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oil has always been bipolar.There will be another boom at some point but it could come way down before that happens.
Bi-polar, not sure what you mean. If you mean cyclical I would for sure agree. Historically we are still at high prices and at what some would say is still above the norm excluding recession & other macro events.
Bi-polar, not sure what you mean. If you mean cyclical I would for sure agree. Historically we are still at high prices and at what some would say is still above the norm excluding recession & other macro events.
I don't think that looking at oil over the past 70 years has much do do with oil for the next 70 years
Technology over the past ten years has been transformative. Drillers know where it is and how to get it.
Really old wells where only 5%-10% of the oil has been extracted can be drilled with horizontal techniques to get an additional 5% - maybe 25% more. It's just sittin there.
For wells that are fracked it's being found that they can be fracked more than four or five times. This turns fields with hundreds of billions of bbls that only had a few billion bbls recoverable now have tens of billions of bbls recoverable. Users of oil, NG, NG liquids, can ignore prices for the foreseeable future.
The federal government passed a law in 2005 exempting fracking fluids from the Clean Water Act. The oil companies applied for fracking permits using their own assumption that the fluids wouldn't permeate the groundwater for 100 years. They greased the skids for more fracking and domestic deepwater drilling in the Gulf of Mexico since they saw the decline in conventional domestic sources.
I don't think that looking at oil over the past 70 years has much do do with oil for the next 70 years
Technology over the past ten years has been transformative. Drillers know where it is and how to get it.
Really old wells where only 5%-10% of the oil has been extracted can be drilled with horizontal techniques to get an additional 5% - maybe 25% more. It's just sittin there.
For wells that are fracked it's being found that they can be fracked more than four or five times. This turns fields with hundreds of billions of bbls that only had a few billion bbls recoverable now have tens of billions of bbls recoverable. Users of oil, NG, NG liquids, can ignore prices for the foreseeable future.
You're confusing looking at price over the last 70 years with technology on extracting oil. It's simple supply/demand equation, the easier it is to get the commodity the more supply, hence the lower price. And when you toss in lowered demand....welcome to your new normal.
The applications of this technology are highly exaggerated. Both the Permian Basin and the Bakken Field are in decline. Tight oil producers are producing as much as they can, so they can pay off their interest payments. International Oil Companies have not invested in long term infrastructure. Within probably three years, there will likely be an oil shock due to lack of infrastructure.
They can cannibalize old fracked wells for only so long.
It's pretty much dead in the water for the other lower cost source of domestic crude oil. There have been virtually no drilling permits issued for shallow water rigs in the Gulf of Mexico for two years.
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