Saudi Arabia isn’t buying the peak oil demand narrative. OPEC’s largest producer continues to expect global oil demand to keep rising at least by 2040 and sees itself as the oil producer best equipped to continue meeting that demand, thanks to its very low production costs.
Saudi Arabia: We’ll Pump The World’s Very Last Barrel Of Oil Read More »
Why would a company spend millions of dollars to drill an oil well and then not finish it? There are a couple of reasons. Thanks to rapid advancements in drilling technology shale oil wells can actually be drilled faster than they can be completed. This can result in a high inventory of uncompleted wells called “drilled but uncompleted wells (DUCs)”. But when the U.S. Energy Information Administration (EIA) counts DUCs they don’t count the recently completed ones to allow time for completion.
Huge Backlog Could Trigger New Wave Of Shale Oil Read More »
Oil prices are down a bit, but are still close to multi-year highs. That should leave the shale industry flush with cash. However, a long list of U.S. shale companies are still struggling to turn a profit. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and the Sightline Institute detail the “alarming volumes of red ink” within the shale industry.
U.S. Shale Has A Glaring Problem Read More »
An oil price spike is starting to look increasingly possible, with a rerun of 2008 not entirely out of the question, according to a new report.
The outages from Iran are worse than most analysts expected, and bottlenecks in the U.S. shale patch could prevent non-OPEC supply from plugging the gap. To top it off, new regulations from the International Maritime Organization set to take effect in 2020 could significantly tighten supplies.
$100 Oil Is A Distinct Possibility Read More »
For as long as I can remember there has been big talk about the “Oil Shale” in places like Utah, Colorado and Wyoming. According to Wikipedia “The largest oil-shale resource in the world is contained in the Eocene Green River Formation in Colorado, Utah, and Wyoming in three basins: the Piceance Basin, Green River Basin, and Uinta Basin. The Green River oil shales have been the focus of most efforts of the past hundred years to establish an American oil shale industry.” The first attempts to exploit the Green River Basin shale deposit was made by the “Oil Shale Mining Company” way back in 1916. But oil from oil shale is notoriously uneconomical and hard to extract. Generally, the shale is mined and then heated to at least 300 °C (570 °F) to extract the oil, but it works better at between 480 and 520 °C (900 and 970 °F)! The usual process involves massive amounts of super-heated steam (which requires lots of water). The key to economical shale oil is not locating the oil it is developing the right technology to make the process economical (and preferably environmentally friendly). In today’s article Charles Kennedy of Oilprice.com looks at a new method of doing exactly that.
Technological Solution to 100 Year Old Oil Problem Read More »
One of the first lessons in Econ 101 is Supply vs. Demand. If the supply is curtailed and demand stays the same the price will go up. A somewhat later lesson is that Government sanctions reduces supply and drives prices up. The classic example of this is the drug trade. But recent sanctions by the U.S. has had quite the opposite effect (at least temporarily). What has happened is that the U.S. has put trade sanctions on Iran. So Iran is offering its oil at a discount to those willing to go against U.S. wishes and buy their oil anyway. In response Saudi Arabia is offering to match Iran’s price without the risk of offending the United States. So in effect we have a price war (i.e. a race to the bottom). Chances are this won’t last long if the sanction breakers suffer severe enough consequences.
Oil Price War: Saudi Arabia vs. Iran Read More »
The fastest-growing oil region in the U.S. is fueling not only the second American shale revolution—it’s fueling a subculture of drug and alcohol abuse among oil field workers.
Coke, Meth And Booze: The Dark Side Of The Permian Oil Boom Read More »
When reports emerged that India and China are in talks about forming an oil buyers’ club, OPEC was probably too busy with its upcoming June 22 meeting to concern itself with that dangerous alliance. Now, it may be time for it to start worrying.
“The timing is right. The boom in U.S. oil and gas production gives us greater leverage against OPEC,” the Times of India quoted an Indian official as saying last month after the formal start of said talks. The two countries, after all, account for a combined 17 percent of global oil consumption and they are the ones that would be the hardest hit if prices rise as a result of OPEC’s actions.
New Oil Cartel Threatening OPEC Read More »
Current volatility in the global oil market is, according to most analysts, due to fears that markets are facing a severe threat. A doomsday scenario is being painted in the media which suggests that oil prices will collapse as Moscow and Riyadh allow for OPEC compliance to slip, and that a glut of Saudi crude will be hitting the market. This assumes that Saudi Arabia is able to produce at least 12.5 million bpd, But no one has really assessed the Saudi spare capacity capabilities…
Can Saudi Arabia Prevent The Next Oil Shock? Read More »
Geopolitics has taken over the oil market, driving oil prices up to three-year highs. The inventory surplus has vanished, and more outages could push oil prices up even higher. Yet, there are some signs that demand is starting to take a hit as oil closes in on $80 per barrel.
In the International Energy Agency’s (IEA) May Oil Market Report, the agency said that OPEC might be needed to step in and fill the supply gap if a significant portion of Iran oil goes offline. Saudi Arabia suggested shortly after the U.S. announced its withdrawal from the Iran nuclear deal that OPEC would act to mitigate any supply shortfall should it occur.
IEA: High Oil Prices “Taking A Toll” On Demand Read More »
