Tuesday, March 14, 2017

With Regard To Oil And The Price Of Oil -- For Both Russia And Saudi Arabia These Are Existential Issues -- March 14, 2017

This is quite interesting.

Three countries with existential issues:
  • North Korea
  • Saudi Arabia
  • Russia
For decades, as North Korea came closer and closer to the edge, they upped the nuclear ante and the western world responded by sending them cash. Under Trump, that has come to an end. Instead of cash, Trump is sending drones and US Navy Seal Team 6.

By the way, it's not the US shale sector that's riding the coattails of Saudi's cut in oil production, it's Russia. Russia is taking advantage of Saudi's predicament.

By the way, did you all see the break-even price in the Bakken today? $20. [Update: see first comment.]

Permian doesn't come close to $20 for those who paid $40,000/acre for fringe areas in the Permian. This could get ugly.

Baby Makes Her Blue Jeans Talk, Dr Hook


  1. Hi Bruce- Love your blog... I check it out every day to see what's going on in the Bakken, and beyond. I suppose it can be read in one of two different ways, but I think when NDIC says that breakevens have dropped from $9 to $20, the way they probably should have worded it is that breakevens have dropped (anywhere from)$9 to $20. If a company had a breakeven of $50, and they managed to lower it by $20, they would still be at $30. That is how I read it, anyway.

    1. You may be correct. I thought about that also.

      I read that line and re-read that line, trying to sort it out.

      I do know that one operator told his folks many months ago -- it might have been a year ago -- that his company could make money on $20-oil or thereabouts. I'll see if I can find that post. It was pretty obscure.

      However, when thinking about the $20 -- go back to this post: