Posts Tagged ‘shale’

Petrodollars: Chinese investors second-guess Canadian oil projects

The trans-Pacific partnership of China and Canada promises to diversify product access for one of the biggest oil consumers in the world, but it also comes with problems, as Ashok Dutta explains in this week’s Oilgram News column, Petrodollars.

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As oil prices push towards $60/b, are we witnessing a “dead cat bounce”, or is the market finding some equilibrium?

On February 9 over 500 delegates crammed into London’s Mayfair Hotel for the Platts London Oil Forum 2015. I’ve lost count of how many times I’ve attended this annual event, which traditionally kicks off IP Week – it’s a fantastic opportunity for the industry to come together, and invariably features stimulating debate.

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Guest post: A lesson from the history of oil

Steven Kopits is the president of Princeton Energy Advisors, and contributes guest posts to The Barrel. 

In an interview with Bloomberg TV, BP CEO Bob Dudley took a bearish view on the price of oil, noting that the present feels like 1986, when oil slumped from $30 a barrel to $10 and did not recover until in 1990. “The fundamental supply and demand does remind me of 1986 a bit, where we could go into a period in this decade of lower oil prices,” Dudley noted, adding that prices may stay in a range below $60 for as long as three years. “It will be a long time before we see $100 again.”

I agree with Dudley: 1986 is the appropriate template for today’s oil market dynamics. However, the understanding of the precedent is incomplete, and the analogy, imperfect. The differences matter.

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Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist.

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Has US oil production peaked? An EIA report argues both sides

Want to dazzle party guests this holiday season with a data-backed argument that the US oil boom may have peaked? Well, the US Energy Information Administration has a report you should probably read.

Want to shut up that obnoxious blowhard who keeps using EIA data to support his argument that the glory days of US oil may have gone by? Want some government data of your own to defend your claim that we have yet to see the peak of US oil production?

I have good news: You can use the same report.

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The Oil Big Five: Looking into the short future of 2014

The end of December is just around the corner, and it’s typical at this time of year for publications to take a grand look backward to sum up the year. What kind of proclamations can we make about the global oil industry in 2014? What sort of lessons are there to be learned, and how will we look back on 2014 years from now?

As tempting as it may be to take that look in the rearview mirror, today we’re going to look ahead with our December version of The Oil Big Five. By now you know the drill: We ask our Platts editors and analysts in offices around the globe what they think are the biggest issues or topics in the oil world for the upcoming month, and then we ask you for your thoughts. Are we right, are we wrong, and what do you want to see covered? Leave us your comments here or with #oilbig5 on Twitter.

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Guest post: in the oil market, you can’t have it both ways

The media is replete with stories of low oil prices killing the shale revolution.  This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth.

We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d  per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015.

Now, where would supply growth come from to meet that demand?

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Australian junior chases Rocky Mountain oil and natural gas high

A small Australian upstream company, with the appropriate name of American Patriot Oil and Gas, is hoping to achieve what several of its peers have been unable to do: turn a little into a lot in the US market.

American Patriot’s business model is simple, yet crucially different from that pursued by some other small Australian companies that have burned through their own capital trying to make a go of it in US conventional and unconventional oil and gas, according to the company’s CEO Alexis Clark.

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Operator outputs from US oil and natural gas resource plays continues to leapfrog

Perhaps the most striking thing upstream companies revealed in their recent round of second quarter calls was the astounding production increases from US unconventional plays brought about by an array of tweaks to well drilling and completion techniques.

One tactic they’re using to eke more hydrocarbons from the ground is optimized well spacing — configuring wells as close as possible to best drain the reservoir without interference. Other techniques are placing hydraulic fracture sections or “stages” closer together and using more proppant to hold fractures open so oil and gas can flow more easily from the reservoir.

It’s taken a few years for operators to figure it all out, but about four years after they began widespread exploitation of unconventional oil plays, which are the current focus of most large companies, they are largely approaching full development mode.  In the meantime, they have seen staggering production growth, especially on the crude oil side.

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The changing face of global gas, or, chasing the arbitrage

The fate of US LNG import terminal projects was sealed as the amount of relatively low-cost gas produced onshore soared in the middle of the last decade. Most of them were scrapped before getting off the drawing board, but the more advanced of them, notably Cheniere’s Sabine Pass, went on to become export terminals, in a radical and apparently successful bid to salvage their backers’ fortunes.

That well-documented transformation was only made possible by the yawning price difference opening up between the depressed Henry Hub and the rest of the world.

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