$200 Oil -- February 5, 2015

The other day a Saudi spokesman suggested "we" could see $200 oil. I didn't link the article; I'm not even sure I read it. I don't spend much time reading what folks predict for oil prices; it seems to be a fool's errand, as they say.

Having said that, add this to the dots to connect when thinking about $200 oil (I might come back to this and write a bit more on what I wrote a reader with regard to $200 oil but this will have to do for now; I'm behind in all the news stories that start showing up after the midnight hour.

Reuters via Rigzone is reporting: Oil Majors Fail To Find Reserves To Counter Falling Output.

Big oil companies had a poor record of finding and producing oil and gas last year, according to figures out in the past week – and big cuts in spending in response to falling crude prices could undermine their plans to turn that around. Four of the world's six biggest oil firms by market value – Royal Dutch Shell, Chevron, BP and ConocoPhillips – released provisional figures showing together they replaced only two-thirds of the hydrocarbons they extracted in 2014 with new reserves.

Combined, those four and industry leader Exxon Mobil posted an average drop in oil and gas production of 3.25 percent last year. All predict their output will increase and new reserves will be added in coming years. But the 2014 results echo longer-term trends.

Then this:

The latest collapse has seen prices halve since June. In recent months, the biggest oil groups on both sides of the Atlantic have announced sharp cuts in capital expenditure (capex) out as far as 2017, as they seek to preserve cash to maintain dividends. Investors have largely welcomed the focus on dividends. But some say the cuts could come back to bite the industry. 

Much more at the link.