Mmarrkk

The Slippery Truth About Oil Price

Thanks Henry's father. You've got a great list started. Missing one where the "liberal progressive" plans to tax the crap out of refineries, thus driving up the cost of refined products for all Americans, driving our economy deep into a depression.

What's missing? Anything that remotely looks like a plan for the near and mid terms. Seeking Truth, you have anything constructive to add? Two verses of kumba yah does not count!

Obama Goes Full Court on Energy Legislation

One eye: you obviously don't even have one good eye! Can you show proof, not some clap trap, that any water table polution has occurred as a result of shale gas drilling? there was a leak in a waterpipeline that caused a few fish to die, but that was a leak on the surface and wasn't related to shale gas drilling. And it appears that this was a case of vandalism according to later reports.

Shale gas resides several thousand feet below the water table. Sorry, your premise just isn't believable. Of course, we could stop drilling for shale gas, watch the cost of natural gas go back to $13/mmBtu and watch the cost of electricity, plastics, fertalizer, etc. shoot up as nat gas is a basic material and/or fuel for a huge number of our industries. But the greenie weenies don't really care about industry, companies and workers. And I'd put Obama and Chu in that bucket.

My only hope is that Obama's domestic agenda fails, fails quickly, fails completely, fails repeatedly.Nothing he is proposing will do any good for this country. Fail, baby, fail! Viva 'la GRIDLOCK!!!! No action is better than Obama's action!


On Jun 18 03:15 PM one eye wrote:

> There is going to be a big Cat fight over Shale gas and the method
> of extraction.
>
> Good luck in continuing to pollute the Water Table as Shale Gas meets
> Environmental opposition.

Low Natural Gas Prices Hurting E&P and Service Companies

MadHedge: you may want to buy a new map of the U.S...the Haynesville Shale is in Louisiana and East Texas, not Alabama. Get the simple stuff right before trying to move on to the complex.

And last time I checked this morning, NG isn't $4.30...its way south of $4 and nearer to $3.50 and has been for a few days. You may want to update your "cut and paste" every now and then.

A Look at Gas Prices by State

Anybody have a chance to correlate which candidate these high gasoline priced states voted for in the last presidential election?? Seems like the really red ones (high prices) voted for Bobomma! And some of the lowest priced states voted GOP.

Oh well, it would be interesting to see a similar map showing just the taxes per county. Fed + state + local. That's a driving force behind pump prices. Enjoyed the low gasoline prices over the last few months? hope so cuz they are gone! I paid $2.35 yesterday down here in Texas. But that's right, we're backward, low tech! You guys in California have a lot better set of services, employment, etc. than we do so that's why you pay over $3, right? How's that working out for you??

How High Will the Price of Oil Go?

The tax complexities of MLP's are highly oversold!! Its not that dang difficult. I own several MLP's and it isn't that big of a deal.

You may want to pull up your research on Linn Energy. They have a sound story and have locked in oil/gas prices through 2011 so their distribution is pretty stable through that period of time. Solid management team and solid assets with locked in prices make it a winner. Risk is probably dollar related.

BP is a great story.

Understand your thesis on why oil can't sustain really really high prices due to substitutes cutting the market and/or demand destruction. Fitz makes a great point regarding some of these substitutes like oil shales...they are nasty on the environment, take a lot of water and will require coorperation from government...all of which mean they won't happen for a while. I'd rather see us tap into natural gas as a fuel substitute either through direct usage (nat gas vehicles) or as a liquid (GTL) but GTL doesn't make sense until oil prices get really high AND nat gas feedstocks stay low. If oil prices are too low OR nat gas prices too high, GTL is a tough economic bet. Too many BTU's used to make not enough BTU's!!

You may want to follow Fitzsimmon's links to his website with his energy policy. He's got some great ideas. He and I differ dramatically on the political spectrum but he's on track with his ideas around energy. He's even coming around to my side of things a little bit regarding the Chosen One. He probably doesn't distrust Obamma as much as me, but he's seeing a lack of progress from him. We need a new energy policy, not a tax the oil/gas company policy. Fitz's is a good place to start.

It's the Oil Price, Stupid!

All of this magnifies a big issue going forward:

35 projects have been delayed because prices are not high enough to justify the investment. So, that would imply that $50 oil isn't sufficient to justify projects to add new production. This implies that the incremental replacement costs for production are north of $50. This means that prices will have to seek some level above $50 in order for supply to balance with demand, since current supply is declining.

Those who talk about oil being at $35 for any significant length of time (more than 3-6 months) are delusional.

Three Items That Will Signal a Crude Recovery

Perry: you fail to include depletion. If the world is producing 80 mmb/d and a conservative estimate of 5% depletion is occuring, that means by the end of the year we will have lost 4 mmb/d. So we'll have to replace that 4 but with prices so low, there will be fewer and fewer projects brought on line. Expecting any ramp ups in Canadian oil sands?? Yes, there are some ongoing projects which will be completed and will come on. But look at the massive budget cuts being announced by all of the oil companies. New projects are being slashed. So it may take a year or so, but I think you'll see supply getting back into balance in 2010, if not earlier. And that assumes the world's economy stays in the crapper. If it inches up, expect that balance to occur a little earlier...late 2009.


On Jan 15 07:28 AM Perry1961 wrote:

> The US imported 2.1M bpd less in November than it did in October.
> At the same time,inventories of refined products,as well as crude
> in storage,were building. It appears that demand just dropped off
> a cliff in Q4. If other OECD countries suffered similar drops in
> demand,OPEC cuts were too little,too late. Today's prices gave Americans
> sticker shock just 5 years ago. And that was when the economy was
> firing on all cylinders. Never mind that the marginal cost of production
> is higher than current prices. Once a well is operating,it's hard
> to give up the cash flow. Producers need to cut another 5M barrels
> a day to maintain current prices. I don't see that happening overnight.

Crude Reality: How Long Can Oil Stay Down?

Dr. C: look offshore! Vast number of tankers full of oil are sitting on the high seas. Folks are buying at these low prices and waiting to dump the oil on to the market when it recovers just a little bit. Arbritrage!


On Jan 14 10:29 PM Dr. C. wrote:

> "Massive stockpiles are building up"?
>
> here's an interesting set of numbers
>
> at the end of December 2006, the US had a 20.7 day supply of oil
> on hand
> at the end of December 2007, the US had a 19.0 day supply of oil
> on hand
> at the end of December 2008, the US had a 21.9 day supply of oil
> on hand
>
> these "massive stockpiles" represent just a few days use - they don't
> seem so big to me now
>
> source: tonto.eia.doe.gov/dnav...
>
>
>
>

Crude Reality: How Long Can Oil Stay Down?

KeltorTruth: Finally, someone with knowledge of the oilfield and economics chimes in! You are spot on! This "Bakken will save the world" hype is so full of holes. And others have stated the high declines in what used to be our major fields around the world in Mexico and Saudi. And don't look now, but Looney Chavez is out asking for Big Oil's help in Venezuela as production there is dropping like a rock! Yeah, he kicked big oil out so his boys could run the fields and they are heading to hell in a handbasket!! Very predictable and hopefully our new savior all-knowing Obama will take heed...government run anything is never as good as private industry...except for armies!

Oil Won't Stay Down for Long

Can you give me a symbol for the CHK preferred's?

Why Oil and Gold Are Headed Much Higher

While we can agree that demand destruction is occurring, do you know that supply destruction is also occurring? Look at the press releases concerning cutbacks in drilling budgets. This will start to crimp down on the amount of new production. Then there's our old OPEC buddies. They will be shutting down production. So as these things go through, you'll probably see supply drop as fast as demand, keeping the market balance pretty tight. At $50/bo, drilling in Canadian oil sands and deepwater GOM comes to a stop. While we may see a short term price drop, in a year or so, our production will be very very low and at low prices, our consumption will start to grow again. Hence, you'll see $4 gasoline pretty soon. Maybe during 2009!

Are Oily Characters Behind Crude's Price Move?

I'd like for the author to pursue Aceditor's point regarding US demand versus global demand. In the end, it doesn't matter what US demand is doing, it matters what overall worldwide demand is doing. A counterpoint is that US demand is a large portion of the worldwide demand, but our drop in demand was not that big. But if the US heads into a recession (or deeper into the current recession) it will probably impact other nations as well, dropping their economies and potentially causing their demand to drop as well, only delayed from US drop. Have I firmly sat on the fence on this issue??

The US dollar strengthening is a big driver of the the drop in oil, just as it was a big driver in the rise of oil. The dollar has strengthened but there are many who believe that this is window dressing and the real foundational problems in our banking system, our money printing, the FED's inability to lower rates to stave off the recession and the outright lieing done by our government regarding inflation all point to a financial disaster. Will the dollar maintain the strengthening it has recently enjoyed should Lehman and/or another major bank go under?

Gas Lines Coming This Fall

Fever: I hope and pray we don't get a hurricaine aimed at the Gulf Coast as well, because I live there and so does my family. HOWEVER, the odds are against us. We have had 2 very mild hurricaine seasons since Katrina/Rita. Probability says there will be at least a few that will "spook" the market.

We Can Lower Gas Prices Now If We Drill, Drill, Drill

First: most folks working on drilling rigs or in the oil and gas industry aren't unionized...thank the Lord!! If they were unionized we'd be paying $10/gallon. Just ask the carmakers and the airlines. Bloated benefits, inefficiency rewarded with guaranteed pay increases, etc etc. Just what the oil industry does not need.

Yeah, there are some unions in the drilling side but not many.

Kashagan Illustrates Hurdles of New Oil Production

Tupi production in 2009?? This quote in Rigzone from PetroBras "Last week, Petrobras said it's targeting a daily production of 100,000 BOE at Tupi, in a so-called pilot platform, by 2010-2011". That's their target...wanna bet it doesn't happen?

While I think the world of Transocean as a DRILLING CONTRACTOR and own a bunch of their stock, they are not the "most knowledgeable company in the business" when it comes to field exploration, development and production. They are a DRILLING CONTRACTOR. They don't even know WHERE to drill the wells!! They drill WHERE they are told, WHEN they are told and HOW they are told by Petrobras, Exxon, BP, Chevron, etc. etc. Again, one of the greatest drillers, but not a clue on oilfield development. And if you don't understand that, then we don't have much to talk about!