Oil Patch update: fall 2015 (West, Earth: to buy, prices, military)

[Midessan]

Well oil prices are still low, about $46, but the zombie apocalypse hasn't happened yet. And there are reasons to believe that the Permian has and will fare better than oil producing regions while prices remain low.

Forbes Welcome

Permian Continues to Pump While Others Falter | RealClearEnergy

The industry remains locked in a price war. Even mighty Saudi Arabia is starting feel the pinch.

Saudi royal calls for regime change in Riyadh | World news | The Guardian

$50 Oil Puts Saudi Budget Deficit Beyond Reach of Spending Cuts - Bloomberg Business

If the Saudis are trying to crush the Basin, their plan may have backfired horribly.

[davis449]

If the Saudis are trying to crush the Basin, their plan may have backfired horribly.

People need to stop with this crap...seriously. They are not trying to "crush" the U.S. shale\fracking industry. They are using price manipulation to hurt Iran...the harming of the U.S. shale\fracking industry is just a fortunate\unfortunate side effect.

[Philip T]

I follow that it is Human Nature to want an external "enemy," but it is not so much Saudi as it is US.

The frackers and even the Feds wanted to become this mythical US-OIL-EXPORTER-TO-THE-WORLD BS so badly again, (as in Pre-1970) they were even willing to Scorch the Earth here to do so. Same as the Tar Sands folks.

Real Deal is the Neverland Time of the US becoming a High Price Oil Exporter is never going to happen. By the time we have Surplus to Export -- it cannot be High-Priced. Which means it cannot be Frack Oil, Tar Sands Oil, nor Denbury's CO2 Oil.

Saudi's Existence in the Modern Era relies on someone Stupid Enough to go into debt just to Buy and Burn their Oil -- even when it High Priced.

And the only folks Stupid Enough to do that is US.

Once we began just bringing a bit of the US production upwards, the market was due to Saturate and Collapse, which means it Cannot Be High Price Oil and continue, wiping US out -- and who else is going to be stupid enough to buy the crap when it High-Price?

[Midessan]

I think the official Saudi explanation seems pretty likely. They are just trying to defend their market share.

[Westerntraveler]

I am starting oil company in a few months and oil always has gone up and down and I hope to God oil is 200-300 bucks a barrel soon

[kidicarus89]

Originally Posted by Westerntraveler

I am starting oil company in a few months and oil always has gone up and down and I hope to God oil is 200-300 bucks a barrel soon

Oil is never going to be 200-300 bucks probably....ever. Unless some catastrophic war or event destroys production globally.

[KathrynAragon]

The highest oil has ever been is about $136 a barrel.
InflationData: Historical Oil Prices Chart

[Trainwreck20]

I think he was being sarcastic :/

[Westerntraveler]

No i was being dead serious and i will be making millions a month if and when that happens.......i wish gas was 5 bucks a gallon.....we can never predict the long term price of oil accurately.

[Philip T]

Yeah, does not really work that way.

With Wishes, I mean.

Real question limiting the Top End price is who pays and what they will pay for it.

Here are some rough numbers -- down scaled to Retail Fuel Prices (yeah, just scale Gasoline with Diesel with Aviation:

================

Typical US Driver -- Less than $5 / gallon. Will start cutting back before there and pretty much stop by $10 / gallon.

Trucking -- Winds down to near stop at around $10 / gallon.

Farming -- Falls off between $10 and $20 / gallon.

Airlines -- Not a lot flying at $10 / gallon and above.

Military -- Can fly to $50 / gallon

===============

Since the US Drivers and Trucking are BOTH the biggest users, AND the first to fall off the pump, they sort of set the Maximum World-Wide Price on Oil.

But at that Top End price -- Frack Oil, Tar Sands Oil, and Denbury's CO2 Oil are all profitable.