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This is a short article that demonstrates the complexity of the oil markets.
OPEC is not helping offset this while India and Turkey (et al) take advantage of it----I hope we remember that.
But---at the same time our own producers aren't falling all over themselves to ramp up production :nono:
Quote:
Originally Posted by Dave Grubb
Thats the part I don't understand. There is demand.
My guess is that it is a cash flow consideration. They will produce what they can with the existing staffing but avoid adding costs to bring idle wells on line that increase operating costs.
The thought of drilling new wells is even worse----they have a huge negative cash flow until they are fully on line and operational---with no certainty that the price will stay were it is.
Yes, I listened to my Dad when he spoke of his lifetime in the oil industry...It takes a steady market and reliable demand before drillers will commit their crews and equipment to exploration...The ups and downs of the industry in recent decades added to a generally unfavorable political climate for them are the reasons for the low rig counts...Add that to unstable and volatile governments in places where oil is known to be, and you'll see why it's safer to go for the little bucks instead of taking the risk for more...Quote:
Originally Posted by Dave Grubb
It's easier to lose billions than it is gain billions in the oil industry today...:gush:...Ben
A perfect example of this "perfect storm" is what happened in the NG business. They were falling over themselves drilling new wells and adding new leases----and then the market flooded and the gas price took a major chit. The wells right at the cottage, which followed our first wells by a little over a year, never even finished. That pad was designed and permitted for 6 wells, they finished drilling three and a half! They eventually brought the three on line and then after a few months shut them down. Until recently they have produced only what they needed to service the loans and fulfill contracts. Now they are cautiously ramping up production with a price that is 5X what it was a year and half ago.
I cannot avoid mentioning how much our "good friends" the Saudis aren't picking up any slack-----it seems they are more concerned with helping their OPEC partner Russia out of a sticky wicket.
I'm sure young mr kushner will lean on them a bit for the "mother land" :rolleyes2:
And at the same time becoming the world's most valuable business entity...:cigar:...BenQuote:
Originally Posted by Dave Grubb
https://www.youtube.com/watch?v=aJHJ...b_channel=WION