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Predicted Oil Collapse Underway...

Discussions about the economic and financial ramifications of PEAK OIL

Re: Predicted Oil Collapse Underway...

Unread postby GHung » Fri 20 Mar 2020, 15:44:13

Outcast_Searcher wrote: ......
Or, WTI jumped up today by nearly 25 percent to over $25 a barrel (closing price).

More than the big fall yestiddy. Funny how much difference a day can bring in volatile markets. :roll:

But if you're reporting all doom, all the time, only report on down days. :idea:


Yes, and some of you do the same on up days, eh? Funny how that works. (WHOOPS! Down again today)
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Re: Predicted Oil Collapse Underway...

Unread postby kublikhan » Fri 20 Mar 2020, 16:14:05

In the face of record low oil prices, the Railroad Commission of Texas, the state agency that regulates the oil and gas industry, is considering invoking a power not used in almost five decades to boost prices.

Under state law, the Railroad Commission has the authority to order how much oil a lease can produce. The agency hasn’t used that power since 1973, but with Russia and Saudi Arabia flooding global markets as the coronavirus pandemic strangles demand, some producers have asked commissioners to use that authority to help ease the glut.

Railroad Commissioner Ryan Sitton said he favors a free-market approach, but given the extraordinary circumstances, he is open to discussing the move with fellow commissioners and the public. “Right now, we don’t have a set way to do this because it hasn’t been done in 50 years.” State law gives the agency wide latitude to impose production cuts on leases, specific types of wells and even entire fields. “I’ve heard from operators on both sides for and against it,” Sitton said. “But I want an open dialogue. I want to hear from various groups on this issue — operators, economists, statisticians.”

The Railroad Commission canceled its March 31 meeting in response to the coronavirus outbreak, so the soonest the commission could meet in public to discuss the issue would be at its April 21 meeting. Even if the agency were to force production cuts, Sitton said, only similar cuts by Saudi Arabia and Russia would move the price of oil significantly higher.
Texas Railroad Commission eyes production cuts
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Re: Predicted Oil Collapse Underway...

Unread postby Outcast_Searcher » Sun 22 Mar 2020, 13:22:52

kublikhan wrote:
In the face of record low oil prices, the Railroad Commission of Texas, the state agency that regulates the oil and gas industry, is considering invoking a power not used in almost five decades to boost prices.

Under state law, the Railroad Commission has the authority to order how much oil a lease can produce. The agency hasn’t used that power since 1973, but with Russia and Saudi Arabia flooding global markets as the coronavirus pandemic strangles demand, some producers have asked commissioners to use that authority to help ease the glut.

At the risk of stating the obvious, if KSA and Russia and other OPEC producers want to just produce like mad, screwing Texas producers is only going to be a drop in the bucket, relatively speaking.

This would only work if they wanted to ban oil imports, and given how we need plenty of heavy crude as has been pointed out on this site, that isn't practical either.

Or am I missing something really obvious?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predicted Oil Collapse Underway...

Unread postby Outcast_Searcher » Sun 22 Mar 2020, 13:30:02

evilgenius wrote:It's probably not the same "hubris" that assumes that just about any person without three months savings can hold up without some sort of help, or with half the help some richer person is slated for. If there is not a US stimulus package that addresses the reality of American life over the insisted upon perception of it, then we are not going to see higher oil prices any time too soon in the wake of the pandemic.

Given that a LARGE proportion of Americans don't have three months of savings (including quite a few well educated professionals in their 60's, even, that damn well should), oil prices are well down the list of the priorities the stimulus is critical for. Things like eating and paying fairly prosaic bills like utilities are far more important in the short term. For people out of work and hunkered down, it's not like one tanks of gas won't last a LONG time for almost anyone not in a remote rural area.

Hell, even my normal under 300 miles a month on my car is going to go WAY down now.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predicted Oil Collapse Underway...

Unread postby kublikhan » Sun 22 Mar 2020, 19:52:36

Outcast_Searcher wrote:At the risk of stating the obvious, if KSA and Russia and other OPEC producers want to just produce like mad, screwing Texas producers is only going to be a drop in the bucket, relatively speaking.
The explosive growth of oil production in Texas was one of the very things Russia was worried about: Shale stealing market share as OPEC+ cuts. If instead Trump and the TRC were part of a cut agreement, that would solve one of Russia's primary concerns. Of course Russia is still pissed at Saudi Arabia for the price war which they see as blackmail. And any additional cut will probably be far under the demand destruction caused by the coronavirus. But it would be a step in the right direction.

Whether or not Saudi Arabia and Russia did the right thing by initiating a production free-for-all, any solution has now gone far beyond both OPEC and its wider OPEC+ coalition. On Thursday, Trump said he could intervene in an oil-price war between Russia and Saudi Arabia that has left U.S. oil drillers reeling. The time to do so is now. Not by slapping trade barriers on their oil, but by using his deal-making skills to bring them together to agree a united response that includes America and the rest of the world.

While striking such a deal won’t be easy, there are signs of willingness to help make it happen. The Texas Railroad Commission has signaled its readiness to be part of a solution. I’m sure other U.S. states and Canada will follow.
To Stop the Oil Price War, Trump Must Step in to Strike a Deal

Personally I am not very optimistic about such a deal happening.
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Re: Predicted Oil Collapse Underway...

Unread postby Outcast_Searcher » Wed 25 Mar 2020, 12:32:00

kublikhan wrote:
Outcast_Searcher wrote:At the risk of stating the obvious, if KSA and Russia and other OPEC producers want to just produce like mad, screwing Texas producers is only going to be a drop in the bucket, relatively speaking.
The explosive growth of oil production in Texas was one of the very things Russia was worried about: Shale stealing market share as OPEC+ cuts. If instead Trump and the TRC were part of a cut agreement, that would solve one of Russia's primary concerns. Of course Russia is still pissed at Saudi Arabia for the price war which they see as blackmail. And any additional cut will probably be far under the demand destruction caused by the coronavirus. But it would be a step in the right direction.

Whether or not Saudi Arabia and Russia did the right thing by initiating a production free-for-all, any solution has now gone far beyond both OPEC and its wider OPEC+ coalition. On Thursday, Trump said he could intervene in an oil-price war between Russia and Saudi Arabia that has left U.S. oil drillers reeling. The time to do so is now. Not by slapping trade barriers on their oil, but by using his deal-making skills to bring them together to agree a united response that includes America and the rest of the world.

While striking such a deal won’t be easy, there are signs of willingness to help make it happen. The Texas Railroad Commission has signaled its readiness to be part of a solution. I’m sure other U.S. states and Canada will follow.
To Stop the Oil Price War, Trump Must Step in to Strike a Deal

Personally I am not very optimistic about such a deal happening.

Ah, I see. Thanks for the explanation. Tooooooooo many things to try to understand which are changing rather quickly these days!
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predicted Oil Collapse Underway...

Unread postby wildbourgman » Wed 25 Mar 2020, 17:20:30

It doesn't matter whether or not the Texas Rail Road Commission steps up to the plate or not. The Saudi's and Russian's will get their answer when they see the North American Baker Hughes rig count Friday.
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Re: Predicted Oil Collapse Underway...

Unread postby sparky » Fri 27 Mar 2020, 01:27:51

.
now the guessing game is how much demand will shrink , the numbers are all over the place

The global spread of the coronavirus will cause oil demand to drop by roughly 20 million b/d to about 80 million b/d this year, Fatih Birol, executive director of the International Energy Agency, said Thursday.

S&P Global Platts Analytics forecast global demand to fall by 4.5 million b/d in 2020, with a 15% demand drop in April and May. ...that would be 15 millions barrel/day knocked out .

Goldman Sachs this week forecast oil demand to fall by 10.5 million b/d in March and as much as 18.7 million b/d in April.

I see a contraction in demand of between 5 and 10 millions barrel/day by the last quarter of the year
OK it's a guess off the top of my head but it's a free word and obviously all the other predictions are guesses too
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Re: Predicted Oil Collapse Underway...

Unread postby Outcast_Searcher » Fri 03 Apr 2020, 17:25:15

sparky wrote:.
now the guessing game is how much demand will shrink , the numbers are all over the place

The global spread of the coronavirus will cause oil demand to drop by roughly 20 million b/d to about 80 million b/d this year, Fatih Birol, executive director of the International Energy Agency, said Thursday.

S&P Global Platts Analytics forecast global demand to fall by 4.5 million b/d in 2020, with a 15% demand drop in April and May. ...that would be 15 millions barrel/day knocked out .

Goldman Sachs this week forecast oil demand to fall by 10.5 million b/d in March and as much as 18.7 million b/d in April.

I see a contraction in demand of between 5 and 10 millions barrel/day by the last quarter of the year
OK it's a guess off the top of my head but it's a free word and obviously all the other predictions are guesses too

Given the supposed expert guesses are obviously round numbers like 20% or 15%, 10% or 5%, you certainly don't have any apologies to make for your educated (or not) guesses. In fact, YOU get props for at least being honest about it!

(And as always, I freely admit any number I give would be guesses. Except to say I'd be DAMNED surprised if the demand didn't drop in 2020 and 1H'2021, vs 2019, I have no clue. Just too many variables and open questions, boss! :)
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predicted Oil Collapse Underway...

Unread postby onlooker » Fri 03 Apr 2020, 18:04:20

"We are mortal beings doomed to die
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