on the Energy picture
mentioned the possibility that the Saudis might have miscalculated. This article in the UK
Telegraph makes the same point. They suggest that it may well heighten
“geostrategic turmoil” across the Middle East and hurt the petro-sheikdoms long
before it deals a knockout blow to US producers. One miscalculation may be at
what price and for how long it will take lower crude prices to have a material
effect on U.S. producers in light of the fact that most apparently locked in
higher prices using futures contracts. With next year’s drilling budgets pretty
much already in place, U.S. producers may be in better shape than the Saudis
think and be able to last longer than many OPEC members can remain solvent.
From Pioneer Natural Resources: “We can
produce down to $50 a barrel,” said Harold Hamm, from Continental Resources.
The International Energy Agency said most of North Dakota’s vast Bakken field
“remains profitable at or below $42 per barrel. The break-even price in
McKenzie County, the most productive county in the state, is only $28 per
is improving and drillers are switching to lower-cost spots, confronting OPEC
with a moving target. “The (price) floor is falling and may not be nearly as
firm as the Saudi view assumes,” said Citigroup.
says the “full cycle” cost for shale production is $70 to $80, but this
includes the original land grab and infrastructure. “The remaining capex
required to bring on an additional well is far lower, and could be as low as
the high-$30s range,” he said.
Here’s some interesting information on the
fiscal break-even levels for various sovereign entities:
Saudi Arabia $ 98
As I said yesterday. They could wind up
being hoist by their own petard.
lastly, here are some comments from the Oil & Gas Financial Journal
from Bjornar Tonhaugen of Rystad Energy.
“OPEC is currently producing 0.6 MMbbld above their collective
output target of 30 MMbbld. If there is no change in the output target, it
could indicate a paradigm shift. Market forces would work to restore oil market
balance for the first time in decades. Prices will likely continue to slide
next year as the market realizes that the price level where US shale production
growth stops is lower than USD 60/bbl West Texas Intermediate.
“If OPEC reduces the output target to 29.5 MMbbld or less, the
market will likely stabilize but only if it is followed by immediate signs of
actual output cuts. An implied cut of 1.1 MMbbld from current production levels
would be seen as a compromise. Helped by non-OPEC producers, market balance
should be restored but not create much upward pressure on prices. A cut to 29.0
MMbbld would be needed to send prices higher next year.”
Again, not sure the Saudis are going to get
the result they hoped for.
can now get add ons for your iPhone that give it night vision and infrared
The Sonic Decanter. I’m not sure this will make that bottle
of MD 20/20 taste like Cheval Blanc, but it might improve that tannic Cabernet
Sauvignon that’s only two years old. This is another Kickstarter project. Using ultrasound on liquids had been
around for a while, but this use shows real promise.
This is hilarious! Apparently some Greenpeace nimrods picked
the wrong place to stage a protest and paid a painful price for it. They were
appalled that no one was amenable to hearing their point of view. ROTFLOL! The
moral here is don’t try to preach malarkey to a Cockney oil trader after he’s
had a few pints with lunch. Bad timing. Here’s another account. This is laugh out loud funny! One of the protesters said, “I took on a Texan
Swat team at Esso last year and they were angels compared with this lot.” Behind him, on the
balcony of the pub opposite the IPE, a bleary-eyed trader, pint in hand,
yelled: “Sod off, Swampy”
indicated that the victim’s being Bosnian wasn’t apparently a reason for the
attack. There’s a news flash! The man was beaten to death with hammers in a St. Louis neighborhood, and it’s very
likely that is was because of his race, not his nationality. This situation
doesn’t require a White House task force. It requires a harsh police response
and less sensationalism and false reporting by the media. At some point,
civilized citizens will lose patience and begin taking responsibility for their
own safety. Charles Barkley had some comments on the Ferguson debacle.
would have guessed Clive or Nigel, but Muhammad is now the most popular name in…England.