Agreed but.... In this case with oil stuck at $50-55 for a long period the increase in supply appears to be coming from increasing efficiency of the remaining shale producers. This is putting a real crimp in OPEC's output cut strategy to support higher prices. They are really "stuck" and I couldn't be happier. We are in a really good place at the moment. We are domestically pumping as much as the Saudis and we have 500+ million barrels in above ground storage besides! Lordy. As Craig Ferguson used to say, "it's a great day in America everybody".
"No peak oil for America or the world' -Forbes
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Of course you're right.
OPEC has rarely been effective in controlling prices through output restraints in any event.
Too much incentive for the poorer members to cheat on their agreed quotas.
The only means of enforcing quotas was for the Saudis to punish every other member by subjecting them to a bloodbath of declining prices through increased Saudi production that drove prices down to a level at which only the Saudis could make money.
The last time this happened was in the late nineties AFAIK.
Renewed levels of American production must be quite vexing to OPEC's various members.
One feels a bit of schadenfreude toward these nations, most of whom aren't exactly our friends, including the Kingdom of Saudi Arabia, not to mention either Russia or Venezuela.
OPEC has rarely been effective in controlling prices through output restraints in any event.
Too much incentive for the poorer members to cheat on their agreed quotas.
The only means of enforcing quotas was for the Saudis to punish every other member by subjecting them to a bloodbath of declining prices through increased Saudi production that drove prices down to a level at which only the Saudis could make money.
The last time this happened was in the late nineties AFAIK.
Renewed levels of American production must be quite vexing to OPEC's various members.
One feels a bit of schadenfreude toward these nations, most of whom aren't exactly our friends, including the Kingdom of Saudi Arabia, not to mention either Russia or Venezuela.
Read "Saudis lose US clout over oil price war".
Once the US overtook Saudi Arabia as the #1 oil producer (thanks to North Dakota), Saudis went nuts and drove prices down, against all past OPEC modus operandi.
Fast forward two years later and it backfired on them, big time. OPEC countries don't obey Saudis any longer, in fact they lost all respect. Saudis are burning through their cash reserves and can't sustain welfare programs for their unproductive society.
Peak oil was correct about "proven" oil reserves getting depleted faster than new ones discovered. It's just that since the "peak oil" theory was written, engineers and scientists have found new unconventional ways to extract crude oil from the ground that were unknown back then.
The proverbial can has been kicked down further down the road, and it will again be kicked further with each new oil extraction breakthrough.
Once the US overtook Saudi Arabia as the #1 oil producer (thanks to North Dakota), Saudis went nuts and drove prices down, against all past OPEC modus operandi.
Fast forward two years later and it backfired on them, big time. OPEC countries don't obey Saudis any longer, in fact they lost all respect. Saudis are burning through their cash reserves and can't sustain welfare programs for their unproductive society.
Peak oil was correct about "proven" oil reserves getting depleted faster than new ones discovered. It's just that since the "peak oil" theory was written, engineers and scientists have found new unconventional ways to extract crude oil from the ground that were unknown back then.
The proverbial can has been kicked down further down the road, and it will again be kicked further with each new oil extraction breakthrough.
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Originally Posted By: DrRoughneck
Once the US overtook Saudi Arabia as the #1 oil producer (thanks to North Dakota), Saudis went nuts and drove prices down, against all past OPEC modus operandi.
It's important to note that the price went down not due to any secret manipulation of the price but due to oversupply compared to demand.
Once the US overtook Saudi Arabia as the #1 oil producer (thanks to North Dakota), Saudis went nuts and drove prices down, against all past OPEC modus operandi.
It's important to note that the price went down not due to any secret manipulation of the price but due to oversupply compared to demand.
Not oversupply compared with demand, but rather the market cleared at a lower price due to the available supply versus demand.
Markets always clear and the supply/demand curve shows the price at which this happens.
The Saudis may have increased production in an effort to kill off American frackers. This worked, but those fracked fields can quickly return to production with any increase in crude prices, so the Saudis bought themselves nothing at all.
Markets always clear and the supply/demand curve shows the price at which this happens.
The Saudis may have increased production in an effort to kill off American frackers. This worked, but those fracked fields can quickly return to production with any increase in crude prices, so the Saudis bought themselves nothing at all.
Originally Posted By: DrRoughneck
Saudis are burning through their cash reserves and can't sustain welfare programs for their unproductive society.
And you think they would have changed by now?
I hear the CRAZIEST stories...
Originally Posted By: fdcg27
The Saudis may have increased production in an effort to kill off American frackers. This worked, but those fracked fields can quickly return to production with any increase in crude prices, so the Saudis bought themselves nothing at all.
Absolutely. It's so easy to just open a valve again...
Saudis are burning through their cash reserves and can't sustain welfare programs for their unproductive society.
And you think they would have changed by now?
I hear the CRAZIEST stories...
Originally Posted By: fdcg27
The Saudis may have increased production in an effort to kill off American frackers. This worked, but those fracked fields can quickly return to production with any increase in crude prices, so the Saudis bought themselves nothing at all.
Absolutely. It's so easy to just open a valve again...
There is a terrific article/graphic/animation up on Bloomberg detailing how the latest surge in US production is taking place. American producers are getting ever more effective/efficient at horizontal drilling and production.
https://www.bloomberg.com/graphics/2017-oil-rigs/
https://www.bloomberg.com/graphics/2017-oil-rigs/
Originally Posted By: DrRoughneck
Peak oil was correct about "proven" oil reserves getting depleted faster than new ones discovered. It's just that since the "peak oil" theory was written, engineers and scientists have found new unconventional ways to extract crude oil from the ground that were unknown back then.
you know this is funny to me. When I studied geology in college in the 1970's, we knew then that we had at least 2X "proven reserves" in shale oil in the ground. We also know that plotting Pangea's parts vs current locations indicates where oil will be found.
The northern tier is Russia, Canada, (prolly Greenland once the ice is gone...), the North Sea, etc. How much of that is yet unexplored?
The sub-tropical band includes the desert nations, Mexico, some S American nations, and ... Off-shore fields not even looked for yet.
The tropical band includes Venezuela, Columbia, the Pacific Island Nations, the South China Sea, some African Nations, etc.
Now, we know there is a bunch of coal in Australia and New Zealand. We have not found that oil - yet. And all bets are on that there is oil under the Antarctic Ice Cap.
Is there any place where oil is not ...
It's just about figuring how to get at it in a cost effective manner ...
The other problem is when all the carbon was free in the atmosphere, the world was MUCH hotter than it is today. It was almost universally tropical ...
Peak oil was correct about "proven" oil reserves getting depleted faster than new ones discovered. It's just that since the "peak oil" theory was written, engineers and scientists have found new unconventional ways to extract crude oil from the ground that were unknown back then.
you know this is funny to me. When I studied geology in college in the 1970's, we knew then that we had at least 2X "proven reserves" in shale oil in the ground. We also know that plotting Pangea's parts vs current locations indicates where oil will be found.
The northern tier is Russia, Canada, (prolly Greenland once the ice is gone...), the North Sea, etc. How much of that is yet unexplored?
The sub-tropical band includes the desert nations, Mexico, some S American nations, and ... Off-shore fields not even looked for yet.
The tropical band includes Venezuela, Columbia, the Pacific Island Nations, the South China Sea, some African Nations, etc.
Now, we know there is a bunch of coal in Australia and New Zealand. We have not found that oil - yet. And all bets are on that there is oil under the Antarctic Ice Cap.
Is there any place where oil is not ...
It's just about figuring how to get at it in a cost effective manner ...
The other problem is when all the carbon was free in the atmosphere, the world was MUCH hotter than it is today. It was almost universally tropical ...
Originally Posted By: Pop_Rivit
Originally Posted By: HerrStig
Are we going to let OPEC kick us around?
Fortunately we've gotten smarter over the years. Only (approx) 13% of our oil comes from the Persian Gulf. We get more from Canada and Latin America than we do from the middle east, and we get (approx) 40% of our oil from right here in the US.
OPEC still has enough clout to manipulate prices, and if we're not smart we'll end up right back where we were in the 1970s when they had us in a stranglehold.
You will never get back there. Canada can produce enough oil to fill the gap. Canadian oil production in the 70's was a fraction of the potential that it is today. It is also ethical oil from a democracy that pays its workers well and is a friend to the US. And, despite what the Hollywood gang says about the "tar sands", it is environmentally responsibly produced. Alberta has a carbon tax that is charged by the ton of CO2 produced to make each barrel of oil consumed by Albertans or mined by the oil industry. Just like Europe and unlike most of the US. But, I doubt anyone in Hollywood knows or cares.
Originally Posted By: HerrStig
Are we going to let OPEC kick us around?
Fortunately we've gotten smarter over the years. Only (approx) 13% of our oil comes from the Persian Gulf. We get more from Canada and Latin America than we do from the middle east, and we get (approx) 40% of our oil from right here in the US.
OPEC still has enough clout to manipulate prices, and if we're not smart we'll end up right back where we were in the 1970s when they had us in a stranglehold.
You will never get back there. Canada can produce enough oil to fill the gap. Canadian oil production in the 70's was a fraction of the potential that it is today. It is also ethical oil from a democracy that pays its workers well and is a friend to the US. And, despite what the Hollywood gang says about the "tar sands", it is environmentally responsibly produced. Alberta has a carbon tax that is charged by the ton of CO2 produced to make each barrel of oil consumed by Albertans or mined by the oil industry. Just like Europe and unlike most of the US. But, I doubt anyone in Hollywood knows or cares.
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