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Re: THE Price of Crude pt 14

Unread postPosted: Sun 25 Nov 2018, 11:50:29
by rockdoc123
And how many will try to use volume to offset the per unit drop in prices? At around $50 that's very possible. Breakeven prices have fallen across the shale patch. There were a slew of articles out last year. Somewhere on this site someone brought it up. The difference wasn't that much, but it made $50 look safe.


more likely that there will be a strong resurgence in hedging. When prices were rising producers who did not have a lot of debt avoided hedging but as the price dropped companies began to pick up hedges once again. If you are able to hedge all of 2019 production at say $65/bbl and the average price turns out to be $55 you will have done quite well.

Re: THE Price of Crude pt 14

Unread postPosted: Sun 25 Nov 2018, 13:15:14
by kublikhan
ROCKMAN wrote:k - Last time I saw the stats the US exported more coal in a single year under President Obama then any other POTUS in history. Not sure if President Trump beat that record yet. As far as the "greenest POTUS in history" that just teasing those did. It's not always about you, bro. LOL.

Have posted those same FACTS multiple times and not once got a response from anyone who proclaimed President Obama as the "greenest POTUS in history". LOL
Rockman, I responded to those FACTS everytime you bring them up. The decrease in US coal production was over five times the increase in our coal exports under Obama. You keep focusing on the increase of coal exports under Obama while ignoring the much bigger fall in our coal production/consumption. Forest for the trees bro.

Re: THE Price of Crude pt 14

Unread postPosted: Sun 25 Nov 2018, 13:50:12
by onlooker
 WTI is trading at $50.37, down $24 in 7 weeks , down by a third!

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 05:51:35
by ralfy

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 06:36:22
by Cog
onlooker wrote: WTI is trading at $50.37, down $24 in 7 weeks , down by a third!


Opec is meeting next week. I expect the usual rabbit to pulled out of the hat to halt the slide in oil prices.

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 06:54:44
by GoghGoner
I was thinking the same thing about the OPEC meeting. It could provide the turning point towards higher prices exactly like what happened last year.

As far as breakeven costs, associated gas is part of the picture and right now it is negative coming out of the Permian. Yes, they are paying people to take their NG. These drilling frenzies located in one region really boggle the mind!!!

Natural Gas Prices Fall Below Zero In Texas

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 10:15:15
by KaiserJeep
The cheap oil has eroded the price of gasoline further to $2.53/g this past week. In the SF Bay Area we are still considerably above that at $3.23/g on average. I do not doubt that something will be done to juice the petroleum profits at the expense of the rest of us.

But DAMN, I expected the Oil Peak to have some more dramatic symptoms than what I am seeing.

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 16:25:26
by ROCKMAN
k - "Forest for the trees bro.". Sorry, bro, you are. Those coal production has nothing to do with those comments. They focus on the liberals who still want to argue that President Obama was the great defender of the environment when compared to an R POTUS when there are able FACTS to show he wasn't.

None of the stats you can show about any of the fossil fuels changes President Obama's words and ACTIONS supporting increasing imports of Canadian oil sands production and increasing exports of western coal exports from govt leases. There's the damn trees, bro. LOL.

Re: THE Price of Crude pt 14

Unread postPosted: Fri 30 Nov 2018, 17:56:03
by Darian S
KaiserJeep wrote:The cheap oil has eroded the price of gasoline further to $2.53/g this past week. In the SF Bay Area we are still considerably above that at $3.23/g on average. I do not doubt that something will be done to juice the petroleum profits at the expense of the rest of us.

But DAMN, I expected the Oil Peak to have some more dramatic symptoms than what I am seeing.


The issues will begin if U.S. shale can't sustain not only current output but significant growth for decades to come, not years but decades, and if no other significant production comes online to not only replace falling production that will be in most fields soon if it isn't now, but substitute all declines and produce excess above it.

Debt is piling on high to attempt to postpone things, but many expect global economic hardship within the near future.

Re: THE Price of Crude pt 14

Unread postPosted: Sat 01 Dec 2018, 17:57:46
by kublikhan
Rockman, I'm guessing none of these are in dispute:
1. Coal is bad for the environment
2. Lower production & consumption of coal is better for the environment
3. Under Obama coal production & consumption fell sharply
4. Under Obama harmful emissions from power plants fell sharply

Seems like you are now saying the fall of US coal production/consumption and reduction in harmful emissions had nothing to do with Obama's actions? That seems highly unlikely IMHO. Mercury emissions alone fell 86% thanks to Obama's MATS regulation:

Industry aggressively fought the Mercury and Air Toxics Standards (MATS) when the Obama administration proposed it in 2011 and finalized it in February 2012, warning it would precipitate the closure of a swathe of coal capacity nationwide. Six years later, the rule appears to have had a sizable impact on the power sector.

The rule imposes first-of-their-kind emissions limits for mercury, arsenic, and heavy metals associated with fuel combustion on power plants larger than 25 MW, and the Environmental Protection Agency (EPA) says it affects about 600 power plants, which include 1,100 existing coal-fired units and 300 oil-fired units. The EPA received close to a million public comments on the MATS proposal alone—substantially more than any prior rule-making—and most comments from industry decried its potentially exorbitant costs associated with compliance and its potential threat to energy reliability.

An Environmental Success
When the EPA published its final MATS rule in February 2012, it released a companion regulatory impact analysis that projected annual incremental private costs of the final MATS to the power sector would be $9.6 billion in 2015 (in 2007 dollars). But it also estimated that the annual benefits of the rule, including the avoidance of up to 11,000 premature deaths annually, would be between $37 billion and $90 billion.

The environmental benefits of the rule are tangible, it said. In a January 2018 report summarizing analysis of its 2016 Toxics Release Inventory, the EPA noted that since 2006, net electricity generation from coal decreased 38%, while the rate of release of mercury to air per GWh of electricity from coal dropped 77%. Electric utilities overall reduced their mercury air emissions 85% (80,000 pounds) between 2006 and 2016. Total mercury emissions, including air releases and land disposal from the sector fell 48% (68,000 pounds) since 2006.
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How Did MATS Affect U.S. Coal Generation?

Then there were the rules regulating carbon dioxide emissions, the clean power plan, the new coal mining regulations, etc.

President Obama has been called one of the most anti-energy presidents in U.S. history. As if to put an exclamation point on this perception, last week the Obama Administration intervened to block an easement for the nearly completed $3.8 billion Dakota Access Pipeline (DAPL). This intervention was despite the fact that the U.S. Army Corp of Engineers had previously approved the easement across the Missouri River, and despite the fact that multiple pipelines already cross the river. The Obama Administration has also banned offshore drilling in the Arctic, and placed additional rules and regulations on the fossil fuel industries -- particularly on the coal industry. Thus, it’s clear that there is some substance to the narrative that President Obama is hostile to fossil fuel development. So let’s take a look at what has happened with respect to energy production while President Obama has been in office.

Recent history in the coal industry definitely supports the anti-fossil fuel narrative of President Obama. In 2008, President Bush’s last year in office, the U.S. produced 1.06 billion metric tons of coal -- an all-time high. By 2015 it had fallen to 813 million metric tons. Final data for 2016 won’t be available for several months, but during the first six months of this year the EIA reported that domestic coal production had fallen to an annualized rate of 667 million metric tons. That marks a decline of 37% in coal production during Obama’s presidency.

The bigger story, however, was the explosion of wind and solar power during the Obama Administration. Again, both started to grow during the Bush Administration, but the forced tilt away from coal provided a tremendous boost to wind and solar power. During the last year of the Bush Administration, wind and solar power respectively supplied 56 Terawatt-hours (TWh) and 1.6 TWh. By 2015 those consumption numbers for wind and solar power had grown to 193 TWh and 39 TWh. That translates to a 245% gain in wind power and a whopping 2300% gain in solar power production over the first seven years of the Obama Administration. And these numbers are likely to grow again in 2016.


I'm not saying Obama was the greenest president in history. Nor am I saying the demise of coal was 100% because of his actions, cheap gas was a large factor as well. But IMHO Obama's actions on coal have contributed to both coal's overall decline in production & use in the US and overall cleaner emissions for the coal that remains.

Re: THE Price of Crude pt 14

Unread postPosted: Sun 02 Dec 2018, 14:05:58
by onlooker
So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?

Re: THE Price of Crude pt 14

Unread postPosted: Sun 02 Dec 2018, 14:23:31
by asg70
onlooker wrote:So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?


The solution to low oil prices is low oil prices. The solution to high oil prices is high oil prices. In other words, the invisible hand of the market has a way of keeping things wobbling within a sweet-spot. It's only doomers who always think trendlines keep moving in only one direction.

Re: THE Price of Crude pt 14

Unread postPosted: Sun 02 Dec 2018, 18:31:45
by Cog
China and the US has reached a tentative agreement to forego additional tariffs for a 90 day period while the two sides negotiate. To me that is a growth indicator and oil prices respond to perceived growth with higher prices. Also OPEC is going to discuss production cuts this week. If they do that we are back up to $70/bbl oil right quick. At least that is my 2 cents on the matter.

Re: THE Price of Crude pt 14

Unread postPosted: Sun 02 Dec 2018, 20:09:12
by Darian S
asg70 wrote:
onlooker wrote:So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?


The solution to low oil prices is low oil prices. The solution to high oil prices is high oil prices. In other words, the invisible hand of the market has a way of keeping things wobbling within a sweet-spot. It's only doomers who always think trendlines keep moving in only one direction.


If the price is too high for consumers demand will fall and the economy will be affected, if the price is too low for producers it cannot be sustainable either. And as time goes by the minimum price needed by the producers goes up, while stagnant wages and inflation mean the maximum price affordable by the consumers goes down. Price can fluctuate for a bit, but the long term it eventually becomes untenable without alternatives popping up.

IEA expects peak in a few years followed by annual drops of 6mbpd, year after year iirc, to substitute that and produce excess above necessitates prices consumers can't afford.

Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 00:28:16
by onlooker
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Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 03:04:10
by vtsnowedin
Darian S wrote:If the price is too high for consumers demand will fall and the economy will be affected, if the price is too low for producers it cannot be sustainable either.

And as time goes by the minimum price needed by the producers goes up, while stagnant wages and inflation mean the maximum price affordable by the consumers goes down.

But wages and inflation are not stagnant.


Price can fluctuate for a bit, but the long term it eventually becomes untenable without alternatives popping up.

As they surely will.
IEA expects peak in a few years followed by annual drops of 6mbpd, year after year iirc, to substitute that and produce excess above necessitates prices consumers can't afford.
Yes the post peak world will be a harsh place with some winners and a lot of losers. If you can't afford oil you will find a way to do without it or die. It is as simple as that.
But for now still pre peak but near the top of the production curve I think Cog's $70/bl estimate is probably correct. The producers will grumble it is too low but keep producing and the customers will grumble it is too high but keep filling up their SUVs. If everyone is a little unhappy you have found the right price.

Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 04:43:14
by Cog
Crude oil price jumped 4% overnight pricipally on the US/China agreement.

Dow futures implied opening up 500 points.

Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 05:43:40
by Outcast_Searcher
Cog wrote:Crude oil price jumped 4% overnight pricipally on the US/China agreement.

Dow futures implied opening up 500 points.

To the extent that crude prices move on implied rates of economic growth, that makes lots of sense.

The terrible stock market "collapse" the doomers were recently calling for (yet again) isn't looking too realistic. Even without adding the implied 50ish S&P points from the pre-markets, whether you look at a year, six months, etc. the market is looking pretty flat, overall.

Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 06:47:05
by Cog
2017 was a very good market. I'll take flat compared to a huge dowturn.

Re: THE Price of Crude pt 14

Unread postPosted: Mon 03 Dec 2018, 08:27:40
by vtsnowedin
WTI up $2.00 this morning on the news of the US-China trade crease fire.
Dow futures up 430 and fluctuating prior to the open and curiously gold up $9.50 per ounce.
I would think gold would move opposite to the market but perhaps it is moving on other news such as the riots in France.