Repeating their trillion-dollar mistake OPEC+ sees no need to restrict production.
Bloomberg suggests:
Crude prices, trading at about $62 a barrel in London, may tumble
almost 30% to $45 a barrel if the Organization of Petroleum Exporting
Countries and its allies don’t announce deeper production cutbacks,
according to Morgan Stanley. Citigroup Inc. and BNP Paribas SA predict a
slide to the low $50s.
That would intensify the strain on group members like Venezuela, Iran
and Iraq, which are already reeling from economic crises and political
unrest. It would also ripple through the rest of the industry, hitting
the shale boom that has transformed the U.S. into the world’s biggest
oil producer.
“The prospect of oversupply looms over the market in 2020,” said
Martijn Rats, global oil strategist at Morgan Stanley. “Either OPEC
deepens its cuts, or prices will fall to about $45 a barrel, and force a
slowdown in U.S. shale that balances the market.”
LOL:
OPEC+ says it will need to step in to fill the oil demand shortfall ... in 2030.
The Permian must be absolutely huge. Remember, estimates place it larger than Saudi Arabia's monster field.
IEA woke: wow, I couldn't believe the number of stories yesterday regarding the growth of US shale and the effect it will have on global markets (read: OPEC). At first, I thought it was a one-off, the story, I posted yesterday, but late last evening, I ran into story after story about US shale. F
rom ArgusMedia, a great example:
US shale production is likely to stay "higher for longer", reducing the share of Opec members and Russia in the global oil supply, the IEA said in this year's World Energy Outlook (WEO).
"Efforts to manage conditions in the oil market could face strong headwinds," it said.
In the WEO's Stated Policies scenario, which incorporates existing measures and announced policy intentions and targets, but "does not speculate on how these might evolve", annual US production growth "slows from the breakneck pace seen in recent years". But, the US still accounts for 85pc of the increase in global oil production to 2030, and for 30pc of the increase in gas. The US will produce more oil and gas than Russia by 2025 under this scenario, the IEA said.
In this scenario, US tight crude production grows from 6mn b/d in 2018 to just under 11mn b/d in 2030. The majority of this growth comes from the Permian basin in Texas, "which by itself produces more crude than the continent of Africa soon after 2030."
And, it's not going to slow down:
"There is a material slowdown after 2025, but this does not lead to a
definitive peak in oil use," the WEO said. Demand increases to 105.4mn
b/d in 2030, then by 100,000 b/d each year on average during that decade
to 106.4mn b/d in 2040.
From S&P Global Platts: IEA boosts US shale estimate "warning" for OPEC. Peak oil? What peak oil? Huge story:
- US tight oil output peak moves to mid-2030s
- OPEC's market share to drop to 36% in 2025
- income squeeze seen for traditional producers
IEA sees US shale squeezing OPEC influence:
from The WSJ --
Unceasing U.S. shale-oil production will reshape global energy
markets in the years to come, bolstering the country’s influence over
nations in the Organization of the Petroleum Exporting Countries, the
International Energy Agency said Wednesday.
In its annual World
Energy Outlook report, the IEA said that even as annual U.S. production
growth slows from the pace seen in recent years, its forecast scenario
for policies already announced mean that the country will account for
85% of the increase in global oil production to 2030.
“U.S. growth will limit the ability of traditional exporters
to manage exports,” said
Fatih Birol,
the IEA’s executive director. “Countries whose economies are
exclusively reliant on oil-and-gas reserves are facing serious
challenges.”
My hunch is that Warren, Biden, Sanders, et al, want to stop this.
Perfect timing: along with the RBN Energy blog today (see below),
oilprice has this headline: "Canada's oil giants are fed up with pipeline delays."
Unfortunately there's not much in the story; mostly clickbait.
************************************
Back to the Bakken
Active rigs:
| $56.40 | 11/13/2019 | 11/13/2018 | 11/13/2017 | 11/13/2016 | 11/13/2015 |
|---|
| Active Rigs | 55 | 65 | 54 | 38 | 64 |
Wells coming off the confidential list today --
Wednesday, November 13, 2019: 46 for the month; 141 for the quarter:
- 36364, conf, Newfield, Schneiderman 150-99-29-32-2HLW,
- 36033, SI/NC, RimRock, Skunk Creek 12-10-11-16HA,
- 34881, SI/NC, Hess, AN-Norby-152-94-0409H-4,
- 34880, SI/NC, Hess, AN-Norby-152-94-0409H-5,
- 34836, conf, Enerplus Nyx, 149-93-33D-28H,
- 34835, conf, Enerplus, Eos 149-93-33D-28H-TF, see also, #23226, #23227, #26839.
- 30991, SI/NC, BR, Gudcadia 8-1-26TFH-ULW,
RBN Energy: the outlook for gas supply, demand and pipeline egress from western Canada.
Limited natural gas export options and persistently weak gas prices
are not new phenomena in Western Canada. But market conditions in the
past couple of years have become particularly untenable. Western
Canadian Sedimentary Basin (WCSB) gas supply has ratcheted higher and
shows signs of further growth, even as its share of export markets has
been shrinking with the rise of U.S. shale gas. In-region oversupply
conditions have worsened, creating transportation constraints further
and further upstream in the WCSB, and prices at the regional benchmark
AECO hub have seen historical lows as a result. To deal with this, and
perhaps provide a long-term solution to weak natural gas prices,
pipeline egress will have to expand again after a decade of decline and
stagnation. New takeaway capacity is now starting to be developed. The
question is, will it be enough?
Today, we discuss the expanding gas pipeline options out of Western
Canada, including when, where and how much takeaway capacity will be
developed.
Canadian natural gas prices have been under siege from several angles
in the past few years. First, the growth in U.S. gas supplies has been
eroding Canada’s market share of its traditional export markets in the
U.S. So much so, that Canada’s gas exports to the U.S. Northeast have
effectively been displaced by Marcellus/Utica supplies, and those to the
Midwest are being challenged by the expanding pipeline footprint out of
the Marcellus/Utica as well. Canadian gas exports to the U.S. West
appear to be safe for now, but they too could be coming under greater
threat in the next few years as U.S. gas supplies continue rising. The
end result of this growing gas-on-gas competition downstream has been
deepening discounts for Canadian gas prices as measured by the AECO
price benchmark.
