toobad41

U.S. Oil Production Is Now Up

I pretty much agree with all of the salient points you made. The fact remains that U.S. production is still in a declining mode. Sure there is a slight up-tick in daily production but the big increase in production will be in natural gas not oil. Also you point out that the U.S. production is about where it was in 2005. To me that is not too encouraging because that is where we were in the 1950's as well. At that time we were heading upwards in daily production. That is not the case today. Petroleum Geologists are trained to be optimistic about the oil business and they get pretty upset if you are even slightly pessimistic. I am more than slightly pessimistic about the outlook for the domestic oil industry. As Robert Anderson (Arco) once said "The oil business is a sunset industry and the sun is low in the sky". I really can't argue against that can you?

Bullish Signs from Oil

It is rare to find a company that produces just "natural gas". The same is true with an "oil company" producing only oil. Generally gas reservoirs also produce liquids (oil or condensate) and oil reservoirs also produce some gas. Sometimes a lot of gas. To put it simply, gas and oil can exist in the same reservoir. A company will make money from both.