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Stephen Schork: More Upside in Oil

I have never agreed with much anything that this "expert" Schork has espoused... But then I am a Texas oil producer who knows that Peak Oil is a geological reality... Schork has his head in the sand.

More Crude Oil Backing Up

Oil field activity is picking up here in West Texas. There is a feeling that demand is turning around and money is flowing back into drilling and development. I'm starting to spend some cash on my own leases now as economics are looking better.
The trend is gaining strength, against the feeble inventory data. There is simply not enough inventory storage available anymore, given the burn rate that is coming.... The oil price trend is up. I don't think I'll buck the trend for a while.

Is Regulating Oil Speculation a Good Idea?

Regulation of markets never works. Investors always find a way to circumvent the regulations by indirect means.
Floors and ceilings have been tried many times in the past with terrible results.
There is a fear of oil going back to $147/bbl and for some reason these pro-regulators believe this will forestall that or prevent it.
It is nonsense. Oil will be going much higher and so long as there are markets that trade it, there will be no stopping it. Floors or no.

Predicting Oil and Gas Prices: 2009-2016

davew,
I have long advocated the maximization of the railroads, however it was brought to my attention that the unionized truckers and unionized railroad folks don't see eye to eye, and at present the truckers outnumber the railroaders. So it is likely that the truckers will have their way and keep their inefficient method of transport for some time to come.

EV's are nonsense. You already have greenies screaming to the heavens about disposal of hearing aid batteries and the like.
Where are they going to put all those spent car batteries?
EV's simply do not make sense. That's why our government is all for them. Think about it.. you have multiple conversions of energy forms that have to be transmitted through inefficient power lines to a battery that then transmits the energy to a motor.
It is idiotic and not cost effective.
That's why it will probably be pursued to the taxpayer's detriment, as was/is ethanol.

Predicting Oil and Gas Prices: 2009-2016

Over 35% of the traffic on interstate highways are eighteen wheelers.
They don't quite get the mileage that cars get.
There is no electric motor that will move a big rig efficiently.
EV's are like ethanol... a bad joke to be played on the public.
But you can bet our new socialistic government will force EV's down our throats just as was ethanol.

Irrational Pricing in Crude Oil

Legitimate or manipulated???

Time to remove your blinders and see the markets are working just as should be expected. Hedge funds and large traders are part of the market. It is futile to cry about their strategies. Try to take advantage of them.

There are going to be huge swings in the price of crude oil as predicated by peak oil.

Traders have to look beyond the short time inventories that have built up to less than ONE DAY of daily oil consumption. There no longer exists enough storage capacity to rationally effect the longer term oil price. The world is simply burning so much that storage is a non-player. Those evil "hedge funds and large traders" are seeing through the fog.

Surprising Upturn for the Energy Sector

Many are thinking oil and natgas are due a pullback, and I sure can't say they are wrong.
However, if there is a pullback, I believe it will be shallow and short lived.
The massive flood of Obamamoney has started flowing into the system. Serious inflation projections are about to be tested.
Historically, there has never been such an injection of capital of this magnitude. In the same vein, we will have never experienced the inflationary pressure that comes with such.

In addition, I still believe that some people view "the market" in what I call short term tunnel vision. They are measuring the oil and gas market with short sighted "current market conditions".
The market actually is looking ahead, and the pending economic recovery is outweighing ALL of the standard measures of supply and demand.
This is due to the fact that demand will overwhelm the currently suppressed supply in very short order with any recovery.
Yes, supply can be added, but it always comes after prices have escalated.

To me, it would be too risky to be shorting any commodity, (especially oil and natgas) or most any energy stock.

Louis Stanasolovich: Short Oil, Long Gold

My guess is they will "take those shorts off" at a much higher price than $30......

Oil at $50/bbl: Where to from Here?

Dr. Laser,
I fundamentally agree with your post, however I would love to see your "studies" that "indicate we have Saudi type fields right here in the United States".

This is my 30th year as an independent producer in Texas, and I guess I've had my head in the sand, because I haven't heard of any such potential oil fields here that even come close to the depleting Saudi fields that have produced hundreds of billions of barrels of oil.

I also agree that governmental regulations are one cause of our stagnating industry. Drill Here, Drill Now!!

What Really Caused Oil to Boom?

Ahhhh Semantics.....
Whatever you call it... markets or speculation... it is one and the same thing. If it is going to be traded, then there is a market and there is speculation.
We have now seen peak oil. The extreme volatility of price is a function of the passing of peak oil.

Traders and investors hate change because they can't use their their tried and true methods of evaluation. So there is frustration when they can't make price behavior fit into their strategies.

Since crude is traded in a market place, the market determines what a barrel is worth. It is only logical that the market is seeing the continuing depletion of a finite resource. As a result the market is pricing in the inevitable shortages now. It is a part of supply and demand.... it is just now beginning to be projected ahead in time.
Real time supply and demand remains a predominant factor, but future supply and demand can not be ignored.

For those frustrated with the continued climb in prices when there appears to be excess supply (currently)... I would say the markets are speaking volumes about what is forthcoming.

Good luck to all...!!!!!

There's Plenty of Oil, For Now

FEB,
IMHO, the cheaters will continue to cheat due to the fact that they have done it in the past and benefited from it.

The non cheaters have no way to punish them for their cheating.
Saudi has (in the past) tried to punish cheaters by increasing production and driving the prices to levels down to such levels that the cheaters are squeezed. That tool is no longer an option as
the Saudi's realize they are selling their depleting resource and damaging reservoirs in doing so.

As you stated, the only tool the non cheaters have is trying to convince the cheaters it would be more beneficial to comply.
It is a hard point to sell when prices are relatively low and dropping.

Oil Is Years Away from a Meaningful Recovery

User 442,
Pick up a copy of "Twylight in the Desert" (Matthew Simmons).
Check out theoildrum.com
Lots of references in both.

When Will the Oil Price Pop?

The world is not going to stop functioning because of a recession. Too much is being made of "demand destruction". It is a temporary (and IMHO, a marginal) phenomena.

Producers have already cut more than enough production to ensure higher prices in the near future. We need to remember that just a year ago the world was using more oil than it could produce... and we weren't in a huge growth cycle.

The concern should be about the high possibility that high energy costs will snuff out any recovery. When oil prices rebound (and they will), we will be seeing much higher prices than last summer. Can the economy carry that cost through recovery?

Crude Reality: How Long Can Oil Stay Down?

John P.'s post raises another point. Ghawar is experiencing higher and higher water production rates with its oil. This is from massive injection that has been ongoing for years. As all oil producers know, the appearance of water is the beginning of the end for oil fields.

The reduction in production rates may cause a slight delay of the water encroachment.... or it may enhance water encroachment that will not be seen until production rates are increased again.

Supply destruction (depletion and reduced production rates) will be a more powerful market influence than demand destruction. People either ignore how tight supply and demand really is, or simply do not understand it.

I believe that we have already experienced the majority of "demand destruction" that will come from this economic slowdown. The reduction in supply will take a little more time to flow through the system and pull inventories down, however, It won't take as long as many seem to think.

Oil Price Economics the 60 Minutes Way

blame..... blame.... blame.....

I am so sick of the blame game we have all been playing for every event that occurs. The media just loves to start the ball rolling with idiotic programs like this 60 Minutes program.

Speculation is what makes a market. Some argue it was the dam*ed speculators that drove up the price.... Well, if that is true, then it was the same speculators that have driven the price down to the wonderful (for some) low price we are seeing at present.

The media has become so very powerful. It can manipulate the masses to follow whatever agenda it wants to follow.