^^^ that hurt my heart

http://www.msn.com/en-us/money/markets/back-to-the-future-oil-replays-1980s-bust/ar-AA88xhq

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Goldman Sachs Group Inc. said Monday it saw a "U-shaped" recovery with depressed prices until the market rebalances and prices rise in 2016. The firm said it expected U.S. crude to average $47.15 a barrel this year, down from a previous prediction of $73.75.

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People expecting a 2009 recovery need to read the above.

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ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel, a figure that has been falling in recent years. A Conoco spokesman said improved efficiency, better technology and a better understanding of the rocks helped the company reduce costs.And it is not alone. The expense of getting oil from the Eagle Ford Shale fell by about 15%, or $7.50 a barrel, last year, despite intense competition for rigs, truck drivers and oil-field services, says Pers Magnus Nysveen, head of analytics for Rystad Energy, a Norway-based global oil consultant. Costs could fall another 10% to 15% this year as some financially weak companies pull back and competition for services lessens."The key driver here is improved efficiency," Mr. Nysveen says.Companies like EOG Resources Inc. are drilling better wells faster. EOG said recently it takes 4.3 days to drill its average well in the Eagle Ford Shale in South Texas, down from 14.2 days in 2012. What's more, as it drills more of them, it has figured out how to locate wells to get the highest oil output.Combining lowering costs and increasing output means that EOG says it can drill wells at $40 per barrel in North Dakota, South Texas and West Texas, while still earning a 10% return. We "pride ourselves on being a very efficient operator," Billy Helms, EOG's head of exploration, said at a recent industry conference.

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These figures, which keep dropping lower, tell me it is going to be more difficult to reduce supply than I thought. Which means prices should stay lower for a longer period than predicted.

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If I owned storage, wouldn't I be maxing it out due to the contango trade?

http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html
Unusual conditions right now

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Thanks for the link. It depends on what it costs you to get it into storage, store it and get it back out of storage and the cost of capital. You can buy oil today for $46 and store it until June of next year (2016) and possibly sell it for $57, according to your link.

A couple of things I get out of that link - oil prices are forecasted to grow slower than most people predict. Buying oil today to put into storage helps shore up prices today at the expense of prices in the future.

I've bought a lot of paper oil, but never physical oil that I stored for a period of time. So I have a lack of knowledge and experience on the merits of this trade.

Again, thanks for sharing.

There's not enough storage anywhere (SPR or offshore tanks) to make a dent at the world level. At this point the best place to store it is where it lays before you produce it.

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ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel

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I don't know where the media gets their numbers. I'd be hard pressed to find a company exec that would publicly say they need $XX/oil: to make a profit / yield a 20% ROR / continue to drill in X basin. There's so much misinformation and so many people spouting off figures as if they are factual, it reminds me of Chip Brown's bullsheet tweets -> "sources are saying..."

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There's not enough storage anywhere (SPR or offshore tanks) to make a dent at the world level. At this point the best place to store it is where it lays before you produce it.

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ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel

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I don't know where the media gets their numbers. I'd be hard pressed to find a company exec that would publicly say they need $XX/oil: to make a profit / yield a 20% ROR / continue to drill in X basin. There's so much misinformation and so many people spouting off figures as if they are factual, it reminds me of Chip Brown's bullsheet tweets -> "sources are saying..."

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There's not enough storage anywhere (SPR or offshore tanks) to make a dent at the world level. At this point the best place to store it is where it lays before you produce it.

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ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel

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I don't know where the media gets their numbers. I'd be hard pressed to find a company exec that would publicly say they need $XX/oil: to make a profit / yield a 20% ROR / continue to drill in X basin. There's so much misinformation and so many people spouting off figures as if they are factual, it reminds me of Chip Brown's bullsheet tweets -> "sources are saying..."

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You'll find comments like that if you look at their analyst presentations.

Most of the time it addresses individual well economics and drilling programs. Too often the media and general public confuses drill well economics with operating costs.

How do you guys feel about natural gas in the short term? I've made an absolute killing on UGAZ over the past 2 days but just sold half of my shares at $4.95 to lock in some of the profit.

hope i dont jinx anything but it seems (the last 2 days at least) that the market has set its self at $45-46 and has been hovering there... is this the bottom or are oil traders just waiting for more bad news before they hit everything?

The patterns been big drop then a few days of consolidation. I think $40 is big psychological support

I agree on the psychological support..

Diet Coke, I would not mess with any of these in the short term but that's just me.

Apache laying off across all groups in Midland.

Heard Archer completely closed their frac yard in Odessa....

I thought Archer was wireline.

Archer bought wireline a few years ago but are known for pressure pumping. The were run by the former BJ Vice President, Ronnie Coleman. I am not sure who is in charge over there now.

Oil up $2.50 today?

Time to take out a lease on a new 3 series. Wait, this isn't Dallas.

Must be confusing us with Houston. Who waste's time with a 3 series up here?

i guess i'll be cruising the odessa and midland craigslist for truck deals

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Must be confusing us with Houston. Who waste's time with a 3 series up here?

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Maserati or Panamera or GTFO. Seriously.

Tesla here, *****es! You can keep your oil!

Archer is shutting their doors in odessa. They are moving all operations out of their
Oklahoma yard. Had a few friends let go yesterday. Sad stuff. I believe the number was 100 people. The others were transferred to Oklahoma yard.

Can anyone help explain how oil prices correlate to Natural Gas prices (NYMEX)? I noticed that Natural Gas has been on a tear today (up 9.5%).

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Can anyone help explain how oil prices correlate to Natural Gas prices (NYMEX)? I noticed that Natural Gas has been on a tear today (up 9.5%).

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I would guess loosely (due to economy strength/growth having some bearing on demand), but their inventories are separate. Cold snaps will have an upward effect on the nat gas price due to inventories decreasing. I'm just saying what I would think to be true here. I work in O&G but not a commodity expert.

I work for a major and my group is going to get downscaled in a big way in the next couple months. This effort was already underway, but oil prices sinking so much has caused the downsizing requests to be even bigger.

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Oil up $2.50 today?

Time to take out a lease on a new 3 series. Wait, this isn't Dallas.

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F-350 platinum with fender flairs and a lift kit.

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Can anyone help explain how oil prices correlate to Natural Gas prices (NYMEX)? I noticed that Natural Gas has been on a tear today (up 9.5%).

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I would guess loosely (due to economy strength/growth having some bearing on demand), but their inventories are separate. Cold snaps will have an upward effect on the nat gas price due to inventories decreasing. I'm just saying what I would think to be true here. I work in O&G but not a commodity expert.

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Very loosely, oil is traded globally where as gas is still pretty much only traded domestically which is why you have things like gas trading in japan and china for mid to upper teens, and barely cracking $3 in the us. So where oil is subject to global supply/demand curves and politics, gas is only subject to unique domestic politics and supply/demand, sometimes even local like the marcellus is currently dealing with a localized NG glut

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Heard Archer completely closed their frac yard in Odessa....

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We used them for frac and wireline for a couple of years in the Permian. At first when they were Great White and after they sold to Archer. Great White didn't have the best equipment but they had good hands. Archer bought all new equipment, but wouldn't pay to keep good hands. Odessa was a really poorly run yard and I assume their Union City yard was about the same as they constantly moved equipment and personnel back and forth. They were losing money in Odessa when oil was at its peak.

Gas is on a different market than oil. I'm still bullish on gas right now due to domestic demand drivers (winter, power generation, abandonment of coal). I would be careful though. Many of the same companies dealing in gas are also dealing in oil. If their portfolios are tanking in one area, I don't see them spending a whole lot of capital in an other. I think most companies are batting down the hatches, bringing in the sails, and waiting this storm out. In any business, cash is king so when your debt is high and your hedges are about to expire, it can become a cancer to an organization.

Areas where I am more optimistic: midstream, distribution lines (lots of pipelines being replaced here), and demand driven industries like manufacturing, chemicals, and power generation/distribution.

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Gas is on a different market than oil. I'm still bullish on gas right now due to domestic demand drivers (winter, power generation, abandonment of coal). I would be careful though. Many of the same companies dealing in gas are also dealing in oil. If their portfolios are tanking in one area, I don't see them spending a whole lot of capital in an other. I think most companies are batting down the hatches, bringing in the sails, and waiting this storm out. In any business, cash is king so when your debt is high and your hedges are about to expire, it can become a cancer to an organization.

Areas where I am more optimistic: midstream, distribution lines (lots of pipelines being replaced here), and demand driven industries like manufacturing, chemicals, and power generation/distribution.

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If companies are cutting back on drilling because of the price of oil, that would have an impact on the amount of new NatGas coming online. Lower oil for a significant amount of time could lead to higher gas prices.

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Heard Archer completely closed their frac yard in Odessa....

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We used them for frac and wireline for a couple of years in the Permian. At first when they were Great White and after they sold to Archer. Great White didn't have the best equipment but they had good hands. Archer bought all new equipment, but wouldn't pay to keep good hands. Odessa was a really poorly run yard and I assume their Union City yard was about the same as they constantly moved equipment and personnel back and forth. They were losing money in Odessa when oil was at its peak.

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I remember Great White. They were terrible.

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Gas is on a different market than oil. I'm still bullish on gas right now due to domestic demand drivers (winter, power generation, abandonment of coal). I would be careful though. Many of the same companies dealing in gas are also dealing in oil. If their portfolios are tanking in one area, I don't see them spending a whole lot of capital in an other. I think most companies are batting down the hatches, bringing in the sails, and waiting this storm out. In any business, cash is king so when your debt is high and your hedges are about to expire, it can become a cancer to an organization.

Areas where I am more optimistic: midstream, distribution lines (lots of pipelines being replaced here), and demand driven industries like manufacturing, chemicals, and power generation/distribution.

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If companies are cutting back on drilling because of the price of oil, that would have an impact on the amount of new NatGas coming online. Lower oil for a significant amount of time could lead to higher gas prices.

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It could. You're absolutely correct. The hold up, especially in Marcellus and Utica is the lack of infrastructure moving gas out of the region. We have a glut right now. Until the recently approved pipelines become operational things will be tough.

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Gas is on a different market than oil. I'm still bullish on gas right now due to domestic demand drivers (winter, power generation, abandonment of coal). I would be careful though. Many of the same companies dealing in gas are also dealing in oil. If their portfolios are tanking in one area, I don't see them spending a whole lot of capital in an other. I think most companies are batting down the hatches, bringing in the sails, and waiting this storm out. In any business, cash is king so when your debt is high and your hedges are about to expire, it can become a cancer to an organization.

Areas where I am more optimistic: midstream, distribution lines (lots of pipelines being replaced here), and demand driven industries like manufacturing, chemicals, and power generation/distribution.

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If companies are cutting back on drilling because of the price of oil, that would have an impact on the amount of new NatGas coming online. Lower oil for a significant amount of time could lead to higher gas prices.

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It could. You're absolutely correct. The hold up, especially in Marcellus and Utica is the lack of infrastructure moving gas out of the region. We have a glut right now. Until the recently approved pipelines become operational things will be tough.

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Agreed x 10.