Sideways Oil

Oil Falls to 7-Week Low on Demand Outlook, Stockpile Gain at Bloomberg.

Jeff Rubin on oil and economic growth:  Bloomberg.  Also, Musings: Energy, Unemployment And The Health of The US Economy at Rigzone.

“Presently the estimated breakeven price for the “average” well in the Bakken formation in North Dakota is $80 – $90/Bbl.”  Hans will question the author, but to me the point is the high price required for new production to be economicOil Drum

S&P 500 Works Off Overbought Levels at BespokeChess remains constructive.  Jeff Saut:  “…we were probably going to get a sideways correction; and that’s exactly what we got last week, which brings us to this week…yet it still does not feel like the stock market is ready to leap higher until we spend a few more sessions working off the overbought condition…”

 

3 thoughts on “Sideways Oil

  1. Mr Chanos, is rather brilliant, IMHO….Two years he made the Chine decline call…I also suspect, he would tell you, that the run in comods is done…

    I have this gut feeling (no indigestion) that we will see $2.25 or lower for natty…

  2. Mr LikVern, quote of the day

    “Presently the estimated breakeven price for the “average” well in the Bakken formation in North Dakota is $80 – $90/Bbl In plain language this means that presently the commercial profitability for new wells is barely positive.
    The “average” well now yields around 85 000 Bbls during the first 12 months of production and then experiences a year over year decline of 40% (+/-) 2%
    The recent trend for newer “average” wells is one of a perceptible decline in well productivity (lower yields)
    As of 2007 and also as of recent months, the total production of shale oil from Bakken, has shown exceptional growth and the (relatively high) specific average productivity (expressed as Bbls/day/well) has been sustained by starting up flow from an accelerating number of new wells
    Now and based upon present observed trends for principally well productivity and crude oil futures (WTI), it is challenging to find support for the idea that total production of shale oil from the Bakken formation will move much above present levels of 0.6 – 0.7 Mb/d on an annual basis.”

    Vern is an co-hart of the Oildrum and everything they stand for..Peak oil and doom and gloom, is what they promote, despite the known facts..

    The oildumb continues to discredit itself on a regular bases.

    What is his expertise? What are his source(s) to claim Bakken costs are $90 pb?

    If in fact that is true, then no BOC could possibly generating a profit…State officials have repeatedly offered 45 to $55 pb, as general production costs.
    Mr Filloon, has also stated similar numbers as well….

    Why is Shell and Exxon, taking large Bakken positions
    in high cost, low margin plays?

    Why are oil companies continuing to spent hundreds of millions in declining fields?

    By the conclusion of 2013, N Dakota production will exceed 700,000 pbpd…That production level will be larger the following year, too !

    By January 1, 2014, Mr Like-Vern will be irrelevant to any point of fact..

    Good news for fans of the PanicDrum and Mr Like-Vern, they are hiring the soon-to-be-laid-off replacement NFL referees, along with movable goalposts…

    Long Live Oil ! God’s glorious bounty has come to the plains of the Dakota…

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