market ace

Crude Reality: How Long Can Oil Stay Down?

Sorry, but this seems like hog wash. I have studied these fields too (although I am certainly not an expert), but I use the follow the money appraoch. Not a single major oil company has shown any interest in these fields, except XTO which made a small investment. This oil is not currently recoverable in large quantities because it is trapped in "puddles" and not pools. Horizontal drilling helps to tap more puddles, but major oil recovery is just impossible no how matter how much oil is actually in the area.


On Jan 14 09:54 AM Michael66 wrote:

> Here is information regarding the Bakken oil formation in North Dakota
> and Montana. The following is quoted from a web site:
>
> "Dr. Leigh Price estimated that the Bakken formation was capable
> of generating between 271 and 503 Billion Barrels of oil with an
> average of 413 BBbls. Dr. Price also re-calculated the data previously
> presented by Schmoker and Hester (1983) and Webster (1984); the re-calculated
> values also fall within the range stated above. Price also states
> that 50% of this oil is recoverable (on average, 200 to 250 billion
> barrels of recoverable oil)"
>
> The Bakken oil field has about the same amount of recoverable oil
> as all the oil fields in Saudi Arabia put together. The number of
> oil wells in the Bakken oil field has more than doubled in the past
> several years.
>
> Saudi Arabia has producible reserves of 267 billion barrels (Wiki).
> Bakken has producible reserves of 200 to 250 billion barrels according
> to Dr. Leigh Price.
>
> There are approximately 800 wells in the Bakken field either in production
> or drilling at this time.
>
> Dr. Leigh Price's study of the Bakken field is the most thorough.
> He personally studied the field and then studied all the prior surveys
> of the field by both private and public entities. His conclusions
> are considered the most accurate and authoritative. His conclusions
> are also considered to be very conservative.
>
> dmr.nd.gov/ndgs/Bakken...
>
>
> grinzo.com/energy/inde.../
>
>
> www.wealthdaily.com/ar...
>

Marc Faber, Jim Rogers and Boone Pickens - Bullish on Oil

You are absolutely right that USO is not the ETF it was advertised to be and simply plays speculative options unlike GLD or SSLV that hold a commodity. When you get your first K-1 showing their huge losses you will get the picture. UCO seems like a much better deal.


On Jan 11 03:00 PM mkreisel wrote:

> I'm bullish on oil for the long term, but I'm utterly bearish on
> USO.
>
> It's a trap for retail investors who cannot venture into the futures
> trading and do not understand the monthly roll of future contracts.
>
>
> Right now, oil of March expiration stands at 46.07, while oil of
> February expiration stands only at 40.83. If the USO has to roll
> from the Feb to Mar oil today, it will have to pay a ghastly 14-15%
> premium. Now repeat that 12 time during a year, you can see how much
> left will be there for USO holders.
>
> At this point, I would rather invest in oil related stocks than this
> USO trap.
>