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Much Sound and Fury Signifying Nothing
Initially, the agreement between Russia, Saudi Arabia, Qatar and Venezuela to freeze production at January levels sparked optimism. Oil market observers thought this might lead to price stability, and ultimately, to recovery. However, optimism did not last long and there is an emerging consensus that the agreement was much like Hamlet’s reflection on life. A… Read More
Shale Production to Drop
“World Oil” reports that shale oil and gas production is finally going to fall. In spite of a 70% drop in the price of crude oil over the last 20 months, production has remained relatively flat. Shale operators have proven very resourceful, employing a number of strategies such as using drilling wells but not completing… Read More
Shale Revival
“Rigzone” reports that despite low prices and falling production, U. S. oil output will recover to a record high of 14.2 million barrels of oil per day (bopd) by 2021 according to the International Energy Agency (IEA). The shale component of U. S. oil output is projected to drop by 600,000 bopd this year and… Read More
Output Freeze No Help
A recent article in “World Oil” reports that Goldman Sachs dismisses the impact of the recent oil production freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar. While an agreement between OPEC and outside producers would be the first in fifteen years, analyst Jeffrey Currie questions whether it will ever materialize. Further, to really… Read More
Déjà vu All Over Again?
A contango exists when the market perceives that future prices will exceed current ones. This is now the case with oil. Investors and traders are attempting to exploit this by selling futures contracts at the higher prices and buying at prevailing prices. As long as the costs of acquisition and storage are less than the… Read More
