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Future shale production will hinge on technology, EIA says

By on 11 Jul 2016 in notable posts, viewpoints with 0 Comments

(fuelfix.com) HOUSTON – After the energy bust, the future of U.S. shale oil will depend greatly on how quickly drilling technology can evolve over the next 25 years, the Energy Information Administration says.

Rapid technological change and high energy prices could help domestic drillers push shale oil production to 12.9 million barrels a day by 2040, up from last year’s 4.9 million barrels a day, the EIA said Monday in an early look at some of its long-term projections due in a report later this month.

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The One Chart That Shows Why Oil Prices Have To Keep Rising

By on 28 Jun 2016 in analysis, notable posts with 0 Comments
The One Chart That Shows Why Oil Prices Have To Keep Rising

(oilprice.com) There has been a lot of pessimism among oil investors in recent months, and indeed the bear market over the last couple of years in black gold has destroyed many nest eggs. With that said, oil investors who have run for the hills could find themselves regretting that decision in the months and years to come.

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Rig Count Matters: Separating The Signal From The Noise in Oil Market Opinion

By on 27 Jun 2016 in notable posts, viewpoints with 0 Comments

(artberman.com) Rig count matters. Saying that it doesn’t is like a realtor saying that location doesn’t matter.

Rigs Don’t Produce Oil

The holiest mystery of shale plays is that so much production is possible with ever-fewer rigs.

But if we look at the number of producing wells, the mystery evaporates. That’s because rigs don’t produce oil and gas. Wells do.

Horizontal wells in a few tight oil plays tell most of the story for U.S. production. Figure 1 shows the rig count and number of producing wells for the Bakken, Eagle Ford, Permian, Niobrara, Mississippi Lime and Granite Wash plays. Figure 1. Tight oil horizontal rig count and number of producing wells. Source: Baker Hughes and Labyrinth Consulting Services, Inc. Although rig counts decreased dramatically beginning in late 2014, the number of producing wells continued to increase until very recently. This may be a technical triumph for the drilling industry but it is no cause for oil producers to celebrate.

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Energy Layoffs Continue in Texas

By on 27 Jun 2016 in news, notable posts with 0 Comments
Energy Layoffs Continue in Texas

(rigzone.com) The layoffs continue in oil and gas as two more companies announce workforce reductions in Texas. Weatherford Artificial Lift Systems and Sun Fab Industrial Contracting are reducing staff by 90 and 125 employees, respectively, according to data sent to the Texas Workforce Commission.

Weatherford Artificial Lift Systems, a subsidiary of Weatherford International, is cutting 90 jobs at its manufacturing operations facility in Katy, Texas due to “a loss of business opportunities.”

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Saudi Arabia Declares Cease-Fire in Oil War

By on 23 Jun 2016 in news, notable posts with 0 Comments
Saudi Arabia Declares Cease-Fire in Oil War

(Bloomberg) The new Saudi oil minister, Khalid Al-Falih, says the oil glut is over. That means the kingdom’s war against U.S. shale producers is coming to an end, too. Who won it is a tough question to answer; on balance, it’s probably the Saudis, but they have paid a huge price, and the surviving U.S. frackers have also benefited.

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Oil rallies as fears over Brexit abate

By on 20 Jun 2016 in analysis, notable posts with 0 Comments
Oil rallies as fears over Brexit abate

(Reuters) Oil rallied on Monday, lifted by a wave of investor confidence and a weaker dollar after polls showed a diminishing chance that Britain may vote to leave the European Union later this week.

August Brent crude futures were up 90 cents at $50.07 a barrel by 0843 GMT, set for a gain of 6 percent in two trading days. NYMEX crude for July delivery, which expires on Tuesday, was up 80 cents at $48.78 a barrel.

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With oil price near $50, resilient U.S. shale producers eye new chapter

By on 20 Jun 2016 in analysis, notable posts with 0 Comments
With oil price near $50, resilient U.S. shale producers eye new chapter

(Reuters) Two years into the worst oil price rout in a generation, large and mid-sized U.S. independent producers are surviving and eyeing growth again as oil nears $50 a barrel, confounding OPEC and Saudi Arabia with their resiliency.

That shale giants Hess Corp ( HES.N ), Apache Corp ( APA.N ) and more than 25 other companies have beaten back OPEC’s attempt to sideline them would have been unthinkable just months ago, when oil plumbed $26 a barrel and collapses were feared.

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Why Billions in Proven Shale Oil Reserves Suddenly Became Unproven

By on 15 Jun 2016 in analysis, notable posts with 0 Comments
Why Billions in Proven Shale Oil Reserves Suddenly Became Unproven

(Bloomberg) Ultra Petroleum Corp. was a shale success story. A former penny stock that made the big leagues, it was worth almost $15 billion at its 2012 peak.

Then came the bust. Almost half of Ultra’s reserves were erased from its books this year. The company filed for bankruptcy on April 29 owing $3.9 billion.

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Oil Supply Disruptions Highest In Five Years

By on 10 Jun 2016 in news, notable posts with 0 Comments
Oil Supply Disruptions Highest In Five Years

(oilprice.com) The disruptions in global oil supplies are at their highest level since 2011. That comes from an updated assessment from the EIA, which shows total disruptions in oil production at more than 3.6 million barrels per day in May (mb/d), the highest monthly total since the EIA began tracking the data in January 2011. The outages hit major oil supplies across the world. At its worst, Canada saw more than 1 million barrels per day knocked offline because of the wildfires near Fort McMurray. That production is starting to come back online, however, and was always thought to be a temporary disruption.

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India beats Japan in oil use, only next to US, China

By on 9 Jun 2016 in analysis, notable posts with 0 Comments
India beats Japan in oil use, only next to US, China

(The Economic Times) India has surpassed Japan to become the world’s third-largest oil consumer, with its oil demand galloping 8.1 per cent in 2015, according to BP Statistical Review of World Energy released today.

With demand of 4.1 million barrels per day, India is the third-largest consumer behind US (19.39 million bpd) and China (11.96 million bpd). India accounted for 4.5 per cent of world oil consumption in 2015.

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Iraq is pumping oil at record pace despite chaos

By on 8 Jun 2016 in news, notable posts with 0 Comments
Iraq is pumping oil at record pace despite chaos

(Hellenic Shipping News) Iraq is pumping more oil than ever before, even as ISIS-fueled chaos grips parts of the Middle Eastern country.

Iraq, which relies on oil to fund nearly its entire government, increased daily oil production to an all-time high of 4.5 million barrels in May, according to estimates from research firm JBC Energy.

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Oil demand to peak in 2030 as energy experts slash forecasts

By on 6 Jun 2016 in news, notable posts with 0 Comments
Oil demand to peak in 2030 as energy experts slash forecasts

(The Telegraph) McKinsey has slashed their forecasts for the world’s energy use even as global economic growth climbs Global oil demand could peak by the end of the next decade even as global economic growth climbs.

The latest downward revision to forecasts, from consulting firm McKinsey, could leave major new investments uneconomic if demand for energy fails to meet expectations.

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Rising Investment Requirements Show Oil’s Irreplaceability

By on 5 Jun 2016 in analysis, notable posts with 0 Comments
Rising Investment Requirements Show Oil’s Irreplaceability

(Forbes) When Wood Mackenzie reported in the Fall that $1.5 trillion in potential global oil projects were uneconomic oil cost $51 a barrel, about what it costs now. The industry is making big cuts in CAPEX and upstream investments, and more than $200 billion in oil and gas investments evaporated in 2015. There’s still about 1.3 million b/d of surplus oil on the global market, and just the other day “OPEC Fails to Reach Agreement on Oil Production Ceiling.”

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The Oracle of Oil: The man who predicted peak oil

By on 1 Jun 2016 in analysis, notable posts with 0 Comments
The Oracle of Oil: The man who predicted peak oil

(New Scientist) THIS is a curious time to publish a biography of M. King Hubbert. The story of how this brilliant but irascible Shell geologist accurately forecast in 1956 that US oil production would peak and go into terminal decline by 1970 is by now well worn. Worse, after the supply crunch of 2008 that sent the price soaring to $147 per barrel and was widely mistaken for the global peak, the world is now swimming in oil once more, and the price languishes at around $50.

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OPEC Dying of Self-Inflicted Wounds

By on 31 May 2016 in analysis, notable posts with 0 Comments
OPEC Dying of Self-Inflicted Wounds

(Bloomberg) OPEC’s meetings in Vienna have for decades offered a heady mix of wealth, power and intrigue. The latest one may feel more like a wake.

The closest OPEC came to operating like a true oil cartel was in the early 1970s. Back then, it controlled more than half the world’s oil supply and was more or less aligned in trying to manage pricing and, for many members, throwing off the remnants of colonialism.

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Superinvestor Jeremy Grantham Says Oil Will Come Roaring Back

By on 31 May 2016 in news, notable posts with 0 Comments

(seekingalpha.com) If you have been following what we have been writing you will know that we have become bullish on oil (NYSEARCA: USO ) prices for the next few years.

As with most of our opinions we have arrived at this one by listening to what some of the world’s best investors are saying about oil and why they are saying it.

We believe that Jeremy Grantham is another voice worth paying attention to, and it turns out that he too believes oil is going higher, perhaps significantly so. Source: GMO.

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Brent oil breaks above $50 for first time in seven months

By on 26 May 2016 in news, notable posts with 0 Comments
Brent oil breaks above $50 for first time in seven months

(Reuters) Brent oil futures climbed above $50 a barrel on Thursday for the first time in nearly seven months as a global supply glut that plagued the market for nearly two years showed signs of easing.

Oil prices have rallied in recent weeks as a string of outages, due in part to wildfires in Canada and unrest in Nigeria and Libya, knocked out nearly 4 million barrels per day of production.

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2015 Worst Year For Oil Discoveries Since 1952

By on 25 May 2016 in news, notable posts with 0 Comments
2015 Worst Year For Oil Discoveries Since 1952

(oilprice.com) A report by Rystad Energy has revealed that new oil discoveries in 2015 totaled 12.1 billion barrels, which is the least amount of new oil discovered in a single year since 1952.

Last year was also the fifth year in a row in which the amount of new reserves discovered was smaller than in the previous year.

E&Ps have slashed their exploration budgets repeatedly in a bid to weather the effects of the oil price drop. They’ve laid off hundreds of thousands of staff and have focused on staying afloat, lacking not just the money, but also the motivation to look for new oil when profitability is questionable.

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Oil Industry Headed for Record Third Straight Year of Cutbacks

By on 25 May 2016 in news, notable posts with 0 Comments
Oil Industry Headed for Record Third Straight Year of Cutbacks

(Bloomberg) Global crude supplies will start to dwindle in as little as two years, boosting prices, as the industry cuts investment to weather the worst market collapse in a generation, according to Statoil ASA.

Oil companies reduced capital expenditure last year and are likely to cut it further this year and next, Statoil’s Chief Financial Officer Hans Jakob Hegge said in an interview in London. Lower spending means there could be a “significant effect” on crude supply after 2020, he said.

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Returning To Market Balance: How High Must Prices Be To Save The Oil Industry?

By on 16 May 2016 in analysis, notable posts with 0 Comments

(artberman.com) The global oil market is returning to balance based on the latest data from the EIA. That should mean higher oil prices but how high must prices be to save the industry?

Data suggests that oil producers need prices in the $70-80 range to survive. That is unlikely in the next year or so. Without more timely price relief, the future looks grim for an industry on life support.

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Halliburton CEO on an “unsustainable market”

By on 25 Apr 2016 in quotes with 0 Comments

“What we are experiencing today is far beyond headwinds; it is unsustainable. My definition of an unsustainable market is one where all service companies are losing money in North America, which is where we are now.”

Jeff Miller, President of oil services company Halliburton

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Peak Oil Review – 25 April 2016

By on 25 Apr 2016 in Peak Oil Review with 0 Comments

Market sentiment has switched to the opinion that prices are not going much lower, despite warnings from Goldman Sachs and other respected observers that there is no fundamental support for higher prices at this time. Last week various pieces of slightly bullish news that are usually are ignored by the markets were enough to move prices higher for the eighth time in the last ten weeks. Crude now is up 67 percent since February, closing on Friday at $43.73 in New York and $45.11 in London.

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Bloomberg reporter on Wall Street & oil

By on 18 Apr 2016 in quotes with 0 Comments

“Wells Fargo’s foray into oil shows how Wall Street misjudged the risks hidden in an esoteric type of energy financing long thought to be bulletproof.”

Asjylyn Loder, Bloomberg News

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Meet Us in DC, June 25-29

By on 4 Apr 2016 in event with 0 Comments
Meet Us in DC, June 25-29

Join us in Washington DC in late June for a combination of events that promise to be engaging, educational, and downright enjoyable. International Society for BioPhysical Economics 2016 Conference June 26-29, University of the District of Columbia The International Society for Biophysical Economics is the foremost organization for research and scholarship on the interconnections among energy, resources, […]

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Former OPEC insider tells how global oil pricing got flipped on its head

By on 3 Apr 2016 in analysis, notable posts with 1 Comment
Former OPEC insider tells how global oil pricing got flipped on its head

(The National) From 2004 to 2008 and 2010 to 2014, oil production and prices both rose. The price increases were completely divorced from the market principle of a supply-demand balance. In the middle of 2014, the price momentum ran out of steam and prices began sinking in a bog of unconsumed, overproduced, expensive new oil.

That market disorder should have been a reason for concern. Unfortunately, greed suppressed the voices that raised the alarm and warned of the long-term dangers of short-term gains.

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