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Title: So much for running out of OIL!
Source: [None]
URL Source: [None]
Published: Dec 14, 2015
Author: Me
Post Date: 2015-12-14 09:04:14 by Justified
Keywords: None
Views: 1180
Comments: 20

I remember people claiming we were running out of oil. That we have reached "peak production".

Oil just broke the $35 a barrel with no end in sight of slowing production!

Saudi's have declared war on America. They will destroy shale oil business because its kicking their butt. America was independent of its grip for the first time in my life time. Obama is happy big little oil is getting raped by the Saudi's.

I believe oil can be drilled for $30 a barrel and break even.

I believe oil can be pumped out of the ground for $14 a barrel and break even.

Get ready to see defaults in the small oil companies because $25 a barrel is coming.

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#1. To: Justified (#0)

I believe oil can be drilled for $30 a barrel and break even.

You can believe the world is flat but that doesn't make it so.

The shale oil guys keep saying that their breakeven is $65/bl. They continue to pump the oil they have at a loss, hoping to outlast the bad prices. But more and more of them are zombie companies in the red. And no one has money to launch more exploration or develop new wells. This is the Saudi goal. They only have to do it for a few years to squash American production in the short term.

The Saudis continue to pump way below cost, subsidizing oil exports to around $100 billion a year. They supposedly have a cash surplus of $700-$800 billion in loose cash they can use to subsidize their oil losses and cripple American oil production.

They want all that exploration to stop and, for wells already pumping, they want to see the inevitable decline in production from such wells. Then it will be time for the Saudis to jack the price back up. But they have to worry that they can't ever go back to $100/bl again without seeing the American oil industry make another big comeback with new wells.

Tooconservative  posted on  2015-12-14   9:19:49 ET  Reply   Trace   Private Reply  


#2. To: TooConservative (#1)

We should suck them dry. Buy it all up. They are stupid.

A K A Stone  posted on  2015-12-14   9:28:01 ET  Reply   Trace   Private Reply  


#3. To: TooConservative (#1)

I believe you have it right about the Saudi's and their intentions.

I think the cost of getting shale oil is much lower than $65 a barrel break even(not counting ocean rigs).

Justified  posted on  2015-12-14   9:50:23 ET  Reply   Trace   Private Reply  


#4. To: Justified (#3)

I believe you have it right about the Saudi's and their intentions.

I think the cost of getting shale oil is much lower than $65 a barrel break even(not counting ocean rigs).

Yeah. But it is still stupid.

Why lose money when you don't have to? How many years will it take them to make it back up if TC is correct?

If a bunch of our guys go out of business. That isn't good. But when prices rise again there will be people doing shale again. So the Saudis gain nothing.

A K A Stone  posted on  2015-12-14   9:54:26 ET  Reply   Trace   Private Reply  


#5. To: A K A Stone (#2)

" We should suck them dry. Buy it all up. "

Yeah, I guess we could. But who would fork over the cash? Where would they put it?

Maybe the Fed Govt could use SS receipts to buy it. Would be much, much better than T-Bills.

Si vis pacem, para bellum

Those who beat their swords into plowshares will plow for those who don't

Rebellion to tyrants is obedience to God.

There are no Carthaginian terrorists.

“The object of war is not to die for your country but to make the other bastard die for his.” - George S. Patton

Stoner  posted on  2015-12-14   10:01:10 ET  Reply   Trace   Private Reply  


#6. To: TooConservative (#1)

The shale oil guys keep saying that their breakeven is $65/bl.

Yeah,and Obomber and Mrs Bubba really ARE two of the smartest people on the planet.

That $65 price includes their idea of what constitutes "adequate profits" after expenses. Which no doubt includes private jets and mansions for their girlfriends and children,not to mention the money to buy politicians to park cars at their parties.

Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority? (Ron Paul,2012)

American Indians had open borders. Look at how well that worked out for them.

sneakypete  posted on  2015-12-14   10:02:29 ET  Reply   Trace   Private Reply  


#7. To: TooConservative, Justified, All (#1)

The Saudis continue to pump way below cost, subsidizing oil exports to around $100 billion a year. They supposedly have a cash surplus of $700-$800 billion in loose cash they can use to subsidize their oil losses and cripple American oil production.

Ah, the Suadi's lose a little bit on every barrel they sell but make it up on volume. Got it. Thanks for clearing that up for us.

потому что Бог хочет это тот путь

SOSO  posted on  2015-12-14   11:22:20 ET  Reply   Trace   Private Reply  


#8. To: SOSO (#7)

Ah, the Suadi's lose a little bit on every barrel they sell but make it up on volume.

Actually, yes. They make it up after they run our producers and our active wells out of oil. It only takes a few years. Then they can jack the price up again. And if we do start exploring again, it takes 2-3 years before we can get our own oil flowing again. That 2-3 years at $90 or $100 a barrel helps the Saudis recoup their current losses to build up their nest egg for the next time they decide to crash oil prices to stop American oil again.

Tooconservative  posted on  2015-12-14   13:52:14 ET  Reply   Trace   Private Reply  


#9. To: TooConservative (#1)

If we listen to the Trumpsters then we should slap all types of tariffs and fees on Saudi oil to prop up the prices to make American production competitive . Maybe we should embargo Saudi imports and tell Americans they should only buy American sources . You know saving American jobs and all that .Wonder if they would like to go back to paying $4-5 dollars + a gallon again ?

Quis custodiet ipsos custodes?

tomder55  posted on  2015-12-14   15:34:19 ET  Reply   Trace   Private Reply  


#10. To: A K A Stone (#4)

Why lose money when you don't have to? How many years will it take them to make it back up if TC is correct?

If a bunch of our guys go out of business. That isn't good. But when prices rise again there will be people doing shale again. So the Saudis gain nothing.

They strangle the baby in the crib, just like they did in the 80's. When oil was at $100 per bbl everyone was screaming "DRILL DRILL DRILL, but once the results of shale force the Saudi dirtbags to flood the markets, folks just want to reap the bonanza and let the devil take the hindmost. Americans are like the monkeys that had a leaky roof, when it was raining they could not patch it, and when the weather was nice there were better things to do than to patch the roof.

And we lose money as taxpayers in the bargain defending the Saudi oil. The Muddle East will be stuck to us like tarbaby because we'll need the oil. Better to place tariffs on imported oil to cover our military costs, we will pay more and OPEC will get less, the difference going into the coffers of the US government so the Saudis no longer get a free ride on the back of the American taxpayer.

My vision is that we need less oil from them each year, while they are forced to liquidate their investments in America to finance a Sunni-Shia 30 years war. I'd gladly pay another 50 cents per gallon at the pump to see that, and anyway it would just be a change in where the taxes are collected, because I'm already paying for those military costs through the income tax.

If we're going to be at war with Islam, the whole nation needs to be at war, not just the military. Economic warfare does that, the Saudis are already waging economic war against us, just like the chicoms are. We just don't fight back.

Non auro, sed ferro, recuperando est patria

nativist nationalist  posted on  2015-12-14   16:35:43 ET  Reply   Trace   Private Reply  


#11. To: TooConservative (#8)

Actually, yes. They make it up after they run our producers and our active wells out of oil. It only takes a few years. Then they can jack the price up again. And if we do start exploring again, it takes 2-3 years before we can get our own oil flowing again. That

I guess you never heard of shut-in production. Check it out.

потому что Бог хочет это тот путь

SOSO  posted on  2015-12-14   19:43:51 ET  Reply   Trace   Private Reply  


#12. To: SOSO (#11)

I guess you never heard of shut-in production. Check it out.

I don't think it applies. Look at zombie oil companies, as they call them. They're riding down their losses and depleting their biggest production runs out of existing wells and have no money to explore for new high-volume wells.

So I don't think shut-in designation applies to the current market's problems in any significant way.

Tooconservative  posted on  2015-12-14   20:29:05 ET  Reply   Trace   Private Reply  


#13. To: Justified (#0)

"peak production"

It is a FACT because most oil has been mined and consumed that was relatively easy and efficient to bring to the markets. What you are witnessig is a temporary phenomena in technology that will eventually wither away, too.

Moreover, OPEC has glutted the market with oil just to break any and all new technologies that America has created to produce oil. This marketing force drives prices down, so much so, OPEC is not creating the profit margins they used to.

buckeroo  posted on  2015-12-14   21:14:18 ET  Reply   Trace   Private Reply  


#14. To: TooConservative (#12)

So I don't think shut-in designation applies to the current market's problems in any significant way.

Can you put some data to support your contnetion? It is a relatively easy thing to do to shut-in a well. True that there may be some lost production capability when you go to restart production but none-the-less the proven reserves are still there ready to be produced. Also Saudi is but one of the top three producing nations. It knows how and more importantly when to play the game. Russia is also in the mix.

I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else.

потому что Бог хочет это тот путь

SOSO  posted on  2015-12-14   21:43:11 ET  Reply   Trace   Private Reply  


#15. To: SOSO (#14)

Can you put some data to support your contnetion?

The only article I read indicated the companies are riding down the price, not shutting down the wells to wait for a brighter day with higher oil prices.

However, they are not going to shut down these wells and then restart them quickly. The price of the oil has to remain high enough for long enough to justify opening them again and the ancillary costs of pumping and transporting the oil to market. You aren't just turning on a spigot; it involves a lot more than that.

Tooconservative  posted on  2015-12-15   1:32:27 ET  Reply   Trace   Private Reply  


#16. To: SOSO, TooConservative (#14)

I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else.

Price isn't determined by supply alone, but by supply AND demand. The GLOBAL price of Oil was driven to $100/bbl by the phenomenal growth of the Chinese economy... Now you have a situation where the Chinese economy is faltering, OPEC has turned on the spigots full blast, and the GLOBAL price of oil is tanking.

Willie Green  posted on  2015-12-15   7:09:53 ET  Reply   Trace   Private Reply  


#17. To: Willie Green (#16)

America also has a glut of oil. All our oil storage tank farms are full.

With that much oil already in the pipeline, there is less volatility in the market. Despite ISIS threatening Mideast oil somewhat, we don't see nervous speculators running the price of oil up on fears that there might be a disruption to oil supply globally.

Tooconservative  posted on  2015-12-15   9:07:35 ET  Reply   Trace   Private Reply  


#18. To: Willie Green, TooConservative (#16)

I never understood why oil ever reached $100/bbl as the marginal cost of production was always well below that. IMO the reason why oil is now about $35/bbl has more to do with the climate change maniacs than anything else. Price isn't determined by supply alone, but by supply AND demand. The GLOBAL price of Oil was driven to $100/bbl by the phenomenal growth of the Chinese economy... Now you have a situation where the Chinese economy is faltering, OPEC has turned on the spigots full blast, and the GLOBAL price of oil is tanking.

Trust me on this, I am well familiar with the economic concept of supply and demand. Also trust me on this, the global price of oil has not solely been determined by supply-demand conditions for decades now. If that were true we would already have built the Keystone pipeline (as just one small example).

потому что Бог хочет это тот путь

SOSO  posted on  2015-12-15   11:35:30 ET  Reply   Trace   Private Reply  


#19. To: SOSO (#18)

If that were true we would already have built the Keystone pipeline (as just one small example).

At today's price, it looks like that would've been a money-losing investment anyway.

Willie Green  posted on  2015-12-15   11:56:06 ET  Reply   Trace   Private Reply  


#20. To: Willie Green (#19)

If that were true we would already have built the Keystone pipeline (as just one small example).

At today's price, it looks like that would've been a money-losing investment anyway.

Not if it was built 3-4 years ago.

потому что Бог хочет это тот путь

SOSO  posted on  2015-12-15   12:07:50 ET  Reply   Trace   Private Reply  


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