Posted on 04/14/2015 5:33:27 AM PDT by thackney
The shale oil bonanza that made millionaires from Texas to North Dakota is slowing down for the first time in years, a sign that painful industry cutbacks are starting to have an impact.
The nation’s oil production is set to slip this month by 57,000 barrels a day as natural declines in older shale wells outpace gains from newly drilled wells, the U.S. Energy Information Administration said in its monthly drilling report on Monday.
More than 70,000 barrels of oil a day are expected to be lost from April to May in North Dakota’s Bakken Shale, South Texas’ Eagle Ford Shale and the Niobrara Shale in Colorado, Wyoming, Kansas and Nebraska. That handily beat out forecasts for Permian Basin’s increase of 11,000 barrels a day in West Texas and the Utica Shale’s 2,000 barrel a day boost in eastern Ohio.
The EIA’s report comes as oil traders are watching for any sign U.S. oil companies will stop pumping as much crude amid an oversupplied global market. Any relief could help lift crude prices after a volatile nine-month slide.
The EIA had said in March the same three shale plays would see output fall in April for the first time in six years. The losses were masked by gains in the Permian Basin.
Oil companies have cut billions out of their spending plans this year and have sent more than 900 U.S. drilling rigs to the sidelines in recent months. But U.S. output could be declining in part because oil companies are storing crude in wells that have been drilled but not completed.
Analysts say firms have reason to start pumping some of the stranded crude as prices have edged up, but they risk flooding the market if they start producing all at the same time. That could keep prices down.
The EIA says output in the Eagle Ford could fall by 33,000 barrels a day to 1.69 million in May; the Bakken is set to decline by 23,000 to 1.29 million; and the Niobrara is expected to see 14,000 barrels a day evaporate, with monthly production dropping to 403,000 barrels a day.
The Gas lines were before Carter became President. He was elected in 1976. The embargo was 1973~74.
did you note the two qualifications I placed on the term robust?
go to Pennsylvania and you will see outstanding drilling results from the core Marcellus.
Yes, there remains robust drilling for key areas.
Your chart denotes the entire US,
By the same token, oil drilling remains robust in certain key areas as well.
There was a second gas crisis during the Iranian revolution in which gas went up drastically. I remember gas going up to $0.35 per gallon and thought that was horrible, then it went higher. There were some gas lines during that time also. Carter either had no clue or had his strings pulled by his handlers.
I think I understand the confusion. You first talked about OPEC making a cut to “teach a lesson”. That was the 1973~74 embargo.
The 1979~80 oil issues came from the Iranian Revolution and the Iran-Iraq war. Iran’s oil production and then later Iraq was cut at this time while Saudi and others pumped oil like crazy.
The Iranian Oil Crisis
http://www.heritage.org/research/reports/1979/02/the-iranian-oil-crisis
Before the chronic work stoppages began in October, Iran was the world’s fourth largest oil producer with an average output of 6.05 million barrels a day (MBD) the equivalent of almost one fifth of OPEC’s total production in fueling the economies of the industrial West; its 5 MBD average export level provided for roughly 10 percent of the non-communist world’s oil needs.
When the politically-motivated strikes reduced Iranian oil output below Iran’s domestic energy requirements, the global oil production network was stretched taut as more than 3 MBD of surplus production capacity was thrown into the breach, leaving oil importers to make up the remaining shortfall by drawing down worldwide oil reserves by an extra 2 MBD.
The chief source of new oil output was Saudi Arabia, the swing producer par excellence which functioned as a balance wheel to partially offset the Iranian shortfall and stabilize the volatile world oil market. A spectacular 3 MBD production boost brought Saudi production up to 10.5 MBD by mid-January, about 2 MBD higher than Riyadh’s 8.5 MBD self-imposed average annual production ceiling.
In addition Kuwait raised output levels by about 550,000 BD Nigeria and Venezuela provided significant supplementary oil pro duction;and Iraq, Abu Dhabi, and other Persian Gulf emirates provided marginal additions to world oil supplies
Carter made minor corrections to the price controls and regulations that Nixon imposed on the country, but they were not sufficient. Carter was too much of a socialist to give up most government control. It took Reagan to clean out most of that mess.
I have direct knowledge of Marcellus and Utica, both are decreasing and related employment is cratering.
Not a description I would call robust.
Think Dubai
English is the language of that truly multinational center of trade
I don’t remember ever see job ads describing skills that are not needed.
Once again, that is across entire play, not specific to a core area.
Core areas remain strong.
Do you think there are any specific counties in the Marcellus region where the drill rig count is not down in the past year?
probably down all around.
I also gather I am not explaining myself very well.
The oil and gas industry is down on a general basis due to pricing.
There is still good money being made in pockets, like core areas of the Marcellus and Eagleford, or Deepwater. In those places, sure there is scaleback, but companies continue to drill and develop, as there is money to be made.
As an example, at my property in East Texas, I am being approached to have 3D shot on it, there is a major NGL pipeline coming through, and several wells by an operator nearby have recently came in better than expected, and caused per acre bonuses to skyrocket.
The oil and gas industry will remain strong in those areas justified.
What we saw over the past several years was an over-simplification of a shale play in which an overextension of merit was placed on drill areas that were speculative, even ridiculous. That is not happening now, but those areas where technical knowhow has proved economic reserves at lower prices are valid, is still underway with vigor.
BTW, I looked up the word ‘robust’ and here is what the dictionary says:
“durable, resilient, tough, hardwearing, long-lasting, sturdy, strong”
It is a valid term for proved plays that make money, not for the overall industry.
We agree far more than we disagree. Thanks for taking the time to explain.
I wouldn’t use the term robust to describe even the best areas, but most of the descriptions apply.
Cheers!
LOL! I know just examples where ARABIC not listed as a requirement.
That would be every job description I see.
THAT IS AWESOME!!!!!!
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