(ArtBerman.com) Only 1% of the Bakken Play area is commercial at current oil prices. 4% of horizontal wells drilled since 2000 meet the EUR (estimated ultimate recovery) threshold needed to break even at current oil prices, drilling and completion, and operating costs.
The leading producing companies evaluated in this study are losing $11 to $38 on each barrel of oil that they produce, the very definition of waste.
(bakkenshale.com) More energy companies are exiting the Bakken Shale Play as they struggle to adapt to the prolonged low oil prices.
(FORBES) As an investor in start-up companies, I am always working to test my assumptions and update my understanding of where the energy sector is now, and the direction it is moving in towards the future. Some key questions for this dynamic year: Is the current oil crisis the marking of a step change towards a cleaner energy industry or merely history repeating itself? While today’s oil price at $45-50 per barrel is probably too low to be considered the new normal, what should we expect moving forward?
(Bloomberg) Goldman Sachs Group Inc. went short oil and gas companies last quarter, bringing its total exposure to the industry below $12 billion for the first time since it started breaking out that risk to investors at the end of last year.
(Reuters) PBF Energy Inc, one of the largest independent oil refiners in the United States, spent heavily in recent years to build the rail terminals at its Delaware City complex that it needed to take delivery of large loads of crude coming from North Dakota’s Bakken oil fields.
But now it is considering eliminating those deliveries altogether, and replacing them with foreign crude imports, according to two sources familiar with the situation. It has even closed its small Oklahoma City office that was only opened in 2013 and had served as a hub for the company’s trading in North Dakota’s oil, the sources said.
(Platts) Platts Energy Economist Managing Editor Ross McCracken takes a look at OPEC’s spare crude production capacity. Much has been made recently of the US’ new spare capacity, but OPEC’s role has also shifted, as he explains.
OPEC’s spare production capacity is estimated by the US Energy Information Administration at 1.54 million b/d, a mere 180,000 b/d above the level reached in 2008 when oil prices hit their record high. But don’t panic! Oil inventories are at very high levels. The International Energy Agency puts global oil stocks at 147 million barrels, which it notes could notionally deliver 1.6 million b/d for just over 90 days in the event of a major supply disruption.
(Washington Post) Royal Dutch Shell reported weak third quarter earnings Thursday morning, hobbled by a triple whammy of low oil prices and losses related to suspended projects in the Arctic and Canadian tar sands. The company lost $6.1 billion overall in the quarter, compared with a gain of $5.3 billion a year earlier.
View full article here: www.washingtonpost.com
(Bloomberg) Saudi Arabia may run out of financial assets needed to support spending within five years if the government maintains current policies, the International Monetary Fund said, underscoring the need of measures to shore up public finances amid the drop in oil prices.
View full article here: www.bloomberg.com
(ArtBerman.com) The problem with oil prices is that they are not low enough.
Current oil prices are simply not low enough to stop over-production. Unless external investment capital is curtailed and producers learn to live within cash flow, a production surplus and low oil prices will persist for years.
(Resource Insights) We all know Goldilocks from the story of Goldilocks and the Three Bears in which the young maiden wanders into the home of the bears and samples some porridge that happens to be sitting on the dinner table. The first bowl is too hot, the second is too cold and the third is just right.
Like a corporate version of Goldilocks, the oil industry has been wandering into the world marketplace in recent years often finding an oil price that is either too high such as in 2008 and therefore puts the brakes on economic growth undermining demand and ultimately crashing the price as it did in 2009. Or it finds the price too low as it is today therefore making it impossible to earn profits necessary for exploiting the high-cost oil that remains to be extracted from the Earth’s crust.
(Foreign Policy) The U.S. House of Representatives is expected to vote on Friday to do something that would have been unthinkable only a few years ago: lift the restrictions on exporting domestically produced crude oil that have been on the books since the 1970s. It’s a topic that is definitely heating up in Washington: During a Senate hearing Tuesday on energy security, in which I testified about the importance of ensuring that the 40-year-old Strategic Petroleum Reserve can continue to be effective in an emergency, the questioning was overwhelmed by senators asking U.S. Energy Secretary Ernest Moniz to lift the restriction. The move, which many U.S. oil producers cheer, comes at a bleak moment for them.
(EconBrowser) Could the price of oil be a value such that the current quantity produced exceeds the current quantity consumed? The answer is yes, and indeed that has been the case for much of the past year.
(Washington Post) It may be the most important number on Earth: 1,000 gigatons. That’s roughly how much carbon dioxide humanity has left to emit, scientists say, in order to have a two-thirds chance of keeping global warming below 2 degrees Celsius above the temperature in pre-industrial times — and thus, staying within what has often been deemed a “safe” climate threshold.
(UPI) Weak economics in the energy sector may lead to a general decline in total U.S. crude oil production, a short-term federal market report finds.
View full article here: www.upi.com
(Bloomberg) Somewhere amid the maze of wells that Murphy Oil Corp. has scattered across Texas’s sprawling Eagle Ford shale formation, Brett Pennington is carrying out a little experiment.
(CNN) New oil and gas production projects worth $1.5 trillion are at risk because of plunging prices. Research firm Wood Mackenzie said the planned projects are unlikely to go ahead because they’re uneconomic at current prices of less than $50 a barrel.
View full article here: money.cnn.com
(NY Times) HOUSTON — For the better part of the last century, crude oil prices have swung like a pendulum, pushing and pulling the fortunes of nations. More often than not, global supplies of the volatile commodity were controlled by the rulers of desert domains who would otherwise have been powerless had it not been for the oil that bubbled beneath their thrones.
By Art Berman. Reprinted from ArtBerman.com World oil demand increased by 1.1 million barrels per Continue Reading
By Robert L. Hirsch. The recent world oil supply/price decline situation looks very much like Continue Reading
By Steve Andrews. BP just released its latest annual Statistical Review of World Energy. ASPO-USA Continue Reading
By Roger Blanchard. The following analysis uses “well completion information” contained in a newspaper called Continue Reading
By: Jeffrey J. Brown (Note: Commentaries do not necessarily represent the position of ASPO-USA) Several Continue Reading
By: Jeffrey J. Brown (Note: Commentaries do not necessarily represent the position of ASPO-USA.) In Continue Reading
In the last year I’ve read several articles expounding on the many non-OPEC* oil discoveries Continue Reading
