Bank of America is now predicting that Brent crude oil, which drives gas prices, will zoom to $120 a barrel by June 2022.

[4WD]

In years past, long discussions with Mobil Oil engineers led me to a few personal conclusions. The first was that no oil shortage ever existed. The second is that the cost for recovery, transportation and refining of oil is comparatively low. The third is that oil and natural gas is probably not biological in origin. All of the planets in the solar system contain huge quantities of hydrocarbons Why is it that Earth's hydrocarbons were produced by life, and on other planets, the stunning quantities of Hydrocarbons are just the building blocks of the solar system?

While the production cost numbers seem huge, the quantity of oil produced is absolutely stunning. The USA is currently producing 12 million barrels per day! At a general cost of about $30 per bbl, despite claims to the contrary. We've refined fracking technology to the point where it is cost effective beyond our initial expectations of $50 per bbl.

Except development cost is also tied to oil price and inflation - some contracts are “survival rates” (loans) but running out … so if a year from now when oil drops - the cost to break even will be much higher …
What‘s the source of your $30 ? … not horizontal and fracked ?

BTW: Betting a discovery in 3000m of water might have to sit it out a cycle …

 

[Cujet]

Isn't the bulk of hydrocarbons found on other planets and moons Methane? What about the other 11 hydrocarbons? How much of each of those is found in our solar system?

You bet, it's "Natural Gas". Interestingly, the working theory was that hydrocarbons such as natural gas, can with time, heat and pressure, be converted into all manner of hydrocarbons. At least, that's what the engineers would claim.

There is no question that deepwater oil recovery is very expensive. The Macondo Well (deepwater horizon) was something like 35,000 feet below the ocean floor. And maybe of interest, the Bertha Rogers well is about 31,000 feet deep where they encountered 28,000 PSI and liquid sulfur. Way below where any life ever existed.

But it's good to keep in mind that not all offshore rigs are "deepwater" and uber-expensive rigs. Many are in shallow water.

 

[Zee09]

My heating oil is contracted at a max of $3.20 a gallon
My propane I just prebought for $1.31 a gallon from fear of going to the moon
Gas prices- well we all know about those.
My electric I have a deal on.
That said times like these, and all of the background nonsense makes me conserve even more. (I always conserve anyway)
I also lose interest in traveling and cars.

I can easily afford all I have and do but in times like these I shut off the switch.
I don't like what is going on and we can't get into it in depth here, but I am shutting off the $$$ spigot here.
I don't think I am alone.

At nights here on a busy road through MD. where I live you can hear a pin drop. People get home from work like in the 70's
and don't go anywhere unless they have to. thermostats are dialed back and so are the house lights.

 

[OVERKILL]

In years past, long discussions with Mobil Oil engineers led me to a few personal conclusions. The first was that no oil shortage ever existed. The second is that the cost for recovery, transportation and refining of oil is comparatively low. The third is that oil and natural gas is probably not biological in origin. All of the planets in the solar system contain huge quantities of hydrocarbons Why is it that Earth's hydrocarbons were produced by life, and on other planets, the stunning quantities of Hydrocarbons are just the building blocks of the solar system?

While the production cost numbers seem huge, the quantity of oil produced is absolutely stunning. The USA is currently producing 12 million barrels per day! At a general cost of about $30 per bbl, despite claims to the contrary. We've refined fracking technology to the point where it is cost effective beyond our initial expectations of $50 per bbl.

We know with coal that it is definitely of biological origin, that's why we find trees and plants in it.

 

[Cujet]

We know with coal that it is definitely of biological origin, that's why we find trees and plants in it.

Yes!

Coal is most often found at 50 to 300 feet depth. With a few outliers at 1000 feet or more.

Shallow oil is about 3000 feet, today's wells average more than 6000 feet. What I find fascinating is that many of those older shallow wells tend to refill over time, probably from much deeper sources. The engineers from Mobil used to state that "Shell" oil simply meant that the old shallow shell beds were convenient reservoirs for crude. Not that it originated there. Right or wrong, that's been my belief since flying the world with oil engineers and executives.

 

[PandaBear]

Update- some traders are now predicting $200 a barrel this month. Many including me though the $120 a barrel was not going to be seen. Can't discount the $200 a barrel prediction.

Oil traders eye $200 per barrel this month: report

Oil traders believe the ongoing Russian-Ukraine war and its international fallout could drive up prices this month, with some optimistic traders eyeing a price over $200 per barrel.

www.foxbusiness.com

Last time it reaches $5/gal in 08 or was it 09 it started a collapse. If it reaches $200 this time there'll be a lot of investment in fuel economy / EV as well as many weird tech.

Algae? Cellulose ethanol? biogas? or some sort of drone delivery vehicle running around at night dropping packages off? Driverless truck on the road going 50mph with at least 1000 ft away from another human driver? Geothermal HVAC with a 5000 gal tank to hold heat from solar then pump around the house at night? Ice based AC to shift electricity use to off peak?

 

[K.Aoi]

I get 50mpg on my motor cycle,,,but I cant buy groceries with it,,,lol

Sure you can, people in other countries do it all the time, you just need to outfit it correctly. And instead of going grocery shopping once a week or once every other week, make smaller more frequent trips

 

[K.Aoi]

Also, worth noting that $4 in 2008 money is $5.22 today, so we're actually still about a dollar away from an adjusted for inflation requivalent to 2008. Unfortunately pay hasn't kept up so it hurts people more now than it would have in 2008.

 

[PandaBear]

Sure you can, people in other countries do it all the time, you just need to outfit it correctly. And instead of going grocery shopping once a week or once every other week, make smaller more frequent trips

What can be bought online vs in-store has changed a lot recently. While I wouldn't say you can scooter around US style grocery shopping trip yet, you can certainly order a lot of things to be delivered home and you no longer need a full size SUV to do a weekly costco trip to "save money". The stores save money on real estate even after providing free shipping (Walmart, Target, Amazon), it is a win-win.

I don't get paying for a full size SUV so you can shop once a week at Costco to "save money", vs getting a Corolla and shop at Safeway every 3 days.

Then again, I'm the kind of person who would not pack a stroller when driving to Disneyland, but would "rent" one at the destination for $60/2 days after I checked into the hotel and unload all my luggage. I saved enough fuel on the trip to pay for the stroller rental and I saved way more in gas and the vehicle purchase (hybrid van instead of a full size SUV) as well.

 

[Cujet]

Also, worth noting that $4 in 2008 money is $5.22 today, so we're actually still about a dollar away from an adjusted for inflation equivalent to 2008. Unfortunately pay hasn't kept up so it hurts people more now than it would have in 2008.

And that's the rub. I've not had a raise in 12 years! It's clear as day that my purchasing power is significantly reduced.

 

[Kjmack]

The people shouldn't have to bow to the unchosen few

 

[FZ1]

""Gas prices have surged to a seven-year high of $3.40 a gallon nationally and are flirting with $4 in Nevada, Washington State and Oregon.
Bank of America is now predicting that Brent crude oil, which drives gas prices, will zoom to $120 a barrel by June 2022. That's 45% higher than current levels.""

Might be a time for people with trucks and long commutes to start looking for a 4 cylinder beater daily driver....

Gas prices are sky high and Bank of America warns $120-a-barrel oil is on the way

Everyday Americans are getting hammered by high prices at the pump, and Bank of America thinks the pain may just be getting started.

www.cnn.com

We gotta order everything online from Walmart for free home delivery (over $35) and minimize casual driving trips until our energy production sector is allowed to produce and/or pipe in more Canadian oil.

 

[K.Aoi]

We gotta order everything online from Walmart for free home delivery (over $35) and minimize casual driving trips until our energy production sector is allowed to produce and/or pipe in more Canadian oil.

False- Oil companies have plenty of land they haven't tapped yet without lifting any federal land drilling bans. The reasons they are not producing more is as follows.

1. Financial sector and investors do not want them to "drill baby drill" They want them to use the money they would spend on drilling new wells to buy back stock and issue more dividends. High oil prices makes oil company investors very very happy so they aren't going to be in a hurry to get oil prices down. 10, more years ago yeah they would be drilling new wells everywhere they could. Today companies are using far more discipline and not pouring capex into new wells.

2. The oil industry is facing the same manpower and equipment shortgage every other industry is. A quote from someone in the industry "it's not that people and equipment are available at a premium, they just aren't available at all". So even if/when they want to drill more it could be a struggle to find roughnecks and support staff and equipment.


Never believe the nonsense that they need more federal land to drill- they own vast reserves that they haven't even touched yet. Also, in the same vein, even if the Keystone XL had gone forward (let's avoid the topic beyond this particular important part) it wouldn't have been in operation until at LEAST 2025, it wouldn't be able to help with the current price situation at all. There's just not much that can be done short-term by US/Canadian oil producers even if the investors were interested in drilling more wells. And also the refineries that are set up to receive "sweet" crude oil in the gulf aren't able to process the heavier stuff from the oil sands for instance. That would require a lengthy outage and lots of money in retrofits to the refineries. We really have no choice short-term but to ask countries that have unused pumping capacity to increase output. Who are, for the same reason that American oil companies are reluctant to pump more- financially incentivized to keep prices high.

 

[TheLastWord]

Pushing lock territory

 

[K.Aoi]

Pushing lock territory

The whole thread is in general, maybe it can be kept civil but who knows at this point. Even as someone who wants to decrease our reliance on fossil fuels and move toward renewable/nuclear energy and EVs medium-long term, I wish we could produce more domestic oil instead of relying on countries with "questionable" (to be polite) ethics and business practices. Some few people may think high gas prices are good, I don't- it hurts low/middle income people and families the most.

 

[Zee09]

False- Oil companies have plenty of land they haven't tapped yet without lifting any federal land drilling bans. The reasons they are not producing more is as follows.

1. Financial sector and investors do not want them to "drill baby drill" They want them to use the money they would spend on drilling new wells to buy back stock and issue more dividends. High oil prices makes oil company investors very very happy so they aren't going to be in a hurry to get oil prices down. 10, more years ago yeah they would be drilling new wells everywhere they could. Today companies are using far more discipline and not pouring capex into new wells.

2. The oil industry is facing the same manpower and equipment shortgage every other industry is. A quote from someone in the industry "it's not that people and equipment are available at a premium, they just aren't available at all". So even if/when they want to drill more it could be a struggle to find roughnecks and support staff and equipment.


Never believe the nonsense that they need more federal land to drill- they own vast reserves that they haven't even touched yet. Also, in the same vein, even if the Keystone XL had gone forward (let's avoid the topic beyond this particular important part) it wouldn't have been in operation until at LEAST 2025, it wouldn't be able to help with the current price situation at all. There's just not much that can be done short-term by US/Canadian oil producers even if the investors were interested in drilling more wells. And also the refineries that are set up to receive "sweet" crude oil in the gulf aren't able to process the heavier stuff from the oil sands for instance. That would require a lengthy outage and lots of money in retrofits to the refineries. We really have no choice short-term but to ask countries that have unused pumping capacity to increase output. Who are, for the same reason that American oil companies are reluctant to pump more- financially incentivized to keep prices high.

I heard this same exact spiel on ABC last night.

 

[K.Aoi]

I heard this same exact spiel on ABC last night.

You can find it just about anywhere, because that's the reality of the situation. This isn't even new, this situation has been brewing since the middle/end of 2020, and people have been saying the same thing since then. demand rising faster than expected but oil companies and OPEC+ not wanting to drill to keep prices high, and exercise capital discipline. It's gotten even more extreme because of the Ukraine crisis, and it has investors spooked about supply (though secretly they're happy about the fat profits lining their pockets).

 

[Zee09]

Diesel hit $6 this morning in Mt. Aetna, PA. Was talking to a machinery dealer just now.

 

[K.Aoi]

Diesel hit $6 this morning in Mt. Aetna. Was talking to a machinery dealer just now.

Regular 87 still around $4.50 here, diesel is over $5 at most stations now though.

 

[FZ1]

False- Oil companies have plenty of land they haven't tapped yet without lifting any federal land drilling bans. The reasons they are not producing more is as follows.

1. Financial sector and investors do not want them to "drill baby drill" They want them to use the money they would spend on drilling new wells to buy back stock and issue more dividends. High oil prices makes oil company investors very very happy so they aren't going to be in a hurry to get oil prices down. 10, more years ago yeah they would be drilling new wells everywhere they could.

2. The oil industry is facing the same manpower and equipment shortgage every other industry is. A quote from someone in the industry "it's not that people and equipment are available at a premium, they just aren't available at all". So even if/when they want to drill more it could be a struggle to find roughnecks and support staff and equipment.


Never believe the nonsense that they need more federal land to drill- they own vast reserves that they haven't even touched yet. Also, in the same vein, even if the Keystone XL had gone forward (let's avoid the topic beyond this particular important part) it wouldn't have been in operation until at LEAST 2025, it wouldn't be able to help with the current price situation at all. There's just not much that can be done short-term by US/Canadian oil producers even if the investors were interested in drilling more wells. And also the refineries that are set up to receive "sweet" crude oil in the gulf aren't able to process the heavier stuff from the oil sands for instance. That would require a lengthy outage and lots of money in retrofits to the refineries. We really have no choice short-term but to ask countries that have unused pumping capacity to increase output. Who are, for the same reason that American oil companies are reluctant to pump more- financially incentivized to keep prices high.

Can't agree with your response. We are pumping less oil than we were at our previous, recent, peak and oil production is being discouraged. The pipeline to which you refer needs to continue being constructed, to completion, for financial, gasoline cost reduction, and other reasons. Lotsa pipeline workers out of 100k year jobs.