(Peak Oil Barrel) Guest post by Verwimp Bruno.
Peak Oil is the moment in time when, on a global scale, the maximum rate of oil production is reached. The moment after which oil production, by nature, must decline forever. Since Earth is a closed system, next to this production (supply) event, there must be an equal demand event: Peak Oil Consumption.
If the ban on US oil exports is lifted…] “The net effect of export of American oil on the market is zero. This will have no effect on the price because the U.S. still is an importing country. They export some, but they need to import the same quantity from somewhere else.”
Abdalla El-Badri, Secretary-General of OPEC
“The long-term price of oil is literally unforecastable. The only thing that can be said with absolute certainty is that oil prices will continue to defy the expectations of experts.”
John Kemp, Reuters
“Nothing is economic at today’s prices… We’re drilling the best of the best rock right now. At some point we’ll have to move to lesser-quality rock, which will increase the break-even costs.”
James West, analyst at Evercore ISI
Oil prices continued to fall with London closing on Friday at $36.88, down 3.8 percent for the week, and New York closing at $34.73, down 2.5 percent for the week. A surprise and unexplained jump of 17 units in the US rig count announced on Friday helped the decline. Prices are now approaching an 11-year low. New highs in US crude inventories, including a 1.4 million barrel jump in the stocks at Cushing, Okla., and unusually warm weather across the US and Europe, continue as major reasons for the decline. The outlook for oil prices remains gloomy. OPEC will keep its output at 32 million b/d for the time being and Iran is expected to be increasing its exports in the next few months. Talk of a bargain between OPEC and Russia to jointly lower crude production was quashed by Moscow late last week. Some are now saying that it will take two years to eliminate the excess crude stockpiles after supply and demand are brought back into balance.
(Reuters) As oil traders have learned time and again, picking a bottom in today’s glutted global market can be a fool’s game: just when prices start to rebound, as they have three times this year, a wave of renewed bearishness smacks them back down.
With oil resuming its southward march due to yet more oversupply, closing in on $35 a barrel after trading at $100 in June 2014, any number of factors could indicate when the rout may finally be over – for real this time.
(Reuters) The first response of commodity producers to a drop in prices is normally to increase production – ensuring price falls become deeper and more prolonged.t stimulates production, because farmers try to make up by a larger volume in production the decrease in income resulting from the fall in prices.”
(Bloomberg) As oil crashes through $35 a barrel in New York, some producers are already living with the reality of much lower prices.
(Business Insider) The oil market is still way oversupplied. As a result, prices haven’t been able to recover after falling about 70% in the last year. In the last few weeks as oil prices have collapsed to post-crisis lows a number of factors — both technical and fundamental — have been working against the market.
(Wall Street Journal) Pumpjacks for an oil well near Williston, N.D. What will the global oil market look like in 2016? This year is closing out with the industry in turmoil. The price of oil is hovering in the mid-$30s a barrel, supplies are swamping the market, the U.S. is on the cusp of ending its decades-old oil-export ban, and geopolitical rivalries continue to sow uncertainty.
