sell! sell! sell!

[CHOPTALK]

Isn't the benefit of shale that it can start/stop production much faster than conventional wells? So if oils hit 55, 60, then shale drillers will step in and fill the need for more demand.

This is how I always understood why the near-term upside was limited even if oil goes up again.

Completely false.
I have no idea why that's being said.
Could not be further from the truth.

Much more difficult to start and stop and start a tight formation .

The cost is more also.
And the fact that the reservoirs generally don't yeild nearly as much hydrocarbons as most wells makes them very cost prohibitive at anything less then $60 a barrel in most cases

 

[CHOPTALK]

The big headlines you gonna read about 3 or 4 months from now when oil spikes 20 a barrel in a single month is the depletion and draw down happened much more rapidily then they expected.

Thats what's gonna happen unless OPEC has been holding back .

But all projections say they are expected to decline by about a million barrels a day not counting Iran vs last year

 

[tiznow]

One of the problems is oil did not gradually fall based on supply like it was supposed to.

This buildup just did not show up overnight .

For some reason everyone ignored for a long period of time.

So the investments and the projects did not slow down in conjunction with the buildup at an equal speed.

The prices should Have been gradually coming down over a long period of time rather then this abrupt sudden drop.

Until very recently we have been spending and investing based on 100 oil instead of tapering off gradually.

Now we are going in the complete opposite direction going to almost a complete stop and now it's going to go the other direction.

when you cut rates to zero and keep them there for who knows how long it will last .. Malinvestment and bubbles are going to pop up somewhere.. In this case some of it filtered to oil industry..

the he other big area is corporate share buyback (buying back your own stock at historically rich valuations bad investment) and m&a boom good for corporate bottom line near term but not good for the consumer (more monopolies) or the workers (lots of consolidation layoffs) long term..

We need to just cut rates to negative like Japan and keep digging that'll do the trick!!

 

[tiznow]

The big headlines you gonna read about 3 or 4 months from now when oil spikes 20 a barrel in a single month is the depletion and draw down happened much more rapidily then they expected.

Thats what's gonna happen unless OPEC has been holding back .

But all projections say they are expected to decline by about a million barrels a day not counting Iran vs last year

Think your timing is way off with global recession looming think oil staying down here for at least another 6-12 months if not longer...

 

[CHOPTALK]

My timing could be off but unless OPEC is holding back we gonna shoot up much faster then we came down .

Its a whole lot easier to shut production down then it is to ramp it up.

Thats why it will stay at the highs much longer then it stays at the lows.

 

[CHOPTALK]

Just look how rapidly the rig count is going down.

 

[PatsFan1283]

I looked for putting shale production back on line and couldn't find anything. Thought I had read that before and that there would be ample shale drilling that would keep oil from peak for a little while.

As far as alt-energy goes, probably still atleast 10 years away from making a sizable dent in oil consumption. Battery-tech/production methods improving rapidly but you still need to build a supply chain for vehicles, more efficient grids, storage and a host of other technological hurdles. It is improving rapidly but likely won't play into the pricing of oil for atleast like 8 years. China/India don't have near the infrastructure in place for these types of technologies either.

 

[CHOPTALK]

I looked for putting shale production back on line and couldn't find anything. Thought I had read that before and that there would be ample shale drilling that would keep oil from peak for a little while.

As far as alt-energy goes, probably still atleast 10 years away from making a sizable dent in oil consumption. Battery-tech/production methods improving rapidly but you still need to build a supply chain for vehicles, more efficient grids, storage and a host of other technological hurdles. It is improving rapidly but likely won't play into the pricing of oil for atleast like 8 years. China/India don't have near the infrastructure in place for these types of technologies either.

You getting peak production and peak oil mixed up.

When I say peak production I don't mean that's the max the world is capable of producing .


Im just talking it's the max that can be flowed without further investment and drilling.

We have only consumed about 1 trillion barrels of oil in the history of man using oil.

There is over 3 trillion known retrievable barrels of oil in the ground right now that is known that can be produced with today's know technology.

So we are at least a century away from peak oil.


Im just talking peak production .

Right now non OPEC countries are flowing at peak production right now and that number is about to decline rapidily with the almost 2 trillion dollars that has been cancelled in the last year due to low oil prices.

Since we are only producing about 1.5 million barrels a day more then we use it will not take long for that 1.5 surplus to turn into a deficit.

Then you will have rapid draw down on the reserves and all of a sudden we have a world wide shortage with no immediate possibility of making that up in a short period of time.

 

[tiznow]

I looked for putting shale production back on line and couldn't find anything. Thought I had read that before and that there would be ample shale drilling that would keep oil from peak for a little while.

As far as alt-energy goes, probably still atleast 10 years away from making a sizable dent in oil consumption. Battery-tech/production methods improving rapidly but you still need to build a supply chain for vehicles, more efficient grids, storage and a host of other technological hurdles. It is improving rapidly but likely won't play into the pricing of oil for atleast like 8 years. China/India don't have near the infrastructure in place for these types of technologies either.

Global energy demand continues to soar even as China gdp growth slows .. Alt energy will continue to struggle to keep up.. They building a lot of nukes (only thing that makes logical sense to make a major dent in fossil fuel consumption as we discussed before but people don't want in their backyards) in China/india cause they got no other choice..

 

[tiznow]

Curious to see what number oil bottoms at .. Don't think last low at 27-28 was it already back to 30 in Wtic.. As I expect this coming recession/Bear to have some major teeth..

High teens-Low 20s my random guess..

 

[PatsFan1283]

Global energy demand continues to soar even as China gdp growth slows .. Alt energy will continue to struggle to keep up.. They building a lot of nukes (only thing that makes logical sense to make a major dent in fossil fuel consumption as we discussed before but people don't want in their backyards) in China/india cause they got no other choice..

It doesn't take much to disrupt price though. Look at right now, surplus is under 2M barrels a day and price has collapsed.

In the US alone we've chopped 2M barrels a day off consumption over the last 10 years just with more fuel efficient vehicles. Oil has had a complete monopoly on transport energy. If newer technology were to come along and just replace 10-15% of fossil fuel use it would have a big impact on price. I think the US using less and less oil will continue and the long-term price will mostly depend on China/India.

If you have nuclear generating electricity then the battery technology could be here very soon.

GM and LG Chem have said that LG Chem will have the price of lithium-ion battery down to 100 per khw in a few years.

http://www.forbes.com/sites/samabue...-dominating-ev-battery-industry/#277dd84c144d

You would need grid improvements to make all this work but a decade is a long time.

 

[CHOPTALK]

Part of that 2 million that we have chopped off is high oil prices and down economy.
People conserve more when gas is $4 a gallon.

Now that prices are lower people start traveling more and buying bigger vehicles and on and on.

I know that's not the cause of all the 2 million but world wide demand for energy is expected to be 70% more then it is right now 25 years from now. Some of that 70% will be replaced by alternate methods but we are probably more then 100 years away from hydro carbons not being a significant commodity.

There is no question we will be producing less oil on a daily basis then we use less then 6 months from now.

Then we will be reaching into the surplus .

Its gonna take quite awhile to get things going again.

We headed back to $100 oil much sooner then people think.

 

[snoop]

There is no Fed bump schedule in Feb, the market is in air pocket right now. Crude will take out Jan low, then heading to $20-$22, I think it would trade in $20-$40 range for 1-2 years. It could spike sooner if Rubio could manage to pull off the election. He is very determined to undo everything John Kerry has done regarding Iran deal.

 

[tiznow]

It doesn't take much to disrupt price though. Look at right now, surplus is under 2M barrels a day and price has collapsed.

In the US alone we've chopped 2M barrels a day off consumption over the last 10 years just with more fuel efficient vehicles. Oil has had a complete monopoly on transport energy. If newer technology were to come along and just replace 10-15% of fossil fuel use it would have a big impact on price. I think the US using less and less oil will continue and the long-term price will mostly depend on China/India.

If you have nuclear generating electricity then the battery technology could be here very soon.

GM and LG Chem have said that LG Chem will have the price of lithium-ion battery down to 100 per khw in a few years.

http://www.forbes.com/sites/samabue...-dominating-ev-battery-industry/#277dd84c144d

You would need grid improvements to make all this work but a decade is a long time.

price isn't collapsed simply cause of excess production

china growth slowing... Iran.. OPEC .. Industrial production numbers collapsing globally pointing to recession.. Massive amount of uneconomical oil flowing due to massive fed fueled NA fracking bubble.. Commodities tend to lead economic declines in general... Lots of factors working against oil near term..

anywho I guess we'll see ..

Think oil will be screaming buy in year or so... As the next bear plays out.. As production declines and future investment in oil (can't turn spigots on and off quickly) goes to nil for extended period.. As global population and energy needs will continue to soar..

 

[PatsFan1283]

Yeah I know that but if domestic consumption wasn't curbed over the last 10 years then oil would still be in the 60-70range.

If we're really entering a recession then I'd think it would take longer than a year for oil to scream buy. Unless it really begins to start in the very near future.

If we do go into a recession with rates near zirp, when will rates rise? Or will we just go the way of Japan for like a decade? The last 2 big bubble bursts were done when rates were around 5-6% so there was room to cut afterwards.

 

[tiznow]

western economies going Japanese been blatantly obvious for a while now..

markets bottom out fast in grand scheme of market movement.. The repercussions of the fall on the street on the other hand is felt for a long time following the carnage...

 

[tiznow]

World economy now depends on (and has for a while) China India Africa etc.. As those booming populations strive to get outta the poor house and grab some of the goodies (sucking lots of oil and energy in the process) we got..

obviously us/Europe/etc oil demand will continue to fall.. But the rest of the world will continue to outpace the declines by a significant margin..

you our talk about grid improvements etc.. These emerging markets are way behind us in that category.. And have little choice but to use lots of oil and nuclear

 

[tiznow]

China recently rid of one child policy now they are ready to set forth their master plan of global domination as they transform to a consumption society..

World so scroomed

 

[tiznow]

Non manufacturing (services "bright spot in economy") PMI fell and misses consensus.. Starting to ripple into everything as recession momentum builds..

 

[tiznow]

Oil inventories came in high again.. More smack down in progress..

got gold? Quietly continues to perk up after a long sleep..