Canada Ping!
Canada
Good post, thank you.
>> Canadian companies should be putting strategic plans in place that prevent them from capitalizing on opportunities.
... said no CEO, ever.
That must be a mistake.
Canada Ping!
So at what point is every crude holding tank, tanker and pipeline 100% full(assuming there is still pumping going on and this isn’t a demand issue).
I keep looking for a pony under the pile of crap. I don’t see a return to the heady days of the last two years in Shale anytime soon. I got my first victim resume on Friday. There will be a lot more of them and mostly from the shale business. I’m very afraid that the almost never ending shortage of engineers and such is going to become a true glut.
I forgot who was on Bloomberg but he gave a pretty rational evaluation of shale... projects, not oil fields. His group has never invested in shale. He understands the decline rates and the economic model of shale. Few others seem to. Shale now is like a 35 day trip in a lifeboat with 30 days of water. If the well does not pay out in the first 6 months to a year it never will... there just isn’t enough production left after that to make a decent rate of return.... The best wells are able to payout in that time all the way down to about $50 but the mean well is not... the quality of the mean well all depends on where you are in the area.... sweet spot or not.
Anyway. Without the shale bump global decline at “normal” drilling rates is about what, 2 to 3% a year? Shouldn’t take long to work off a mere 1% surplus so often referred to as a GLUT... how foolish that seems to me. 1% excess supply is so easy to remedy. We don’t need 100 plus oil, we need steady 80 or so in real dollar terms. When the Saudis said the target was 90 I felt pretty good about that. Thinking it might be a healthy blend for economies and production.
There was no more reason for 100+ the last three years than there is for 50 now. Oil has been too high and it has made me about as uncomfortable as the low price does now because I knew it would discourage demand and hurt the economy. It did both. The largest industry in the world allows themselves to b price takers and constantly pilloried by a bunch of snot nosed traders.
Oh for the days of the Texas Railroad Commission and allowables. We had a pretty good oilfield in those days. Steady, quiet, reliable, good prices to the consumer, predictable. We have lived on a roller coaster in so many areas of the economy for so long. It seems like things were more stable a few decades ago before the 70s.