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Featured U.S. Shale Is Immune To An Oil Price Crash In 2017

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by bwilson4web, May 20, 2017.

  1. bwilson4web

    bwilson4web BMW i3 and Model 3

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    Source: U.S. Shale Is Immune To An Oil Price Crash In 2017 | OilPrice.com

    Since OPEC announced the production cut deal at the end of November, industry analysts have been warning that rising production from producers outside the deal—U.S. shale in particular—is effectively capping the oil price gains from that agreement.

    Four months after the OPEC/NOPEC deal took effect, oil prices droppedto the levels preceding the agreement, amid concerns over still stubbornly high inventories and rising U.S. output.
    . . .
    Since December 2016, oil output in the Lower 48 states, minus the Gulf of Mexico, has been on a continuous expansion, with 430,000 bpd growth so far. The growth from the average level in the fourth quarter of 2016 to May 2017 is around 340,000 bpd, Rystad said.

    According to the EIA data, Lower 48 states’ field production of crude oil has been growing each week since early December, right after OPEC said it would curb supply to try to balance the market and lift the price of oil.
    . . .
    The U.S. operators have built up a new inventory of drilled uncompleted wells (DUCs) as the rig count recovery has been outpacing completion growth since the second half of 2016. If the price of oil was to crash to US$40 or even US$30 per barrel, a major part of those DUCs would still be commercially viable for completion, due to the fact that “drilling costs are sunk”, Rystad said.

    Interesting times we live in.
    Bob Wilson
     
  2. Former Member 68813

    Former Member 68813 Senior Member

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    i know, just a few years after the peak oil hysteria (that i believed in too).
     
  3. wjtracy

    wjtracy Senior Member

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    Yes the OPEC cartel is broken they cannot manipulate prices higher.
    Possible $1/gal gaso by Feb_2018, although I missed on that prediction this Feb_2017 because of the OPEC action.
     
  4. fuzzy1

    fuzzy1 Senior Member

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    Weren't the peak oil folks half right? The old easy stuff was running out.

    But they didn't foresee just how innovative the oil industry would be at rapidly figuring out how to economically harvest previously difficult and unusable deposits. And once the later became harvestable, the industry went out and found even more fields of the same types.
     
  5. bwilson4web

    bwilson4web BMW i3 and Model 3

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    But it also means the cat is out of the bag for EV performance. The Honda Civic was hobbled because the motor was built into the flywheel instead of clutched down stream. As part of the transmission, it looks like the 'blue motion' that became the Hyundai architecture ... not that I like a stepped transmission.

    What I see is clever use of power motors and variable intake valve tricks engines to make future cars more efficient with better performance from the motors. The motors don't have to be all that powerful to make a significant improvement in performance.

    On a slightly different challenge, my understanding is significant arms sales were signed recently with Saudi Arabia. How will they pay for these weapons with oil so cheap?

    Bob Wilson
     
    #5 bwilson4web, May 21, 2017
    Last edited: May 21, 2017
  6. fuzzy1

    fuzzy1 Senior Member

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    Maybe we'll just have to let them default. Ideally, before most of the equipment is delivered or even produced. It could be worthwhile if that same cheap oil takes down the Russian government budget too.
     
    #6 fuzzy1, May 21, 2017
    Last edited: May 21, 2017
  7. mikefocke

    mikefocke Prius v Three 2012, Avalon 2011

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    How may deals worth of arms sales of the amount just announced (conveniently) would the Saudi's have to buy before their reserves and investment funds were used up?