Category:

Billions of Barrels of Oil Vanish in a Puff of Accounting Smoke

(Bloomberg) In an instant, Chesapeake Energy Corp. will erase the equivalent of 1.1 billion barrels of oil from its books.

Across the American shale patch, companies are being forced to square their reported oil reserves with hard economic reality. After lobbying for rules that let them claim their vast underground potential at the start of the boom, they must now acknowledge what their investors already know: many prospective wells would lose money with oil hovering below $40 a barrel.

Posted On : Published By : aspo-usa
Category:

What Went Wrong in Oil-Price Forecasts?

(Wall Street Journal) This was supposed to be the year oil prices turned around.

Ten banks surveyed by The Wall Street Journal in March predicted that U.S. crude would average $50 a barrel or better in the fourth quarter. December 2015 futures contracts were selling for $63.82 a year ago.

Posted On : Published By : aspo-usa
Category:

Oil Spending Seen Down $70 Billion Next Year, Rystad Says

(Bloomberg) Reduced spending by oil explorers will lead to a global shortage of crude within the next few years, according to industry consultant Rystad Energy.

While the world’s exploration and production companies need to replace 34 billion barrels of oil every year to meet consumption needs, the companies made investment decisions that will result in only about 8 billion barrels in 2015, Rystad said in a report released Wednesday.

Posted On : Published By : aspo-usa
Category:

Oil prices may go even lower in 2016: IEA’s Birol

(CNBC) Oil prices pared some of their losses on Wednesday after falling to near seven-year lows earlier in the week, but those hoping for a rebound next year may be disappointed.

Fatih Birol, the executive director of the International Energy Agency (IEA), told CNBC that crude prices could continue to fall in 2016, presenting a challenge to governments that are trying to encourage the use of relatively expensive sustainable energy.

Posted On : Published By : aspo-usa
Category:

The real danger of the oil collapse

(CNBC) The collapse of the housing bubble sent the world spiraling into recession. The collapse of the energy and commodity bubble threatens to be just as damaging. That few are willing to even use the term “bubble” with regard to the boom and bust in the price of oil, copper, iron ore, and other materials tells how early we still are in the painful unwind phase.

Posted On : Published By : aspo-usa
DPR Totals
Category:

EIA Says Shale Continues to Decline

(Peak Oil Barrel) The EIA’s Drilling Productivity Report has US shale oil on a steep decline. The below shale oil production charts are the EIA’s estimate of what shale production will look like through January 2016. Keep in mind this is the EIA’s estimate and not hard production numbers.

Posted On : Published By : aspo-usa
Category:

Oil Prices: What’s Behind the Drop? Simple Economics

(NY Times) The oil industry, with its history of booms and busts, is in its deepest downturn since the 1990s, if not earlier.

Earnings are down for companies that have made record profits in recent years, leading them to decommission nearly two-thirds of their rigs and sharply cut investments in exploration and production. More than 200,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply.

Posted On : Published By : aspo-usa
Category:

Peak Oil Review – 7 Dec 2015

The long-awaited OPEC decision came on Friday. With the Saudis and their close allies adamant that they would not cut production unless Russia and Iran and other OPEC members agreed to cut too, the meeting had no where to go but to continue existing policies. Indonesia was readmitted into the cartel and the output ceiling was adjusted to 31.5 million b/d reflecting the realities of the addition of Indonesia and of actual current production. While the cartel will reconsider the issue in June, the final decision led to considerable pessimism among traders. Global over-production is now running some 1.8 million to 2 million b/d and there is a good possibility that Iran will add at least another 500,000 b/d to the glut in the first six months of 2016. OPEC is hoping that stronger demand for oil will erase at least some of the over-production next year, but many see overproduction continuing into 2017.

Posted On : Published By : Tom Whipple
Category:

Oil prices and budgets:The OPEC countries most at risk

(CNBC) Plunging oil prices have left many crude-exporting countries with budgets that simply won’t balance.

For many of the biggest producers — places like Saudi Arabia, Venezuela and Algeria — oil accounts for the majority of the country’s exports and gross domestic product. Collapsing prices have meant dramatic declines in government revenue at a time when many political leaders are working to maintain social stability through liberal spending.

Posted On : Published By : aspo-usa
Category:

Energy companies choose storing oil over selling it cheap

(CNBC) Just a few miles from Houston’s Astrodome, a cluster of subterranean salt caverns will soon be able to store enough oil to fill the famed stadium.

By the end of 2016, phase I of Fairway Energy Partners’ Pierce Junction crude oil storage facility will come online, touting three caverns capable of socking away a combined 10 million barrels of black gold.

Posted On : Published By : aspo-usa
Category:

Peak Oil Review – 30 Nov 2015

Oil prices were little changed last week despite the the downing of the Russian warplane which temporarily sent prices higher on fears of a wider conflict affecting prices. At week’s end New York futures were down 19 cents for the week at $41.71 and London’s Brent was up 20 cents at $44.86. For November, oil prices will be down about 9 percent. There seems to be general agreement among observers that prices are headed still lower. Moscow announced that it will not be sending a high-level official to the OPEC meeting thereby foreclosing on the hints that Russia and OPEC were about to come up with a deal to cut production and raise prices.

Posted On : Published By : Tom Whipple
Category:

The $30 Oil Cliff Threatening Russia’s Economy

(Bloomberg) For Russia, $30 is the number to watch. Crude prices at that level will push the economy to depths that would threaten the nation’s financial system, according to 15 of 27 respondents in a Bloomberg survey. Lower prices for the fuel are next year’s biggest risk for Russia, which is unprepared to ride out another shock on the oil market, most economists said. Other dangers for 2016 include geopolitics, strains in the banking industry and the ruble, according to the poll of 27 analysts.

Posted On : Published By : aspo-usa
Category:

Could Cuts in CAPEX Be the Catalyst For Growth in Oil Prices?

(RigZone.com) North American upstream companies continue to slash spending but demand growth could turn that around within the next 18 to 20 months. Cuts to capital spending in the North American exploration and production (E&P) sector is a stark reminder that during much of the year companies have had to tighten their belts in response to dismal crude oil prices. Estimates show that cuts have hit 30 percent in 2015, and could drop another 20 percent in 2016.

Posted On : Published By : aspo-usa
Category:

A Surprising Look at Oil Consumption

(PeakOilBarrel.com) The EIA publishes oil consumption numbers for all major nations. However they have data for most nations only through 2013. They do have data for some nations through 2014. Nevertheless a lot can be gleaned from just looking at those consumption numbers.

Posted On : Published By : aspo-usa