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It's Coming: $65 Oil {Good News / Bad News}
The Atlantic ^ | OCT 28 2014 | DEREK THOMPSON

Posted on 10/30/2014 4:47:37 AM PDT by thackney

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected.

"India and China are slowing down,” said Charles K. Ebinger, director of the Energy Security Initiative at Brookings. "The IMF just downgraded Europe’s growth to less than 1 percent, and they're already quite energy efficient. Brazil’s a problem, too. All around the world there is no great growth story, and expectations are that things will stay that way or get worse."

There is also unanticipated supply. A few years ago, political turmoil was taking up to 2 million barrels a day off the market. Now production is roaring back in Libya, southern Sudan, Yemen, Nigeria, and even Iraq, and the global price of crude has fallen about 25 percent in the last five months. It's the same old story: low demand, high supply, etc.

Andrew John Hall, the alleged "God" of oil trading, is predicting $150 barrels within the next five years. But the deeper you dig, the more reasons you find to be down on the price of oil in the near future. "Japan’s announcement that they’re starting two reactors means that there will be less oil import for Japan,” Ebinger said. Second, there are industrial shifts that are reducing oil’s share in the energy market. For example, many U.S. companies are using natural gas rather than petroleum products to power their refineries. Third, hedge funds...

(Excerpt) Read more at theatlantic.com ...


TOPICS: News/Current Events
KEYWORDS: energy; oil
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To: SoCal Pubbie
Great news. Everyone can afford to pump Ethyl again!

Don't look Ethyl. Too late. She done got a free shot, that shameless hussey.

61 posted on 10/30/2014 7:00:33 AM PDT by Mark17 (MAs & PAs: Mugwumps, high jumps, low slumps, big bumps-don't you work as hard as you play)
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To: SoCal Pubbie

Ethyl hates that.


62 posted on 10/30/2014 7:33:34 AM PDT by Hessian (Time flies like an arrow, fruit flies like a banana.)
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To: thackney
Hey, lower oil prices, lovin it. Let the free market dictate.

I hear all the tawk bout it hurting the economy. Poppycock! Maybe for those who depend on oil for their livelihood, but for the rest of us, puts more discretionary cash in our pockets to spend, drive inventory replenishment before Christmas season, thus giving the economy a well needed jolt.

63 posted on 10/30/2014 7:50:45 AM PDT by servantboy777
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To: thackney

I locked in at 3.50 so my oil company is going to make a lot of money this year.


64 posted on 10/30/2014 7:58:06 AM PDT by Chickensoup (Leftist totalitarian fascism is on the move.)
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To: Chickensoup

Winter isn’t over.


65 posted on 10/30/2014 8:02:26 AM PDT by thackney (life is fragile, handle with prayer.)
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To: Cowgirl of Justice

That’s all I know and I got it third hand.


66 posted on 10/30/2014 9:52:03 AM PDT by randita ("Is a nation without borders a nation?"...Noonan)
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To: randita

It is not all bad.

Chevron’s profits climb 12 percent thanks to refining boost
http://fuelfix.com/blog/2014/10/31/chevrons-profits-climb-12-percent-thanks-to-refining-boost/
October 31, 2014

Chevron overcame a crude price slump to see its profit climb 12 percent in the third quarter as the company’s U.S. refineries and chemical plants capitalized on cheaper feedstocks and better refinery reliability.


67 posted on 10/31/2014 6:30:53 AM PDT by thackney (life is fragile, handle with prayer.)
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To: hawkaw
Don't confuse the FR conspiracy mongers with facts...


68 posted on 10/31/2014 6:33:41 AM PDT by Wyatt's Torch
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To: randita

Yeah falling prices are not good given break even levels in the shale basins.


69 posted on 10/31/2014 6:34:45 AM PDT by Wyatt's Torch
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To: randita

70 posted on 10/31/2014 6:37:20 AM PDT by Wyatt's Torch
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To: randita
Better view:


71 posted on 10/31/2014 6:43:39 AM PDT by Wyatt's Torch
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To: Wyatt's Torch

Note that analysts estimates can be way off. Not to mention great variances of cost within the same field from sweet spots to marginal wells.

http://www.reuters.com/article/2014/10/23/idUSL3N0SH5N220141023

Lost of estimates at the link above, but notice some significant variations.

For example, from that same link.

UBS INVESTMENT RESEARCH
EAGLE FORD $43.34

GOLDMAN SACHS
EAGLE FORD $80-$90


72 posted on 10/31/2014 6:50:26 AM PDT by thackney (life is fragile, handle with prayer.)
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To: MeneMeneTekelUpharsin

Little know FACT: Obama admin no longer has diplomatic relations w Saudi Arabia.


73 posted on 10/31/2014 7:03:46 AM PDT by CPT Clay (Follow me on Twitter @Clay N TX)
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To: Cruz_West_Paul2016

hmm


74 posted on 10/31/2014 7:04:19 AM PDT by CPT Clay (Follow me on Twitter @Clay N TX)
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To: CPT Clay

really?


75 posted on 10/31/2014 7:05:05 AM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: thackney

Ouch! Is the solution to Re Frack?


76 posted on 10/31/2014 7:06:41 AM PDT by CPT Clay (Follow me on Twitter @Clay N TX)
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To: CPT Clay

So these guys just play cards inside the walls all day?

http://riyadh.usembassy.gov/


77 posted on 10/31/2014 7:12:28 AM PDT by thackney (life is fragile, handle with prayer.)
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To: CPT Clay; Smokin' Joe

I would guess adding laterals would be more productive, but that would be a question for the folks with geology knowledge.


78 posted on 10/31/2014 7:14:01 AM PDT by thackney (life is fragile, handle with prayer.)
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To: thackney
The trick isn't just adding laterals, but more effectively producing the reservoir.

Initial (ca. 2002) multi-lateral wells were on one section (640 acre) leases, and went corner to corner, then we cut windows in the casing and drilled down the section lines from the same vertical wellbore.

That left some significant gaps in production, especially in a tight formation where you did not control where the frac went in the formation.

Longer laterals became more commonplace as the shift went from 640 to 1280 acre (two section) leases (ca. 2004), but these left a lot of formation some distance from the wellbore, so it raised questions of how effective reservoir drainage really was. (It did save money on rig moves, drilling vertical wellbores, and casing).

Now, with pad wells (ca. 2012), there are 4 wellbores (per formation), about 1250 feet apart, running some 9500 ft. down the length of the lease, which can be perforated and fracced in stages, with sections of the wellbore sealed off outside the liner by swelling packers to help control frac propagation.

The result is far more efficient reservoir drainage, at much less cost than drilling individual wells on separate locations.

79 posted on 10/31/2014 8:24:14 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: Smokin' Joe

Thank you as always for the info.

I know so much less about what happens in the ground than after it gets to the surface.


80 posted on 10/31/2014 8:28:09 AM PDT by thackney (life is fragile, handle with prayer.)
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