{"id":15802,"date":"2015-12-30T09:06:39","date_gmt":"2015-12-30T14:06:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15802"},"modified":"2015-12-30T09:06:39","modified_gmt":"2015-12-30T14:06:39","slug":"doom-and-gloom-for-north-american-oil-producers","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15802","title":{"rendered":"Doom and Gloom for North American Oil Producers"},"content":{"rendered":"
\n

Doom and Gloom for North American Oil Producers\u00a0<\/a><\/h3>\n<\/div>\n
\n
Lower Oil Prices<\/strong><\/div>\n

To the dismay of U.S. shale producers, oil prices continue their long slow slide into the abyss.\u00a0 Perhaps the current price of $35 per barrel \u2013 an 11 year low \u2013 is the final destination.\u00a0 More than likely, however, it\u2019s a brief reprieve before the next descent.<\/p>\n

\"excessPhoto credit: Mohammed Ameen \/ Reuters<\/p>\n

Oil exporters, including Saudi Arabia and\u00a0Russia<\/a>, have maintained high production rates.\u00a0 Their goal is to bankrupt U.S. shale companies and preserve market share.\u00a0 At the same time, oil demand is tapering as the global economy cools.<\/p>\n

\"1-World3\"Global crude oil and condensate (c+c) production as of June 2015. In record high territory.<\/p>\n

The combination of high production and declining demand has resulted in excess supply, and lower prices.\u00a0 The trend of lower prices won\u2019t change until either demand increases or production decreases.\u00a0 At the moment, it doesn\u2019t appear that either of these factors will change any time soon.<\/p>\n

So how low can oil prices go?\u00a0 If you recall, in the late-1990s, oil prices dropped below $20 per barrel.\u00a0\u00a0Goldman Sachs<\/a>\u00a0thinks we\u2019ll see $20 per barrel oil again.<\/p>\n

Obviously, oil prices can\u2019t go to zero.\u00a0 However, this offers little consolation for the many oil companies that borrowed gobs of money from Wall Street to leverage development of fracked wells that require $60 per barrel oil to pencil out.<\/p>\n

\"2-Russia3\"Contrary to widespread expectations, Russian production has proved more than resilient in the face of low prices. The decline in the ruble and high export taxes on oil (which are based on threshold prices) have left Russian producers in a competitive situation.<\/p>\n

Declining Hedges<\/strong><\/p>\n

So while it isn\u2019t possible for oil prices to go to zero.\u00a0 It is possible for the stock prices of oil companies to go to zero.\u00a0 In fact, over the next 12 months there could be a rash of bankruptcy\u2019s that results in delisted, worthless shares.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Doom and Gloom for North American Oil Producers\u00a0 Lower Oil Prices To the dismay of U.S. shale producers, oil prices continue their long slow slide into the abyss.\u00a0 Perhaps the current price of $35 per barrel \u2013 an 11 year low \u2013 is the final destination.\u00a0 More than likely, however, it\u2019s a brief reprieve before […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[5728,1361,195,1729,589,594,595,596,860],"class_list":["post-15802","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-acting-man","tag-bankruptcy","tag-debt","tag-oil-and-gas-industry","tag-oil-demand","tag-oil-prices","tag-oil-production","tag-oil-supply","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15802"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15802\/revisions"}],"predecessor-version":[{"id":15803,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15802\/revisions\/15803"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}