel adversary.

It won’t be regional nemesis Iran, a resurgent Iraq or long-standing competitor Russia. The answer will be more prosaic: Even when overproduction ends, a stockpile surplus of more than 1 billion barrels built up since 2014 will remain, weighing on prices. Inventories will keep accumulating until the end of 2017, the International Energy Agency forecasts, and clearing the glut could take years.

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