“U.S. production is about to have a Wile E. Coyote moment where it literally falls off a cliff. One-hundred-and-twenty-thousand barrels, maybe even next month, will drop off…. The supply and demand mismatch will probably come in 2017.”
Emad Mostaque, analyst with London-based consultancy Ecstrat
“The message from oil services firms is that shale drillers will not simply be able to turn the tap back on again once prices rise. Halliburton said on its earnings call last month that pressure pumping equipment currently sitting idle was being cannibalized for parts while the stuff still being used was being worked to its limits. And the falling backlog of uncompleted wells will also begin to make an impact.”
Liam Denning, Bloomberg View columnist
Exxon Mobil and climate change spin: “This could open up years of litigation and settlements in the same way that tobacco litigation did, also spearheaded by attorneys general. In some ways, the theory is similar — that the public was misled about something dangerous to health. Whether the same smoking guns will emerge, we don’t know yet.”
Brandon L. Garrett, professor at the University of Virginia School of Law
“”The industry is under so much pressure that you need to have a clear plan. You need to balance capital expenditure against production. Our capex in 2015 will be around 30 percent lower than in 2014.”
BG Group CEO Helge Lund [Q: how will that impact production in 3-5 years?]
“We are witnessing the total collapse of Venezuela’s economy. A contraction of these proportions might be a unique case in the last 50 years in the world. This never happens. Even Iraq’s GDP didn’t fall proportionately during the war.”
Alexander Guerrero, economist and head of the firm Techno-Economic.
“Who is the top forecaster in the oil market? The surprising answer is that nobody knows because the accuracy of predictions is never properly tracked and measured after they are made…Weather forecasts have improved enormously over the last 50 years because they have been subjected to rigorous analysis. It is far less obvious that forecasts for oil prices and other financial markets have become any better. If we demand accuracy and accountability from weather forecasters and intelligence specialists, shouldn’t we do the same from oil market forecasters?”
John Kemp, energy columnist for Reuters
“China was always seen as the kind of wonder market that was going to grow and need so much LNG that people got somewhat carried away.” Chinese LNG imports are down 3.5% this year, compared with a 10% rise in 2014.
Howard Rogers with the Oxford Institute for Energy Studies and a former gas executive at BP
“We went through that four-month window where [natural gas prices] just went sideways and they didn’t stop pumping that whole time. This could be one of those ugly seasons for futures.”
Dean Hazelcorn, trader at the Coquest Inc. brokerage in Dallas.
“If we stay at this [sub-$50 oil] price longer, then a third to a quarter of the [US] industry will go bankrupt. More activity could drive production, but that takes money and the US industry doesn’t have it anymore. We don’t believe that US production can grow at $50, $60, or even $70. It will likely take $80 per barrel cash flows to return the US from decline to growth.”
Walker Moody, Managing Director of Energy Investment firm Tudor, Pickering, Holt & Co.
““I believe that arctic oil is not for today, and not for tomorrow — maybe for the day after tomorrow,”
Fatih Birol, incoming Director of the IEA
