[ROCKMAN]

"The last leg of the Keystone will be built in 2017. President Trump will sign the order." I seriously doubt it. Even if President Obama had approved the border crossing permit at the beginning of 2015 I doubt they would have started building it. Today there’s enough transport capacity for every bbl of oil sands production so why would the build more capacity? And given the dramatic decrease in oil prices I suspect there will be an ever increasing excess pipeline capacity. An excess capacity that will continue to grow as long as oil prices stay at the current levels. In fact more of the rail transport system is being idled every month. Folks need to remember that no pipeline of this magnitude would ever be built without a minimum number of producers GAURENTEEING they’ll ship a fixed volume down the line. This is called the “subscription base”. I’m not sure the northern leg of KXL has ever been fully subscribed: for years the company kept extending the subscription period because they had yet to get enough volume committed. No one is going to invest $BILLIONS on a pipeline without have a guaranteed revenue stream. Since such numbers are considered “trade secrets” they can’t be verified directly. But continuing to extend the subscription cutoff date is a good hint.

I still chuckle when I see folks talk about a “over supply of oil” at a time when the world is consuming more oil than ever before in the history of the universe. lol. Last time I looked up the definition of oversupply it was when there was more production available then buyers for that production. If prices go much lower we may be looking at a significant shortage of oil: there may be more folks that can afford $20/bbl oil then all the producers can supply. Granted that condition wouldn’t last too long because completion would raise prices and thus push some of those potential buyers out of the market place.

[Tanada]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;The last leg of the Keystone will be built in 2017. President Trump will sign the order." I seriously doubt it. Even if President Obama had approved the border crossing permit at the beginning of 2015 I doubt they would have started building it. Today there’s enough transport capacity for every bbl of oil sands production so why would the build more capacity? And given the dramatic decrease in oil prices I suspect there will be an ever increasing excess pipeline capacity. An excess capacity that will continue to grow as long as oil prices stay at the current levels. In fact more of the rail transport system is being idled every month. Folks need to remember that no pipeline of this magnitude would ever be built without a minimum number of producers GAURENTEEING they’ll ship a fixed volume down the line. This is called the “subscription base”. I’m not sure the northern leg of KXL has ever been fully subscribed: for years the company kept extending the subscription period because they had yet to get enough volume committed. No one is going to invest $BILLIONS on a pipeline without have a guaranteed revenue stream. Since such numbers are considered “trade secrets” they can’t be verified directly. But continuing to extend the subscription cutoff date is a good hint.

I still chuckle when I see folks talk about a “over supply of oil” at a time when the world is consuming more oil than ever before in the history of the universe. lol. Last time I looked up the definition of oversupply it was when there was more production available then buyers for that production. If prices go much lower we may be looking at a significant shortage of oil: there may be more folks that can afford $20/bbl oil then all the producers can supply. Granted that condition wouldn’t last too long because completion would raise prices and thus push some of those potential buyers out of the market place.

[C8]

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;The last leg of the Keystone will be built in 2017. President Trump will sign the order." I seriously doubt it. Even if President Obama had approved the border crossing permit at the beginning of 2015 I doubt they would have started building it. Today there’s enough transport capacity for every bbl of oil sands production so why would the build more capacity? And given the dramatic decrease in oil prices I suspect there will be an ever increasing excess pipeline capacity. An excess capacity that will continue to grow as long as oil prices stay at the current levels. In fact more of the rail transport system is being idled every month. Folks need to remember that no pipeline of this magnitude would ever be built without a minimum number of producers GAURENTEEING they’ll ship a fixed volume down the line. This is called the “subscription base”. I’m not sure the northern leg of KXL has ever been fully subscribed: for years the company kept extending the subscription period because they had yet to get enough volume committed. No one is going to invest $BILLIONS on a pipeline without have a guaranteed revenue stream. Since such numbers are considered “trade secrets” they can’t be verified directly. But continuing to extend the subscription cutoff date is a good hint.

I still chuckle when I see folks talk about a “over supply of oil” at a time when the world is consuming more oil than ever before in the history of the universe. lol. Last time I looked up the definition of oversupply it was when there was more production available then buyers for that production. If prices go much lower we may be looking at a significant shortage of oil: there may be more folks that can afford $20/bbl oil then all the producers can supply. Granted that condition wouldn’t last too long because completion would raise prices and thus push some of those potential buyers out of the market place.

[kublikhan]

$this->bbcode_second_pass_quote('ROCKMAN', 'I') still chuckle when I see folks talk about a “over supply of oil” at a time when the world is consuming more oil than ever before in the history of the universe. lol. Last time I looked up the definition of oversupply it was when there was more production available then buyers for that production.

[Pops]

I always laugh out loud when I read people say we can't be oversupplied because we are consuming more oil than ever.

Almost as loud as when I read people say we are oversupplied because demand is falling, even as we consume more than ever.

Don't tell me we don't each create the world we inhabit.


"My gut tells me..."

.

[onlooker]

I think what is most telling is that the consumers in the US have died the death of a thousand cuts. Meaning in many ways and via many policies our purchasing power, our economic base, our debt load, jobs being exported among other things has effectively severely weaken the American consumer. The last hit being the whole 2008 oil hike and consequent depression of the economy. The consumers have become dependents of the State for handouts. Is it then no wonder that these low oil prices have not stimulated demand when consumers are but shadows of what they once were. "The body will soon have no use for the oil." That may not be the case given that our infrastructure, suburbs etc. are reliant on oil. That is maybe the real reason all the chips have been submitted into the LTO because reasonably priced oil/blood is the only thing remaining that is keeping the US economy alive.

[kublikhan]

$this->bbcode_second_pass_quote('pstarr', 'O')ne might consider this glut to be purely economic (ie not geologic) the result of QE easy money and what is left of American wealth. Only the US oil industry and consumer can afford to mine tight-shale petroleum and extract what I lovingly refer to as Eau-d'Bakken. We have just the right combination of rural infrastructure, light population and a free-market oil industry with deep pockets. That now has holes. You can scratch your balls in wonderment now, rather than your heads lol

[GregT]

$this->bbcode_second_pass_quote('', '<')/div>$this->bbcode_second_pass_quote('GregT', '')$this->bbcode_second_pass_quote('Plantagenet', 'I') guess its OK for Kenya to export oil during an oil glut, but not for Canada for export oil doing an oil glut?

[ROCKMAN]

" Demand is at all time highs. But supply is even higher. And more importantly: there is a large gap between supply and demand" So what is the actual volume of that huge "supply" and where is it going if not to the buyers? And don't say storage: oil being BOUGHT by speculator that goes into storage is part of the demand side of the equation.

So again if a huge amount of oil is being produced that isn't being bought exactly where is this oil going?

[kublikhan]

Actually I am going to say storage. As someone who works on the production side of oil I am not that surprised that you see oil in storage as "demand". But to the rest of us oil stored in a tank does not count as "demand", regardless if it was already purchased from a producer. We see demand when it is actually consumed. In the past I would say run through a refinery would be good enough but nowadays we are even starting to see the refined stuff starting to pool up.

[Tanada]

$this->bbcode_second_pass_quote('kublikhan', 'A')ctually I am going to say storage. As someone who works on the production side of oil I am not that surprised that you see oil in storage as "demand". But to the rest of us oil stored in a tank does not count as "demand", regardless if it was already purchased from a producer. We see demand when it is actually consumed. In the past I would say run through a refinery would be good enough but nowadays we are even starting to see the refined stuff starting to pool up.

[ennui2]

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('kublikhan', 'A')ctually I am going to say storage. As someone who works on the production side of oil I am not that surprised that you see oil in storage as "demand". But to the rest of us oil stored in a tank does not count as "demand", regardless if it was already purchased from a producer. We see demand when it is actually consumed. In the past I would say run through a refinery would be good enough but nowadays we are even starting to see the refined stuff starting to pool up.

[Plantagenet]

Faith Birol of the EIA predicted late last year that the oil glut would last until 2020.

oil glut to last 4 more years?

IMHO, 4 more years of oil glut isn't likely. KSA and Iran and Venezuela and North Dakota and Texas and Alaska and Canada and Russia will all be almost bankrupt in four more years if the oil glut doesn't end until 2020--

[misterno]

$this->bbcode_second_pass_quote('sparky', '.')
It's pretty obvious that crude oil price is a boom and bust cycle ,
the reasons can only be guessed at ,
the fundamentals of the industry are not helping to understand why
exploration , development and transport cost are on the whole steadily rising
demand is not very variable , the customers can swallow a fair bit of price movement without crashing their demand


what make the market unstable is the great amount of speculation ,
the contracts for WTI are one of the biggest playground for traders there is .
often on a day the quantities of orders exceed real deliveries by a factor of 20/1
It's so easy ....bid , sell and you've made some money in a few hours from the comfort of your office
I suppose there is even some automated trading in the millisecond range

none of those trade care a fig about crude oil supply ,
it could be yogurts or wingnuts for the difference it would make ,but crude is way bigger and better

I propose that what make the price in market unstable , when the price is driven way past it's natural price
further one can make money when buying AND selling , both in a rising market and a falling one .

Of course there is the supply/demand driver
but fluctuations of more than triple ratio don't come from fluctuations of less than 10%
unless something is pushing the price change

as for the present "glut" for sure there is one ...... what 2% , that's a year worth of depletion !
The old cheap super-giants are the lonely dinosaures ,
they ruled the Earth for a long while but have no successors
smaller fields deplete fast and rely on a constant stream of new babies to replace the old ones

the oil industry financial model is simple ,
you look for a do-able prospect ,
spend a lot of money to get the stuff to customers
get the cash and use a small part to keep the operation going for as long as possible

you can buy a seat into any stage , but if you don't know much about what you are buying it usually end in tears

now the present production exploration is winding down ,
development plans have stopped for anything but the near completion
within two years the "glut" and storage will have vaporized ,
the price will remain down until traders cannot trade it down ,
then reality strike and the bidding will switch to up

cautiously at first then , as the gains are so easy , with wild exuberance .... welcome back to the future !

[Revi]

Homeless people don't use much oil...

[ennui2]

Like there were no poor people before peak-oil?



I get it. Rich people or white people = bad. Poor people = victims. Meanwhile Pstarr brags about living a bucolic existence behind the protection of a redwood curtain. Such a humanitarian.

[ennui2]

$this->bbcode_second_pass_quote('Plantagenet', '
')KSA and Iran and Venezuela and North Dakota and Texas and Alaska and Canada and Russia will all be almost bankrupt in four more years if the oil glut doesn't end until 2020--