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OPEC Optimistic
“World Oil” reports that OPEC Secretary-General, Mohammad Barkindo, feels that production cutbacks instituted by OPEC and 11 other producer nations are starting to reduce the global oil glut. While compliance with the production quota arrangement has been surprisingly good, I think the jury is still out as to how effective it will be between now… Read More
Paucity of Permian Pipelines Poses Potential Price Problem
When you see the price for WTI (West Texas Intermediate) quoted on the evening news, this is the price the oil brings at the transportation hub in Cushing, OK. Producers in the Permian Basin of West Texas and Southeast New Mexico receive this price, less the cost of transportation to get the crude to Cushing.… Read More
Future Shock?
Some crude traders fear that we might be facing a long term oil supply shortfall given current trends. Back in November, OPEC and 11 other producing nations announced plans to cutback on production in an effort to shrink the global glut and increase prices. In response, prices jumped 20% and many producers hedged future production… Read More
4Q16 Hedging Flurry
“Rigzone” reports that consulting firm, Wood Mackenzie, warns that hedging activity could exacerbate the global oil glut. Back in November of 2016, OPEC and 11 non-OPEC producers all announced their intention to cut back on oil production in order to reduce the world-wide surplus and improve prices. This drove oil prices up and many U.… Read More
VooDoo Economics
For some time now, shale operators have been patting themselves on the back for having brought down the break-even point on new wells to the extent that some domestic plays are among the most economically attractive in the world. Now, in an article in “Oil Voice” entitled “Shale Cost Reductions are 10% Technology and 90%… Read More
