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Do Canadians Want To Stay In The Oil Business?
Do Canadians Want To Stay In The Oil Business? The Canadian oilpatch is facing unprecedented challenges from uncontrollable forces outside our borders where oil prices and the vast majority of supply and demand are determined. There are a variety of variables. A light tight oil boom in the U.S. adding production in volumes not so […]
Only Recession Can Prevent An Oil Price Spike
Only Recession Can Prevent An Oil Price Spike The biggest result from the collapse in oil prices could be a future price spike. Oil prices at $30 per barrel have put most producers under water. That has led to austere budgets and severe cuts to spending. Wood Mackenzie recently estimated that $380 billion in major […]
OPEC’s Trillion Dollar Mistake
OPEC’s Trillion Dollar Mistake A few days after Christmas I appeared on CNBC Asia’s Squawk Box to discuss the volatility in the oil market. Bernie Lo asked a question about OPEC’s strategy, and I characterized their decision to defend market share as “a big, costly mistake” that had already cost the group over $500 billion in 2015 […]
Oil Crash Only The Tip Of The Iceberg
Oil Crash Only The Tip Of The Iceberg We may be enjoying amazingly low prices at the gas pump, but as oil prices continueing to slide we must also remember the catastrophic events that have followed almost every drastic oil price slump in the past. At this point, it’s not likely a question of ‘if’, […]
Risk Premium Returns To Oil Markets As Geopolitical Tensions Rise
Risk Premium Returns To Oil Markets As Geopolitical Tensions Rise Geopolitical risk premiums are likely to return to oil markets as the possibility of an attack on a large petroleum facility grows significantly amid rising tensions in the Middle East, possibly putting a floor on prices. “The risk of an attack is greater than 50pc, which […]
Oil Markets Are Balancing Faster Than IEA Would Have Us Believe
Oil Markets Are Balancing Faster Than IEA Would Have Us Believe Fundamentals point toward market balance but pessimism is dragging oil prices down. IEA has apparently succumbed to this negativity but their data suggests that things are getting better, not worse. In a business-as-usual world in which nothing unusual happens, the world will be close […]
OPEC, except for Iran, Has Peaked
OPEC, except for Iran, Has Peaked The OPEC Monthly Oil Market Report is out. OPEC took a hit in December, down 205,000 barrels per day. After examining the past and present production numbers, I believe that OPEC, except Iran, has peaked. That is, the combined production from all the other OPEC nations, has peaked. And any additional production […]
Low Oil Prices Take Their Toll On Recycling Sector
Low Oil Prices Take Their Toll On Recycling Sector “Plastics,” Mr. McGuire tells Ben Braddock in the 1967 film “The Graduate.” He was impressing on the young man the importance of one of the chief branches of the oil industry: Virtually every item available at the time contained plastic, or was packaged in it. So […]
Oil Bust Could End Dollar Domination
Oil Bust Could End Dollar Domination The US dollar survived the collapse of Bretton Woods in the ‘70s because its use in crude oil transactions made it the king of reserve currencies, but can it survive a collapse of petro dollars? Can the world survive the catastrophic geopolitical consquences that would follow? There is an […]
Saudi Aramco IPO More About Geopolitics Than Finance
Saudi Aramco IPO More About Geopolitics Than Finance In the first week of 2016, Saudi deputy crown prince Mohammed bin Salman, in an interview with the Economist, revealed that the Saudi government is considering selling shares in government-owned Saudi Aramco and/or its downstream assets through an IPO. He indicated that a decision on the IPO […]
War Between Saudi Arabia And Iran Could Send Oil Prices To $250
War Between Saudi Arabia And Iran Could Send Oil Prices To $250 The rift between Saudi Arabia and Iran has quickly ballooned into the worst conflict in decades between the two countries. The back-and-forth escalation quickly turned the simmering tension into an overt struggle for power in the Middle East. First, the execution of a […]
As Rig Count Plunges, Has U.S. Oil Reached Its Capitulation Point?
As Rig Count Plunges, Has U.S. Oil Reached Its Capitulation Point? The big drop in rig count for the week that ended last Friday points to capitulation by U.S. shale drillers. The total land rig count fell by 37 rigs and the horizontal rig count fell by 30 rigs (Figure 1). Figure 1. U.S. shale play […]
Petro States Dipping Into Coffers As Oil Price Reality Kicks In
Petro States Dipping Into Coffers As Oil Price Reality Kicks In Fifty-two years after Johnny Cash’s “Ring of Fire” became the first country album to top the US pop album chart, and the crude complex is stuck in a vicious circle once more. We have nada-nothing-nil on the economic data front today, as is the […]
Rig Count: Capitulation?
Rig Count: Capitulation? After last week’s moderate drop in rig count, the amount of horizontal oil rigs seems to implode this week. The U.S. land rig count was down 37 this week and the land horizontal rig count was down 30. Is this capitulation? Hard to say but it’s the biggest drop since March 2015. […]
Why The U.S. Can’t Be Called A ‘Swing Producer’
Why The U.S. Can’t Be Called A ‘Swing Producer’ Daniel Yergin and other experts say that U.S. tight oil is the swing oil producer of the world. They are wrong. It is preposterous to say that the world’s largest oil importer is also its swing producer. There are two types of oil producers in the world: those who […]
