Sometimes I Wonder -- April 12, 2016 -- War Is The Continuation Of Politics By Other Means

Housekeeping note: Whiting's P Lynch wells and P Earl Rennerfeldt wells have been updated. Although not often updated, nor new families added often, families are tracked here. If there is a family of wells (at least twelve wells from same pad or two neighboring pads) that is not at that post, I would be thrilled to hear about them.

 

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Imagine the impact of the Keystone XL had it not been killed by the best and the brightest. From the EIA today:

Although total U.S. crude oil imports in 2015 continued to be lower than levels reached during the mid-2000s, imports from the United States' top foreign oil supplier—Canada—were the highest on record, according to annual trade data from EIA's Petroleum Supply Monthly. Canada provided 4 out of every 10 barrels of oil imported into the United States in 2015. --- EIA

But for the Canadians, hope springs eternal.

From March 4, 2016, once the price of oil starts to move (up or down), it tends to move quickly. Today, after an 11% jump last week, and 7% jump over the weekend, today's screenshot:

$40 oil is a lifeline for US shale oil.

$50 oil will allow most US shale oil companies to survive.

$60 oil, they will thrive.

For Saudi, when their national budget is based on $100 oil, there's not a lot of difference between $40 oil and $60 oil, all things being equal.

If Doha "fails," Goldman Sachs will talk oil back down to $20.

Just one man's opinion. It's a fool's errand to opine on oil prices which I would never do. LOL.

Doha: "The Council of Elrond." Elrond:

While there still could be a deal, some analysts see the chances of a meaningful agreement as slim. The reason is that bin Salman stated the kingdom's position and is unlikely to change his mind, barring a dramatic about-face in behavior from Iran.

"This could be the mother of all buy-the-rumor, sell-the-news," said John Kilduff, partner at Again Capital.

In a five-hour interview with Bloomberg, bin Salman recently laid out his position on a freeze deal, saying Saudi Arabia would participate only if major producers, including Iran, also participate.

Putin is no Gandalf.

Update, a few hours later, 3:30 p.m. Central Time, this from Business Insider:

Crude oil pops on report that Saudi Arabia and Russia have agreed to freeze production.Crude oil prices jumped on Tuesday after an Interfax report that Saudi Arabia and Russia reached an agreement on an oil-production freeze.

West Texas Intermediate crude futures in New York surged by as much as 4% to a year-to-date high of $42.23 per barrel.

The Interfax report cited an anonymous source, and said Saudi Arabia and Russia made the decision whether Iran is in or not.

Bloomberg reported that Kremlin spokesman Dmitry Peskov said in a message that "there is hope" for an agreement regardless of Iran. Iran had said it would not join a production-cut agreement, as it tries to boost output for export now that economic sanctions have been removed.

Russia and Saudi can stop Iran using the Clausewitz aphorism: war is the continuation of politics by other means. Saudi Arabia has already made Saudi's sea lanes off-limits to the Iranians. The Iranians are struggling to get their oil tankers insured. One unexplained Iranian tanker-loss-at-sea would bring their insurance to an end. Just saying.

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The Inconvenient Truth

EIA: cheapest summer gasoline in 12 years.

Fifty percent of US crude oil comes from fracking.

Bernie Sanders wants to ban ALL fracking.

Hillary Clinton wants to make fracking too expensive to make it useful for drilling.

And there you have it. 

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Notes for the Granddaughters

From Tom Shippey's JRR Tolkien: Author of the Century, a nice discussion of Christianity vs Manichaeism. From wiki, dome data points on Manichaeism:

• a major religion founded by the Iranian/Persian prophet Mani, c. 216 - 276 AD; Sasanisn Empire
• an elaborate dualistic cosmology
• a struggle between a good, spiritual world of light and an evil, material world of darkness
• through an ongoing process which takes place in human history, light is gradually removed from the world of matter and returned to the world of light from where it came
• beliefs were based on local Mesopotamian gnostic and religious movements 
• Manichaeims was quickly successful and spread far through the Aramaic-Syriac speaking regions
• thrived between the 3rd and 7th centuries; at its height was one of the most widespread religions in the world
• churches and scriptures existed as far east as China, as far west as the Roman Empire
• main rival: Christianity in the competition to replace classical paganism
• survived longer in the east then in the west
• finally faded away after the 14th century in China, contemporary to the Church of the East (the Nestorian Church, an early Christian church), during the Ming Dynasty
• "manichean" widely applied (often as a derogatory term) as a synonym of dualism (a moral course of action involving a clear (or simplistic choice between good and evil