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There is still very little clarity on the state of the oil markets, and the recent rally did nothing to dispel that fact. Still there is a bit of consensus around the notion that the rally will be short-lived. Just a few short weeks ago it appeared that oil had hit bottom. After briefly dipping below $40 per barrel, speculators began taking more bullish positions on oil, and prices leveled off in the mid-$40s for the month of September. As more and more data trickled in, pointing to a sharper slowdown in U.S. oil production, markets grew more confident that...

The worst could be over for oil prices, if the whims of a growing number of speculators are anything to go by. Hedge funds are taking their most bullish position on crude oil prices in two months. New data from the Commodity Futures Trading Commission shows that net-long positions on crude oil increased by 14,821 contracts, reaching a two-month high of 147,678 positions. These swings in investor sentiment can move the price of crude. In recent weeks, we had seen an inordinately pessimistic view of crude oil, with short positions hitting their highest levels in years. Short betting pushed WTI...

In Segment 1, Dr. Ireland explains the benefits of lifting the decades-old ban on exporting U.S. crude oil. In Segment 2, Dr. Ireland explains the benefits of building the Keystone XL pipeline.

Economist Ed Ireland who Chairs the Barnett Shale Energy Education Council shares his expertise on hydraulic fracturing or “fracking” and why we should not fear that it is possible for the U.S. to run short on energy if we export. Exports would be a boom for job creation and wealth creation for the middle class.

“There’s just no cash.” That’s the Coles Notes from a senior banker describing the book of oil service loans he manages for one of Alberta’s leading lenders. There’s simply not enough cash flow to support current levels of debt. Bankers and borrowers have kicked the can down the road about as far as they can as more oilfield service (OFS) and exploration and production (E&P) companies default on their loans and seek more relief on lending covenants. While a significant oil price increase to lift all the sinking boats will surely come, it won’t happen soon enough. More of the...

The P5+1 agreement with Iran on Iran’s nuclear program has generated (sometimes fevered) anticipation of an Iranian oil bonanza at the end of the nuclear agreement rainbow, both in terms of the increase in Iranian crude output and the business opportunities for foreign firms in driving the increase. The anticipation comes from several sources. Iran’s crude potential is one. According to the U.S. Energy Information Administration (EIA), Iran’s proven crude reserves, 158 billion barrels, are the world’s fourth largest (and among the cheapest to produce at $8-to-$17/barrel, depending on the source,). Iranian public statements expressing determination to increase crude output...

Oil prices have posted their strongest rally in years, jumping an astounding 27 percent in the last three trading days of August. While much of the recent price movement defies reason and is enormously magnified by speculative movements by traders to take and cover their bets on oil, still, there were a series of rumors, events, and fresh data that helped contribute to the spike. For example, on August 31, the oil markets woke up to the news that Russian President Vladimir Putin will meet his counterpart from Venezuela to discuss “possible mutual steps” to stabilize oil prices. The meeting...

Despite low oil prices, Saudi Arabia is maintaining its investment in its oil industry. Saudi Aramco Chairman Khalid Al-Falih indicated in March that Saudi Aramco would not cut investment. James Crandell, a Cowen & Co. oil analyst cited in this article, who has tracked oil companies’ budgets for many years, estimates that Aramco and its Kuwaiti and UAE counterparts will increase their investment in oil exploration and production in 2015 by 4.5 percent to $38.1 billion. (If proportional to output, the Saudi share would be $24.5 billion). On it’s website, the Saudi Arabian General Investment Authority (SAGIA) identifies Saudi Arabia...

OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil. Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow OPEC members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial...

There goes crude oil again. On Tuesday morning, West Texas Intermediate crude futures in New York fell 4% to as low as $43.03 per barrel. Brent crude, the international benchmark, was also lower, near $50 per barrel, after on Monday having its biggest one-day jump in a month. We got OPEC's latest monthly production numbers Tuesday morning, and they showed that production surged to a three-year high in July. The 12-member oil cartel has overshot its production target for at least a year in a bid to maintain its market share. After what seemed like a recovery in prices around...

Prominent hedge fund manager Andy Hall got burned in July after oil prices crashed. Heading up Astenbeck Capital Management, Hall has made very large bets that oil prices would rebound, citing the unsustainably low oil prices and the rise of demand across the world, particularly in Asia. But July was a brutal month for him. His hedge fund lost 17 percent of its value, or about $500 million. Bloomberg profiled him and another notable trader, Pierre Andurand, who has taken the opposite position, arguing that oil prices will remain low for the next two years. And while Hall’s hedge fund...

Saudi Arabia has long enjoyed the status of being the top crude oil exporter in the world. With record production of 10.564 million barrels per day in June 2015, Saudi Arabia has been one of the major driving forces behind the current oil price slump. The Saudis have kept their production levels high since last year in order to drive other players (especially U.S. shale drillers) out of business. Equally clear is the fact that this strategy of maintaining the glut and driving out rivals hasn’t worked so far. Even when we look at the refining sector, we see that...

Canada has given oil sands a dirty reputation, but a breakthrough, commercially viable technology has caught the eye of a former Exxon Mobil president who is putting it to use to clean up Utah’s billions of barrels of oil sands. Imagine extracting high-quality oil out of the estimated 32 billion barrels buried in Utah’s oil sands, without creating the toxic wastelands that have resulted from oil sands projects in Western Canada. And imagine doing it at a cost that can still turn a profit in today’s oil price slump. That would be highly enticing to some of the large operators...

The plunge in oil prices last year led many to say that a decline in U.S. oil production wouldn't be far behind. This was because almost all the growth in U.S. production in recent years had come from high-cost tight oil deposits which could not be profitable at these new lower oil prices. These wells were also known to have production declines that averaged 40 percent per year. Overall U.S. production, however, confounded the conventional logic and continued to rise--until early June when it stalled and then dropped slightly. Anyone who understood that U.S. drillers in shale plays had large...

Shale reservoirs have become an important part of North American oil and gas supply and their development has begun a new era of oil and gas production worldwide. Advances in well drilling and completion technologies supported the rapid development of shale resources which contributed to the almost overwhelming success of U.S. shale in recent years. Globally, Argentina’s Neuquén Basin and China’s Sichuan Basin are the two front-runners to emulate the successes of the United States, with Poland, Algeria, Australia, Colombia, Russia, and Mexico still in earlier phases of exploration and evaluation, while Saudi Arabia also has plans for domestic shale...

What OPEC countries fear most is a follow-up technological revolution that will lead to a second oil boom in the U.S., and that fear is now being realized. A technological revolution spurred the U.S. oil boom that resulted in the greatest increase in domestic oil production in a century, and while that has stuttered in the face of a major oil price slump and an OPEC campaign to maintain a grip on market share, the American response could be another technological revolution that demonstrates that the first one was merely an impressive embryonic experiment. It’s not only about shale now—it’s...

The news from the IEA is not good. “World oil demand growth appears to have peaked in 1Q15 at 1.8 mb/d and will continue to ease throughout the rest of this year and into next as temporary support fades.” I don’t have great faith in forecasts but the data shows declining demand growth from late 2010 to the 2nd quarter of this year The weak global economy is the cause of low demand growth. The current debt crisis Greece and collapsing stock markets in China are the latest alarm signals.

Oil’s oversized reaction to negative news from Greece and China on Monday should really have come as no surprise with the value of 20/20 hindsight. I have been writing for some time now that the commodity would break out of its narrowing range and that the more times it failed to break the resistance point at $62, the more likely it was that that break would be in a downward direction. It is logical that the longer that it took, the more violent that break would be. Traders were looking for excuses to sell and last weekend gave them plenty...

The oil markets could be about to enter another round of soft prices. The OPEC decision on June 5 to leave its collective target unchanged was widely expected. As a result, oil prices barely flinched. But there are other reasons to think that oil prices could see a bit of a downturn in the coming weeks. First, OPEC revealed in its latest monthly oil report that it is still producing well above its stated 30 million barrel per day target. Saudi Arabia’s output inched up another 25,000 barrels per day in May from the month before in a further sign...

Oil rising to $60/bbl is displeasing some people, particularly the shorts. Some of the more extreme –those calling for oil in the $20’s – have wisely fallen silent. Others, like Goldman Sachs, who a few months ago had set their flag in the 30’s, have unfortunately not gone so silent. They recently moved their flag into the 40’s but they continue to talk a lot. A better strategy – though one that would require some humility — would be to stop talking and listen. Recent and compounding data will soon wash away the walls of worry erected by the experts....