How much longer can this oil glut last?

by **ROCKMAN** » Tue 31 Oct 2017, 13:52:01

Sub - So true about irregular distribution. Of the 12 highest initial production rates in the EFS 11 were in just 2 counties:

https://www.ugcenter.com/updated-top-12 ... ord-579416

And in general during the peak in activity in 2012: "The Eagle Ford Shale reaches across 25 Texas counties. But more than 60 percent — 141 of the play's 227 drilling rigs — are operating in five counties: La Salle, Karnes, McMullen, Gonzales and DeWitt."

And of those 25 counties just 6 have produced 80% of the total EFS oil and only 3 account to 50%. Needless to say there's a lot of undrilled acreage left in the 8 counties that have each produced less the 5 million bbls. And not many drill sites left it Karnes Co that has recovered more then any other "sweet spot"...330 million bbls.

The EFS trend is no different then any other trend developed in the world: the well distribution is far from even. The sweet spots get developed during both high and low price periods. The poorer areas only during high price periods...often to the disappointment of the investors.

by **AdamB** » Tue 31 Oct 2017, 22:08:39

$this->bbcode_second_pass_quote('Tanada', 'P')retty much what I have been posting here for a couple months. the Glut, she is abating, and far faster than most predicted would be the case.

by **Smurfs1976** » Wed 01 Nov 2017, 03:50:25

Whilst there is some debate about the specifics the bottom line seems pretty clear to me.

1. Demand is rising and has increased at a faster pace than production

2. There is now a deficit and stocks are being drawn down

3. There is no imminent flood of oil about to hit the market from any source other than OPEC + Russia, and then only if they decide to increase production quotas which won't likely happen in the absence of higher prices.

Higher prices thus appear very likely to me.

by **tita** » Wed 01 Nov 2017, 06:03:45

$this->bbcode_second_pass_quote('AdamB', 'D')efine cheap. The US has demonstrated that they can grow 1-2 million barrels a day at $100 oil faster than at any time in the history of the country, and turn on more new volume than Ghawar produces in half a decade. At $50/bbl, growth is far lower, allowing demand to overtake new supply. But maybe the price isn't low enough to stop the US from peaking. Again.

by **Tanada** » Wed 01 Nov 2017, 10:32:10

$this->bbcode_second_pass_quote('tita', 'T')hey could probably increase production by whatever they wanted... and in fact they did increase by 2.5 MMbbls/d between 1985 and 1986, and 10 MMbbls/d between 1985 and 1995 although market price was half it is today (inflation adjusted). LTO is just depleting at 30$. At some point, demand has to follow. What I meant was cheap to produce, not cheap on the markets...

We are past this 30$ situation.

by **AdamB** » Wed 01 Nov 2017, 16:09:18

$this->bbcode_second_pass_quote('Subjectivist', '
')Isn't your argument predicated on the idea that drilling sites for fracked oil are extremely abundant and allow an arbitrarily unlimited resource at $100/bbl?

by **AdamB** » Tue 07 Nov 2017, 14:41:22

$this->bbcode_second_pass_quote('', '
')
Shutterstock The U.S. over-supply of oil is ending. Comparative inventory (C.I.) has been dramatically reduced in 2017. Levels have fallen 159 mmb since February and are now approaching the 5-year average for the first time in nearly 3 years (Figure 1). Figure 1. The U.S. Over-Supply of Oil is Ending. Source: EIA and Labyrinth Consulting Services, Inc. An interpreted yield curve that correlates C.I. and WTI price is developed by cross plotting the same data without the time dimension (Figure 2). The yield curve may provide price solutions to inventory reduction assumptions in the near term. Figure 2. Crude + Product Comparative Inventory Have Fallen 159 mmb in 2017. C.I. Could Reach the 5-Yr Avg By & $70 WTI Prices by Early 2018. Source: EIA and Labyrinth Consulting Services, Inc. Accordingly, if C.I. continues to fall at the 9-month average of 4 mmb/week, oil prices may .

by **AdamB** » Tue 07 Nov 2017, 15:42:24

Of note, in my opinion, is that this is the same author or proclaimed in a news conference staged on the steps of the Forrestal building in October of 2011 that the US was entering an immediate energy crisis we need to prepare for!!

6 years later....maybe the oversupply that made him look the fool is ending? Maybe?

:lol: