(oilprice.com) It’s a safe bet that investors are getting increasingly tired of all the conflicting forecasts about oil and gas prices. Some argue that oil is heading back to $20 thanks to the continuing excess supply. Others claim that the excess is overestimated and crude is well on its way to reach $80 or more by the end of the year. The likely truth, as usual, is somewhere in the middle, at least for the time being.
(artberman.com) Two years into the global oil-price collapse, it seems unlikely that prices will return to sustained levels above $70 per barrel any time soon or perhaps, ever. That is because the global economy is exhausted.
The current oil-price rally is over as I predicted several months ago and prices are heading toward $40 per barrel.
Oil has been re-valued to affordable levels based on the real value of money. The market now accepts the erroneous producer claims of profitability below the cost of production and has adjusted expectations accordingly. Be careful of what you ask for.
Meanwhile, a global uprising is unfolding.
(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.
Read full post at www.artberman.com
(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.
(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.
(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.”
(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.
(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.
(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.
