Abrupt Reversal Of Shale Oil's Fortunes Points To A Radical Reset Of Oil Prices -- SeekingAlpha -- January 31, 2020

Most interesting thing about this SeekingAlpha article: 268 omments, so far. Archived; will very likely "disappear" in a few days.

Most SeekingAlpha articles I read get five or six comments. Some of the comments are actually pretty good.

A reader sent me this article. I don't follow anyone over at SeekingAlpha any more now that a few of my favorite contributors have left that site.
I would take this article with a pinch of salt, as they say.

Writer's summary;

• the Reuters’ 2013 poll predicted $100 Brent. It went to $50. The 2020 poll predicts $65. If history is a guide, it will go to 2 x $65 = $130.
• the second shale oil boom was due to 500 frac spreads paid for in the first; now only 300 are left, and 200 were sold for scrap. No one is buying new.
• the prediction of a 900,000 bbl/day surge in production in 2020 is physically impossible; when the market finds that out, there will be a reset in oil prices.
• from replacement cost, assuming plentiful supplies of cheap shale oil, back to the traditional pricing dictated by parasite economics.
• Schlumberger and Halliburton have given up on fracking; they are headed offshore. That's where the action will be in 2020.

My quick first thoughts shared with the reader, not ready for prime time:

Bad:

• I'm always leery of SeekingAlpha articles
• writer doesn't mention why the sudden fall in prices, 2014 - 2017 (Saudi surge)
• as you noted, the writer bounces around all over
• his thoughts that oil could go to $120, pure guesswork (ask 10 analysts and one will get 10 different guesses)

Good:

• analyst is looking at what I think is important: frack spreads
• analyst is correct: offshore will be the "new" fad in 2020
• agree that shale production isn't going to jump that much in 2020

But I do like these kinds of articles. A lot of free association. One can take different points and explore further.

*********************************** 

Boeing

The news keeps getting worse for Boeing.

Now: the company is taking a $148 million charge linked to higher costs on the KC-46 military refueling tanker.

Link here.

The original "whisper" number was $5 billion. Then it was widely reported, $10 billion.

Now? $12 billion and it could be more.

Boeing has lined up at least $12 billion in bank loans and may tap the commercial paper market to counter the cash drain from the 737 MAX crisis.

The aerospace giant said in a regulatory filing that it expects to close a two-year loan in February after securing bank commitments, and has the option to increase the facility if it is oversubscribed.

The planned loan would help fund compensation for buyers of the grounded jet and support Boeing suppliers after the company halted production of the MAX. The added funds would also pay for Boeing’s stock dividend, which it opted to keep at existing levels this year.

The aircraft maker ended 2019 with $10 billion in cash, a level of liquidity that Boeing has maintained in recent years, tapping the bond market twice last year and doubling the size of its revolving loan facility.

“We believe our ability to access external capital resources should be sufficient to satisfy existing short-term and long-term commitments and plans,” the company said in the filing.

Boeing’s planning assumes it will secure regulatory approval for the MAX to re-enter commercial service by midyear, with assembly of the planes resuming about two months prior.