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Around the world, the giant oil companies of the United States and Europe are putting the brakes on a decade-long spending spree focused on finding and developing offshore oil fields in ever-tougher environments. The reason: Soaring costs are outpacing foreseeable rises in energy prices. Analysts at Bernstein say oil prices are likely to remain stable in the near term, but they also point to a long-term uptrend, with prices underpinned by rising costs. They predict that oil prices will rise to an average of $132 per barrel in 2018, from $110 per barrel now. “The era of easy to find,...

In the short term, the Iran deal will ease the political risk premium baked into oil prices. In the long-term a gush of Iranian oil could soften oil prices enough to kill the economics of America’s tight oil boom. Given sufficient investment in drilling and infrastructure, there are ample oil reserves in Iraq and Iran to add another 5 million bpd to global oil supplies within 10 years. The Eagle Ford and Permian Basin and Bakken need sustained high oil prices to make the economics of expensive drilling and steep decline rates pay off. If crude oil benchmarks were to...

As far as U.S. shale gas goes, it's pretty much living up to the talk: the newer plays are seeing strong recovery rates over large acreage, meaning gas will keep flowing. That is not the case for shale oil. Productivity of the newest plays to come on drillers' radars have not come close to what's been coming out of the Bakken in North Dakota and Eagle Ford in Texas. And even for those two, he says, peak recovery rates of new wells drilled have been declining and flat, respectively. As a result, drillers are moving on to less productive basins...

U.S. oil output is now at 6.5 million bbl per day, in third place after Saudi Arabia and Russia (both at roughly 9.8 million bpd). There are seven good reasons why we will not see a sustained plunge in crude. - The decline rate in the Gulf of Mexico, for instance, is 23%, with the North Sea is about 10%. That means the industry needs to develop a new Saudi Arabia every two years, just to stay even. - Despite the enormous growth in the U.S., the costs of getting that oil out are growing at unprecedented rates. Bernstein figures...

"There are rumors that OPEC may call for an emergency meeting to discuss output if Brent prices stay below $100 a barrel," Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore, told AFP. Sanctions-hit Iran, OPEC's fourth largest producer, said on Wednesday that it considers the "logical" price of crude to be around $100-$120 a barrel. Analysts said the $100 price for Brent is considered ideal by Saudi Arabia, the world's top oil exporter, and falling below it could prompt OPEC to cut back on output.

At the latest Casey Research conference, respected investment analyst Porter Stansberry stood at the podium and predicted that the price of oil will fall below US$40 per barrel within the next 12 months. From my perspective, the pressures at play in the oil market are all pushing prices in the opposite direction: up. Global supplies are tightening, costs are rising, and demand is not falling.

Some claim that the U.S. has hundreds of billions or even trillions of barrels of oil waiting to be produced if bureaucrats will simply stop blocking development. But the Green River formation is the source of talk of those enormous oil resources — larger than those of Saudi Arabia —. The energy requirements — plus the fact that oil shale production requires a lot of water in a very dry environment — have kept oil shale commercialization out of reach for over 100 years. It is not at all clear that even at $100 oil the shale in the Green...

Canadian Natural Resources Ltd. has rolled out two key numbers: 85 and 75. Réal Cusson, the company’s senior vice president of marketing, on Wednesday told investors where the price of oil must trade in order for energy companies to make a go of it in the oil sands and shale gas formations. In the oil sands, Mr. Cusson said companies will flirt with trouble if the price of crude dips to $85 (U.S.) per barrel as expansion spreads in northern Alberta. “The economic reality is something we’ll have to adjust to. If oil goes down to $85, and there’s no...

Oil prices could rise to anywhere between $150 and $270 a barrel by 2020 as demand growth in emerging markets like India and China out paces expected supply, the OECD said Wednesday. The report shows the central role that Asian oil demand will play in determining prices, even as the U.S. reduces its need for energy imports amid a surge in its unconventional hydrocarbons production. Earlier this week, the U.S. Department of Energy reported China overtook the U.S. as the world's largest net oil importer.

Oil prices are likely to rise sharply from 2015, surpassing $150 a barrel in 2019 and 2020, Bernstein Research said. The 180-page report from Bernstein estimates Brent will rise from an average $113 in 2015 to $158 in 2020, with U.S. crude priced at a $5 discount. While U.S. shale oil and Canadian oil sands have reinvigorated the North American oil industry, new supplies are too small to meet emerging market demand growth. By 2015, shale oil is forecast to constitute just 3.2 pct of global supply, up from 1.5 pct now. The cost of production will support prices. Bernstein...