225 thoughts to “Open Thread Petroleum, December 6, 2018”

    2. “Put your bets and forecasts, who of the 3 biggest producers will blink first and drop production:US, Russia or KSA?”

      Canada: Already started.

      FWIW: Not sure any cuts will have much of a impact in prices. With the trade wars, boomer retirement, lack of QE Central bank stimulus, Oil demand growth will continue to stall. Perhaps global demand will actually begin to fall in 2019. So far in the Second half of 2018, Home & auto sales have dropped, likely triggered by rising interest rates. It would be interesting if demand falls slightly faster than production declines (Presuming Ron’s estimate of a peak in 2019 is correct), causing Oil prices to remain flat or to decline for quite some time. Of course a lack of demand growth could also cause an artificial peak.

      That said eventually the USA will restart QE and stop raising interest rates & depletion will resulting in higher oil prices.

      2019 should be an interesting year: Stalled global economy, Gridlock in Washington, Perhaps investors will stop pouring capital into Shale Drillers, Possible US or global recession, more trade wars, increase military spending (aka Military Keynesium). Breakdown in the EU (Sweden: no gov’t in place for past 6 months, Demark kicking out refugees, Mass riots\strikes in France, Italy’s debt bomb, Brexit, Russia), falling real estate prices (EU, Austrialia, US, Canada). China’s economy seems to be slowly becoming unglued as decades of problems has simply grown to the point they are become unmanageable.

      Will 2019 be the year when the global economy begins to unravel or will TPTB able to kick the can once again?

    1. Great article, thanks.
      Author says US LTO will be done by 2040, which makes sense.
      The speed and acceleration of sinking oil production is critical since we have not been strongly pursuing alternatives. If the production is down 50 percent by 2030 to 2035 it’s going to be a tough go. If it falls faster then we are in severe trouble.

      1. Gone Fishing,

        Jean Laherrere knows a lot, but on LTO I think he may be wrong.
        From the piece linked above:
        The best approach for forecasting future production is the extrapolation of past production (called Hubbert linearization). For Eagle Ford the trend can be extrapolated toward an ultimate quantity of 3 Gb.

        The USGS estimates about a 12.5 Gb mean for the TRR of the Eagle Ford, when economics is considered the URR might be reduced to 10Gb under a reasonable oil price scenario (AEO 2018 reference oil price scenario).

        Recent USGS estimates for the Permian Delaware Basin have lead to a revision of my US tight oil estimate to a mean of 74 Gb with peak probably in 2025 to 2030. Decline will be relatively steep from 2030 to 2040, if the USGS estimates for the US tight oil resource prove correct.

        1. The big question is will there even be a need for LTO in 2035? Will it even be worth going after in 2030? Not really a profit maker and the advanced EVs could be reducing demand by over 50 million barrels a day by 2035 if pursued as they are today.
          Price is somewhat dependent upon demand and demand is supposed to fall off with time. LTO is very price sensitive and will get more expensive as it gets away from the best areas. Electric vehicles and electric production will probably get cheaper with time.
          Maybe ICE’s will double in mpg and run right up until 2040, but it’s a game of diminishing returns and diminishing performance. How long will the public and the banks keep subsidizing LTO?

          1. GoneFishing Wrote:
            “Maybe ICE’s will double in mpg and run right up until 2040, but it’s a game of diminishing returns and diminishing performance. How long will the public and the banks keep subsidizing LTO?”

            Very unlikely. At this point the entire working class uses loans to buy vehicles & the loan durations keep going up. Most new auto loans are 84 months (7 years). Basically new cars are becoming unaffordable.

            Seems likely to me the global debt problem will come home to roost in some time during the 2020. Boomers are retiring and are starting to draw down on unfunded\underfund entitlements & pensions. My guess is that future car sales will be a fraction of current sales, and most people will drive less and keep there older vehicles.

            GoneFishing Wrote:
            “Electric vehicles and electric production will probably get cheaper with time.”

            But still remain largely unaffordable to the working class, and likely to remain that indefinitely. Wages are flat, but the living costs continue to increase: Food, property taxes or rent, healthcare, interest rates, durable goods. Average healthcare costs for single family is now about $11.6K (or about 20% of their income). My guess is that vehicle use will revert to the 1950’s when family owned a single vehicle due to lack of income, &rising living costs.

            If this is the case, that its possible oil prices will remain flat or declining until production problems from depletion overtake demand destruction. Consider that boomers are retiring & driving less. More information workers are working from home or traveling less for work. Consumerism is declining (ie widespread mall failures) as people are saving more for retirement, and more of their income is used for living costs.

            . Also the USA grid cannot handle a large number of vehicles on the grid, especially during summer demand.

            Shale continues to be a money losing operation, as it has been since day one. Sooner or later investors will stop pouring money into Shale and it will collapse. I think most of the money coming in is from pension plans gambling retirement savings, buying into the illusion of saver higher yields. Most Money managers earnings come from paper projects. ie buy a 20 year bond that has a yield of 8% or higher. Most of the manager likely know these companies will go bust before the loan is ever paid off (or perhaps ever paid down). but they don’t care since they collect there bonuses when the bond purchase happens, not when its paid off. Its easy to make risky bets with OPM (Other People’s Money).

            1. Uh,Huh. Sure. Until the Chinese flood the market with cheap vehicles. You do know GM made more cars in China last year than they did in the US, right?
              Car manufacturers will not allow themselves to be run out of the market. At least most won’t.
              Average car loan is 69 months and average car on the road is 11.5 years old meaning they are lasting up to 20 years now.
              EV’s will last longer with less maintenance and therefor will not be as much of a liability. Batteries will fall to half their current price.
              So for $25,000 you get a decent EV, with a loan of $300 a month or less. It lasts a long time and could last 30 years with one battery change or repair. That’s five cents a mile for the car itself and three cents a mile or less for the “fuel”.
              Compare that to a $25000 ICE, which at best does 10 cents a mile for the car and 10 cents a mile for the fuel. Plus the maintenance cost is much higher if one wants to get to that 250,000 mile mark that ends most ICE’s (at best).

              Tesla now has a motor that has tested to over 1 million miles without failure.

              Then there is the probable switch to cars as a service in cities and urban areas. Many people will not own a car, but fleets will own them.

              So basically, unless one buys a top end car, the savings in fuel and maintenance will cover the cost of the EV compared to a similar ICE. Not even considering the proposed carbon taxes.

              Happy motoring.

            2. GoneFishing Wrote:
              “Average car loan is 69 months and average car on the road is 11.5 years old meaning they are lasting up to 20 years now.”

              Average *includes* older loans. Most *new* loans (made this year) are 72 to 84 months. Average does not reflect recent loans. Also consumers are also interested in even longer term auto loans 96 mo & even 120 mo loans

              https://trends.google.com/trends/explore?q=96%20month%20auto%20loan&geo=US

              GoneFishing Wrote:
              “So basically, unless one buys a top end car, the savings in fuel and maintenance will cover the cost of the EV compared to a similar ICE. Not even considering the proposed carbon taxes.”

              Nope. If they cannot afford low cost vehicles, they aren’t going to afford top end cars. A person making $50K a year, paying a mortgage, property taxes (or renting) and paying for healthcare isn’t going to be able to afford a Tesla or even a lower cost $35K to $40K EV. Already vehicle sales have practically fallen off a cliff do to small changes in interest rates. People are broke and are hanging on using dirty cheap & easy credit. When the system takes the easy credit away, the economic falls off the cliff.

              BTW, France is in a all out revolt over higher fuel taxes.

              GoneFishing Wrote:
              “Until the Chinese flood the market with cheap vehicles. You do know GM made more cars in China last year than they did in the US, right?”

              What you fail to understand is all those cars are all sold to Asian Consumers. They are not sold\imported into the US. Also EV sales make up about 2% of total car sales in Asia. Only a tiny number of consumers buy EV, despite the considerable higher energy costs compared to the USA.

              No way China is going to flood the US or EU market with cheap Chinese cars. US & EU both have tariffs on Imports. USA is also likely going to impose tariffs on EU made vehicles too.

              Trump is moving the USA to the EU model by matching EU corporate tax rates, and introducing a VAT (which are tariffs). The tariffs will become permanent. This was something Obama was trying to do, but was unable. I presume that when the DNC takes control in 2021, that the tariff\VAT will remain since it alternative means to cap consumption and fund gov’t spending especially as outlays for entitlements & pensions soar.

              GoneFishing Wrote:
              “Batteries will fall to half their current price.”

              That’s a wild-ass guess and does not fit with the trend. The Moore’s law for battery is about 18 years for batteries to reduce in price or double capacity. There is an intrinsic problem with batteries, that the chemical reaction to release\charge energy is a reaction with the electrodes. As long as the reaction occurs with the electrodes batteries will always have limited charging cycles. Unless completely new battery tech is developed Battery improvements will follow the current trend. It will be another 18 years before either price is half or capacity is doubled. By then the debt & demographics problem will crush the global economy. Global Debt is about to top $260 Trillion soon, and it’s going to balloon as the pension & entitlement crisis hits hard in the 2020’s.

              In addition Most of the grid power still comes from fossil fuels: NatGas and Coal About 70%. 20% comes from nuclear, which is slowly being replaced by NatGas. All this is just re-arranging the deck chairs on the Titanic.

              My guess is that in about 10 years the EV will completely collapse & vanish. I think once the current generation of EV cars fail to meet consumer expectations and rising living costs, will kill it for good.

              Really who is going to buy them? Boomers are retiring and will just stick with their Old ICE. Most retirees living on fixed income (especially in a low interest rate economy) stay home and only venture out for groceries & Doctor offices. Millennials Lean to car services like Lyft and Uber and Gen-X is struggling to met ends & is a small generation.

              GM ditched the Volt this year and Tesla Cash burn is so high that its unlikely to survive more than a couple of years.

              I think vehicle ownership will also Decline (people reverting to single car per families or using rideshare services) People will simple travel\commute less and there will be no desire to squeeze out efficiency. If your only consuming a gallon of fuel a week there is no point an EV.

              We’ll also see people living more like they did in the 19th century when multiple generations live in the same home. This is already starts as Millennials already are remaining with their parents well after the complete school or college.

              FWIW: Most of businesses I work at workers commute a lot less. Most work home half the week. IT technology has improved so much that it make traditional office space obsolete (thus reducing the need to commute). Sales men no longer have to get on a plane to pitch a proposal They now do it using WebEx\Goto meeting.

              I think as property taxes go up, companies will ditch offices and let workers work from home. Even Retail space is going away as brick & mortar retail stores are replaced by online shopping. This reducing the number of people working in retail. Companies will ditch most of their retail stores saving billions in property taxes\labor\energy costs. Retail space will follow Video rental business model (notice there are no more video rental brick & mortar – Its all online).

              BTW: I have some retail space I am trying to sell, are you interested?

            3. Wow, I am glad you have it all figured out and all known trends will reverse soon.
              It would be just like people to stay with inefficient, heavily polluting, complex and expensive systems just so they can move backwards to the 1950s in their minds. So comforting unless one actually was there.

              “Those who say it can’t be done are usually interrupted by those actually doing it.” Joel Barker

            4. Your assertion that battery prices half every 18 years is total BS.
              BNEF lithium ion battery survey showed price dropped to 1/4 from 2010 to 2016. Since then they have fallen even further.
              Clean Technica just said the 100 dollar/kWh battery will be produced in 2020. So from $1000/ kWh to $100 in 10 years.
              Tesla is already below $190 at the pack level.
              You could not be more wrong in your assertions.

            5. Lithium Ion batteries were invented in the early 1990s. While improvements have been made, its been more than 18 years.

              https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=13&cad=rja&uact=8&ved=2ahUKEwie1aCG-5PfAhUFyFkKHW1VBoYQFjAMegQIAhAB&url=https%3A%2F%2Fwww.forbes.com%2Fsites%2Fmikemontgomery%2F2018%2F01%2F11%2Fget-ready-for-the-battery-revolution%2F&usg=AOvVaw06F2gtcDZQqzjq62kBlRzX
              “The equivalent of Moore’s law for batteries is that they improve about 3% every year”

              GoneFishing Wrote:
              “Clean Technica just said the 100 dollar/kWh battery will be produced in 2020”

              In 2004, Businesses claimed Fuel cells would be powering most mobile devices in about 2 years. Its been 12 years and no fuel cells. Most of these announcements are vaporware to get investors to buy their stocks. Realistically it better to look at the histortic data to get a sense of how technology trends over the long term.

              Believe whatever you want and what people tell you to believe. 600 years ago everyone believed the world was flat the earth was the center of the universe. If you blindly follow the hype your no better than those that believe the earth was flat.

              GoneFishing Wrote:
              “Tesla is already below $190 at the pack level.”

              Tesla loses thousands on each vehicle sold. Sooner or later Tesla will run out of OPM and go bankrupt.

              https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=13&cad=rja&uact=8&ved=2ahUKEwjV1rfS-pPfAhUFwFkKHbS7AQYQFjAMegQIBxAB&url=https%3A%2F%2Fwww.wired.com%2Fstory%2Ftesla-q2-2018-earnings-call%2F&usg=AOvVaw236p_8zWD6nwhlGALnTN4W

              “Aug 1, 2018 – Tesla Loses More Money Than Ever, but Says Profits Are Coming. Today, though, Tesla released its financial statements for the same quarter, and revealed the biggest loss in the company’s history: $717 million.”

              For a company to remain in business for the long term, it has to generate a profit or at least break even. Tesla has never earned a profit. It survives by coning investors to pour money into it.

            6. So you agree that the cost per kWh has improved dramatically since 201o. Good.
              At least some sense came through.

            8. I agree that it’s less important that we have lots of EVs than it is to reduce petroleum consumption. Having people driving their ICE vehicles significantly less than they do now addresses the issue whether or not they have EVs as a replacement.

            9. Really it does not matter how much fossil fuel consumption changes. The Debt & demographics problems are the Whales in the room. There is no way any industrialize nation can pay its debts. Sooner or later Debt Judgment day is going to arrive.

              I think the 2020’s will be the decade that breaks the global economy. Too much debt and a lack of skilled workforce to replace retiring boomers.

              Odds are that there will be another global war. You can see the war drums beat every day, as Nuclear treaties are ended (bye-bye INF for example), US/China/Russia/India/Iran/KSA/EU are all increasing defense spending. Trade wars have a habit of turning into Hot wars.

              I don’t know why anyone can’t see to see this coming. Perhaps its just easier to bury one’s head in the sand.

            10. People can default. It will be disruptive but the system can eat the debt if necessary.

              Resource depletion is a real problem.

              As for wars, it might be good to as a way to funnel money to military contractors and to eliminate millions of people, but otherwise what would be the purpose? Why would China or Russia bother to invade us if it can manipulate our country remotely by controlling our financial, communication, transportation, and energy systems? Do they real want to send military forces to occupy the US?

              The US military may still think in terms of fighting traditional wars, but it’s likely an unnecessary waste of resources? Have our wars accomplished anything of value since WWII?

              And besides, why should other countries invade us if they can trigger a civil war where we kill each other?

            11. I wasn’t able to edit the first post, but I was able to put up this one with a few minor changes.

              People can default. It will be disruptive but the system can eat the debt if necessary.

              Resource depletion is a real problem.

              As for wars, it might be good to as a way to funnel money to military contractors and to eliminate millions of people, but otherwise what would be the purpose? Why would China or Russia bother to invade us if they can manipulate our country remotely by controlling our financial, communication, transportation, and energy systems? Do they really want to send military forces to occupy the US?

              The US military may still think in terms of fighting traditional wars, but it’s likely an unnecessary waste of resources. Have our wars accomplished anything of value since WWII?

              And besides, why should other countries invade us if they can trigger a civil war where we kill each other?

            12. TechGuy- “My guess is that in about 10 years the EV will completely collapse & vanish.”

              This statement will go down as one of the ten most blatantly incorrect predictions of the decade, 10 yrs from now. Embarrassing moment for the author who typed it.
              Calls into question every other thing this man says, although I must admit I share the concerns about the gross mismanagement of risk (ie debt).

            13. A few years ago I was reading articles about how popular electric golf carts are as transportation in retirement communities. They are the transportation of choice to get around the communities.

              Many of these people are probably Republicans and probably don’t think it terms of energy conservation, but still find their tricked out carts more convenient and fun than traditional autos.

            15. In our small towns in the middle of nowhere and in the middle of USA, we have ordinances which allow people to drive golf carts on the city and village streets.

              Most golf cart drivers are retired people who drive them during all months except winter.

              Don’t see the golf carts out much during December-March. Rest of the year they are pretty common.

              Most of them are gas powered, but I assume the amount of fuel used is minimal. Some are electric.

          2. Gone fishing,

            A big question is demand vs supply and what oil price will balance the two quantities.

            My expectation is that you are correct in the medium to long term of 5 to 10 years, in the mean time rising oil prices will be needed to balance oil market. Eventally demand may fall faster than supply which will drive oil prices down and reduce supply more quickly. I think this happens after 2035, though I hope it occurs in 2030 or sooner.

    2. This is a terrific article. It takes all the confusions around oil and articulates them beautifully. His review really makes me want to buy the book.

      This is a delight to me because while I’ve always liked Laherrere’s charts, I find his English writing atrocious (not all his fault as a native speaker of French). This could alienate lay readers, which is too bad because his message really needs to get out there.

      The uncertainties he notes are shocking. That we have spent the last ten years pissing away our remaining “pennies” on a driving spree, instead of using it to build a renewable future, really makes me think that the backside of the peak is going to be awful.

      Laherrere’s knowledge is magisterial. Good on the editor who worked with him on this.

      1. Indeed the amount of work that Jean is producing is truly quite amazing.
        By the way what about Kjell Aleklett ?
        According to his blog he didn’t publish anything since 2017, the case ?
        The “issue” with Jean is that he also is a climato skeptic (regarding CO2 effects) and this has been detrimental to his ressource studies.
        But one exercice in comparing the urgencies (taking the IPCC models just as they are), and feeding them with the resource aspects of Laherrere, clearly shows that peak oil or even peak fossile is the most urgent matter (knowing that anyway the mitigation measures, dimishing fossile fuels burning, are usually the same, except stuff like CSS, that will most probably never happen anyway).
        Some elements (and Laherrere charts) in below post about this, sorry in French, but should go ok in gg translate :
        http://www.oleocene.org/phpBB3/viewtopic.php?p=2275983#p2275983

        Also below ppt in English from B Durand and Laherrere :
        http://aspofrance.viabloga.com/files/BD_Fossils_Fuels_Ultimate_2015.pdf

        2. And on this subject the most impressive chart is probably below one :
          [img]https://iiscn.files.wordpress.com/2018/12/lahererre-et-scenarios-giec.png[/img]

          Overall the terrible deficit of the “ressource message” compared to the climate/CO2 one, could be seen as a key reason for no measures being taken for the two aspects …

        3. “The “issue” with Jean is that he also is a climato skeptic …”

          Well, that’s depressing. Like Robert Hirsch.

    3. Interesting, but he lost my interest when he fouled up Texas reporting of oil really horribly. Confidentiality? Get a grip.

      1. Guym,

        Laherrere also suggests a 3 Gb URR for Eagle Ford where the USGS TRR mean estimate is about 12.5 Gb and when economic assumptions are applied the ERR is probably about 10 Gb.

        You are much more familiar with the Eagle Ford, at $80/b (2017$) does a 3 Gb URR estimate seem correct?

          1. Guym,

            Thanks. Does 10 Gb seem reasonable or is that too high? Average of USGS mean and Laherrere’s estimate would be about 6.5 Gb, again you know the area so your estimates would probably be better than most.

            1. It’s pretty difficult to measure with strictly an $80 price. Some depends on gas price. There are three windows in the EF. Oil, gas/condensate, and mostly gas. Gas has barely been touched, and is the biggest window. Geologically older. It still will produce some oil and condensate. If any, it will be mostly condensate. But it is still production as yet mostly untouched. Gas/condensate has been drilled, and is responsible for the higher api coming out of the EF, but in the past few years, less has been drilled due to the api. Oil window is being drilled, but there is still plenty of tier two and three areas to go. Not so much tier one. How do you measure that, and at what oil and gas price. I would say 12 is possible, but it includes a lot of condensate and gas.

              You could look at the USGS assessment of the Delaware in the same light. It may be there, but is it cost productive? You may only get gas and/or condensate, depending on geological age of the formation. Or, you may have to keep chasing after anything, as it moves quickly as wells are drilled.

            2. Thanks for the correction. Yes Gas prices would also be needed. The 10 Gb was C+C and yes there is probably lots of condensate. I guess I would make it $4/ MCF for NG, you would probably need condensate and NGL prices to do a full analysis, way too many moving parts for me.

            3. Got that right. Here’s my cracker jacks geology assessment in the Permian. midland and Delaware basins are slightly different, but the both have a wolfcamp as the lower level. It’s primarily a shale from my view of core samples. From the Bone Springs to the bottom wolfcamp, there is no clear formation that acts as a container, Bone Springs looks like it is closer to a sandstone, but closely formed from my view of the core samples. Not conducive to water flooding due to lack of “walls”. But, because of the lack of walls, the oil/condensate/gas travels when wells are drilled. Indications are that EF has the same problems, but not as fast? Very simplistic, and possibly wrong viewpoint.

              And there is a fairly wide variety of prices depending on what comes out. I’m still trying to figure out my pay Stubbs.

            4. If you want a real Wag for oil only on the EF, I would say 8 to max 10 left. Using EOG as the base on a company by company basis. EOG is, at least, 2 billion on their own. That may increase, over time, with enhanced recovery.

              I think the EF has another peak left in it with the right price, demand, and transportation. However, I think it would have to be before your projected 2025 peak, or not at all.

            5. Thanks, those estimates seem pretty reasonable. Note that the same people at the USGS estimate the TRR for the Eagle Ford at about 12.5 Gb, ERR is probably about 10 for the AEO 2018 reference case oil price scenario.

              Also not that for the Permian Basin the USGS says nothing about how quickly it will be produced. I have simply assumed the completion rate continues to increase at about the same linear rate that it has over the past few years, with perhaps a bit of a pause during 2019 when pipeline constraints are a problem.

              The EIA AEO reference case scenario for the Permian Basin has a much slower increase in output. Perhaps the completion rate cannot rise any further. Note that even at current completion rates, output continues to rise.

            6. Guym,

              Scenario below assumes well completions are constant at 400 conpletions per month in the Permian Basin until 2050. EUR decrease begins in mid 2024, TRR=73 Gb, ERR. Peak about 4800 kb/d in 2030.

  5. LARGEST CONTINUOUS OIL AND GAS RESOURCE POTENTIAL EVER

    Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.

    https://www.sciencedaily.com/releases/2018/12/181206135643.htm

    1. I’ll be curious to hear others’ assessments of this. Zinke is really jumping up and down with the pom-poms on this one.

    2. The Easter Bunny, Santa Clause, Tooth Fairy, but no Trolls? Conventional? They are out of their Fxxng minds. Dept of the Interior is sharing the same hospital suite with the EIA. Both digging for that phantom oil.

      Somebody ought to tell the oil companies to quit using all this fracking stuff. All they need to do is drill straight down. Sheesh!

      1. Guym,

        Your estimate of Permian Basin URR is …?

        Generally the USGS does a pretty good job in my opinion.

        1. I’m not a geologist, but your original projections peaking in 2025 appear reasonable to me. Slow peak, not a huge peak like some. To add to that, JG Tulsa (below post), who is a working geologist in the area, agrees with a mid 2020’s peak. I’m not stupid enough to argue with experts?

          1. Guym,

            You are clearly smarter than me. 🙂

            I do tend to listen when geologists and geophysicists try to educate me.

            Here is a preliminary estimate for US LTO assuming USGS mean estimates are correct, the Permian is up to date, but the older Bakken, EF, Niobrara, and US other LTO scenarios need to be revised to reflect the AEO reference oil price scenario. Peak about 9 Mb/d in 2025, also shown is an older estimate from June 2018 (before the recent Delaware Basin Wolfcamp and Bonespring assessment from the USGS.)

            2. Guym,

              The original assumed very low output from the Delaware Basin section of the Permian Basin (8 Gb TRR). Currently the USGS F95 TRR estimate is 27 Gb. Perhaps that would give a better estimate, for all of the US it would probably be about 50 Gb so similar to that older estimate.

              The USGS thinks there is about a 95 % probability it will be at least 50 Gb for TRR, ERR would be about 43 Gb.

              As I am not an expert, I just assume the experts at the USGS are correct.

    3. This 46 billion barrels oil – along with 20 billion barrels NGLs and 281 Tcf gas – is for the Delaware Basin Wolfcamp and Bone Spring only.
      Combined with the earlier Midland Basin assessments of the Wolfcamp and Spraberry of 24 billion barrels combined, the total so far Technically Recoverable Resource is over 70 billion barrels oil.

      Just as the Haynesville jumped from 39 Tcf to over 300 Tcf as the Haynesville/Bossier, the Mancos from 1.6 to 66 Tcf, the Barnett from 26 to 52 Tcf, the Bakken/TF will jump next assessment and both the Utica and Marcellus will skyrocket.

      1. Coffeeguyzz,

        I know less about Marcellus, but Bakken/Three Forks was recently assessed in 2013, the new assessment may be an increase, but I won’t speculate in advance what it will be.

        The 46 Gb mean undiscovered TRR for the Wolfcamp (Delaware Basin) and Bonespring is a surprise to me, based on this the Permian tight oil TRR would be about 74 Gb, before this assessment I had guessed 8 Gb for Delaware Wolfcamp based on output compared to Midland Wolfcamp (it was about 30% of Midland so I took the 20 Gb Midland Wolfcamp times 0.3 and rounded to 8 Gb). My previous mean estimate for Permian tight oil TRR was 38 Gb, so I was too low by more than a factor of 2. My F5 (5% probability TRR might be higher) estimate was 54 Gb before and the F95 estimate was 20 Gb, these are revised to F95=43 Gb and F5=113 Gb.

        For the entire US I had a previous TRR estimate of 70 Gb for all of the US, this is revised to 107 Gb for the mean US tight oil TRR.

        An interesting development that might push the US peak in tight oil a little later and/or a little higher. My F5 model had the Permian peak at about 7.5 Mb/d in 2027, a new model might result in 2029 at 9.5 Mb/d, for the US as a whole, other tight oil plays might be declining by 2029, so the overall US peak might be 2027 or 2028, based on current information.

    4. https://pubs.usgs.gov/fs/2018/3073/fs20183073.pdf

      The formal report. The references are . . . a bit odd. There is a sense the whole thing is dependent on technology results assessment from IHS.

      Meaning, I don’t see anything here that suggests USGS sent teams out to look at rock for this whole area. They seem to have taken info from other IHS papers — and the recent ones from USGS were for what looks like much more limited geographic areas. Looks like IHS encouraged extrapolation.

      1. Btw someone at Bloomberg has declared this is a X2 on previous estimates. That would suggest 46 billion barrels of oil we’re not just added to the US resource database. It would be more like 23.

        The Bloomberg guy didn’t seem all that sharp, and so let’s not take that as gospel.

        Probably worth noting that it would not take much variance to move this resource into an API 45+ or even 50+ configuration, and given the NAT gas and NGL estimates, that would seem a pretty credible scenario. In which case it’s not oil.

        1. My previius Permian mean TRR estimate was 36 Gb, noe it is 74 Gb about 2 times larger, my earlier estimate for these plays was 8 Gb.
          For ERR the estimate goes to 60 Gb from earlier 30 Gb estimate, so the 2x is about right in my opinion.

          Nobody thought output from these plays (wolfcamp and bone spring formations of Delaware basin) would be zero.

      2. “Extrapolation” fits with it being undiscovered TRR.

        This reminds me a lot of ANWAR (wasn’t oil) and Monterey (not actual technically recoverable, our bad).

        1. The Monterrey estimate was a study done for the EIA which was poorly done (it was not a USGS estimate), the USGS estimates tend to be pretty good and have tended to be on the conservative side, though we won’t know for sure until all the oil is produced and the last well is shut in. Every resource estimate involves extrapolation and/or modelling of future well output by definition.

          Some estimates are better than others, for example the USGS estimates are better than the EIA estimates in most cases.

          1. One thing I don’t undertand is this sentence: This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.

            How the heck can someone know how much quantity there is of something that hasn’t been discovered?

            1. Oh don’t ask such silly questions. These guys are professionals who know what they are doing. They are the authority! You must learn not to question authority.

              /sarc

            2. Hi Ron,

              When someone knows more than me about science and is an expert in their field, I tend to think they may be correct.

              So far, USGS estimates have been pretty good (or if wrong they have tended to be too low), they tend to make conservative estimates.

              If I had a good case to question their analysis, I would do so.

              Someone’s claim that USGS estimates are a joke carries little weight with me, but a peer reviewed paper disputing the result would be convincing.

            3. Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil,…

              Dennis, in 2016 697 million barrels of oil equivalent discovered in the entire world. In 2017 the figure was 625 million BOE. In 2018 the number is expected to jump to 826 million BOE. That is oil and gas combined and about half of it is gas. That is less than half a billion barrels per year, if you don’t count the gas….Worldwide!

              And now you tell me that the Permian basin alone has another 46.3 billion barrels yet to be discovefred. I just don’t fucking believe it.

              Global Oil Discoveries See Remarkable Recovery In 2018

              If I had a good case to question their analysis, I would do so.

              I just gave you one.

            4. It is not yet to be discovered, Mr. Patterson.
              The terminology used by the USGS is misleading.

              Glancing at the short report shows very modest EURs along with pretty standard spacing per unit (640 sq. acres).
              The Avalon is also included although it is not getting the attention as the Wolfcamp and Bone Spring.

              As shockingly high as the numbers may appear, they are little more than what the operators have been claiming for some time now.

              This “new” discovery is not “new” at all.
              It is simply a reflection of the technological advances these past few years enabling a stunningly high recovery from these massive hydrocarbon resources.

            5. Hi Ron,

              The USGS does not just make this stuff up.

              I would note that your chart is conventional oil discoveries, most of which has already been “discovered”. Also the discovery of resources is different from reserves. Those need to be economically recoverable at current or expected future oil price levels. These Technically recoverable resources (TRR) are different from 2P reserves so your comparison is not really valid. 2P reserves are subset of total reserves which are a subset of technically recoverable resources.

              No doubt you did not believe the resource estimate for the Bakken/Three Forks in 2013, for the North Dakota Bakken (where the data is quite good) the mean estimate was about a 10 Gb TRR and I was skeptical in 2013. The estimate has proven remarkably accurate at the end of 2017 proved reserves were about 5 Gb and cumulative production was about 2.4 Gb for a total of 7.4 Gb, my expectation is that as future oil prices rise proved reserves are likely to increase, in fact it is possible that probable reserves in the Bakken/Three Forks might already be 1.5 Gb, though I do not have access to 2P reserve data so that is a guess (though a relatively conservative guess).

              In any case I have become less skeptical of USGS estimates, also not that the USGS Eagle Ford estimate concurs with GuyM’s estimate of Eagle Ford URR, though GuyM is also very skeptical of the recent Permian basin estimate.

            6. No doubt you did not believe the resource estimate for the Bakken/Three Forks in 2013, for the North Dakota Bakken (where the data is quite good) the mean estimate was about a 10 Gb TRR and I was skeptical in 2013.

              I did not believe or disbelieve Dennis. Because I dont remember reading about any undiscovered resorces in the Bakken in 2013. So when were those undiscovered resources discovered? And why don’t they show up on the chart I posted above?

            7. From the USGS site, page with Glossary …

              field ” … a hydrocarbon field consists of a reservoir with trapped hydrocarbons …”

              undiscovered … “Resources postulated, on the basis of geologic knowledge and theory, to exist outside of known fields …”

              All this report is saying – similar to all these so-called shale plays over the past several years – is that enormous amounts of recoverable hydrocarbons exist that are not considered as traditional, conventional reservoirs.

            8. Hi Ron,

              I mentioned a 10 Gb TRR, only 5.5 Gb of that was undiscovered. Since that assessment (in April 2013), about 3 Gb of the 5.5 Gb mean has been ” discovered” in the Bakken Three Forks, that is cumulative output plus proved reserves have increased from 4.5 Gb to 7.5 Gb.

              As oil prices increase in the future there will be more resources and reserves that move into the “discovered” category.

              None of this oil would show up on a “conventional oil discovery” chart as tight oil is not considered “conventional” oil by most.

    5. Thanks Doug,

      Previously I has guessed (incorrectly) that Permian mean TRR would be 38 Gb, this new assessment would lead to a revision to about 74 Gb for mean TRR of the Permian Basin tight oil resource.

      In the scenario below I have a 253,000 well scenario (about 6 times more than my ND Bakken/Three Forks mean scenario with 42,000 wells completed.) I assume new well EUR starts to decrease in Jan 2023(about 3 years after my estimate of the future ND Bakken EUR decrease start as Permian ramp up started about 3 years after Bakken). This assumption is easily modified.

      Peak is about 2028 with peak output at about 7000 kb/d (currently Permian tight oil output is about 2750 kb/d based on EIA tight oil production estimates by play).

      1. The scenario above does not consider economics. When we consider the discounted net revenue over the life of the well and assume this must equal the real well cost in order for the well to be completed using the assumptions below, then we find an economically recoverable resource (ERR) scenario.

        Economic assumptions (all costs in constant 2017$) are:

        real oil prices in 2017$ follow the EIA AEO 2018 Reference Brent Oil Price scenario
        royalties and taxes are 32% of wellhead revenue
        transport cost is $4/b
        OPEX is $2.3/b plus $15000 per month per well
        real annual discount rate is 7% (nominal rate is 10% at 3% annual inflation rate)
        real well cost=9.5 million 2017US$

        Peak output is unchanged but wells completed are reduced to 173,000 and ERR=60 Gb.

        1. The indications from drilling companies, so far, operating in the Delaware do not seem to jive with the assessment of grandiosity. So, I am more than skeptical. The government can create all the reserves they want, but if the oil companies can’t get it out of the ground?? My understanding is that there is a core area in West Texas and NM. EOG is there. Extends a few Counties in West Texas and NM starting around Loving County. Even there, it is high api. Outside of that, it is highly sporadic. If you extrapolate what they are doing in tiny Loving County to the rest of the Delaware, you can come up with these numbers. But, you can’t. As I read, there are over 800 Ducs outside of this area. You leave them as Ducs, because you pretty much know what the completion will look like after drilling. Basically, the report is hogwash. It’s pretty easy to tell on the Texas side, as you can pull up completions by county.

          1. Guym,

            It may require higher oil prices and the associated gas is a problem, not enough infrastructure to move it.

            Also the USGS simply does a resource assessment, these are not reserves, no economic assessment was done, the USGS leaves that to others.

            I have often been skeptical of USGS Assessments (such as Bakken Assessment in 2013), looking at proved reserves and cumulative production to data in the ND Bakken/Three Forks, the 11 Gb mean TRR estimate from 2013 looks pretty good.

            This may look different in 2023.

            1. As a working petroleum geologist in the Delaware Basin and others, I will say USGS and EIA assessments are considered a joke. They do little to take into account the actual geology, or changes in the thermal maturity of the rock across a basin, it is more multiply an average well performance for a certain amount of acres drilled, times the total area of the basin, minus the number of drilled wells. Everything is more complex than that. Right now operators are drilling the best, most economic parts of the Delaware basin, at the going rate it will not be too many years before they have to shift over to other benches of the Wolfcamp or Bone Spring, which will be less productive. for deeper Wolfcamp benches you get more condensate, less oil, much more gas, you might go from a 10,000′ lateral making 1-2 MMBO in the Wolfcamp A, down to one making 300-500 MBO. Still a decent well when you add in the gas, but if you take that across a large area that will lead to a substantial decline in new well performance. I would not doubt oil production peaks in the mid-2020s as people drill up the best rock, and have to keep shifting to less productive horizons.

            2. Thank you. That was my take on all, but I’m no geologist. Nice to have a professional opinion.

            3. Mike,

              Yes the EUR’s are quite low, but that accounts for the entire area, sweet spots will be higher and peripheral areas will be lower. I take actual average well productivity from shale profile and add in the economics (including interest payments at an annual rate of 7.4%). All debt gets paid by 2026 and cumulative net revenue for th Permian as a whole reaches 460 billion by 2036.

              This assumes that the AEO reference price scenario is correct, in reality oil prices are likely to be higher than the AEO reference case.

            4. Thanks JG Tulsa,

              Can you give us your estimate of the TRR or ERR of the Delaware Wolfcamp and Bonespring. There is a wide range in the USGS TRR estimate from 27 to 71 Gb with a mean of 46 Gb and a median of 45 Gb. Would you say that 27 Gb is too high? It seems clear you think that 46 Gb is far too optimistic. Note that the mean ERR would probably be around 38 Gb if the mean TRR estimate was correct and prices follow the AEO 2018 reference price scenario. For the F95 USGS TRR estimate the ERR would be around 21 Gb.

              Maybe you could also comment on other USGS assessments for Eagle Ford, Wolfcamp Midland basin and Spraberry. Perhaps you could give us the “correct assessment”.

              I agree the EIA assessments are not good, economists do not know much about geophysics. The people at the USGS are scientists, though they have limited information and thus use statistical analysis to fill the data gaps.

            5. Come on, Dennis. He may be a geologist, but my bet he is mortal, like you and I.?
              I really believe your first graph with 8 million as the high is the best I have seen. The tail of that is probably not ever to be properly guessed, until it happens.

            6. Guym,

              If someone is going to claim the USGS estimates are a joke, they must have some number in mind as a better estimate, I am just asking him to reveal what he knows.

              Or not.

            7. Dennis, over the years, I have spent time connected to US government run operations. That’s why I wouldn’t believe much that comes out of them, unless I could verify it otherwise. I am not anti US, just an informed veteran. Military intelligence is an oxymoron. I have said that I am CPA on this site, hence I would never answer a direct tax question on this forum. Think about it. It has a direct relation to liability. Besides, wouldn’t you expect a professional to charge for that kind of info?

            8. Dennis, you’d be plum stunned, I am sure, to know how many knowledgeable oil folks think this recent USGS assessment of theoretical, ‘technically’ recoverable, possible, as yet undiscovered, economic at some unknown oil price, wild ass guess of resources, not reserves, in the Delaware Basin is a joke. Its actually NOT necessary to have a “better estimate” in mind at all and still think its a joke. Lots of oily folks don’t bother with that kind of hypothetical stuff. Only the government does, as sort of a means of self preservation. Like the EIA and it’s long term oil price predictions, or wobbly production estimates.

              What these government guesses do is give drama to drama queens, columnists, analysts and poop for the US shale oil industry to keep Wall Street on the hook and handing out cheap money. It creates confusion, little else. Does the USGS go to great lengths to explain to dumbass Americans what the difference is in technically recoverable, “possible” resources are and actual oil in the stock tanks is? Hell no it doesn’t. There is a reason for that.

              There are are no absolute truths in the oil and gas business, Dennis, as much as you seem to need for there to be. The only gimme is realized production data and the current balance in the check book.

            9. GuyM and DC and Mike and all,

              In the interest of good will I wish to point out that the second “S” in USGS is “Survey.” Powell the one-armed Civil-War veteran (the one who ran down the Green and Colorado rivers in open boats) started the Survey, as we called it, in order to find out what was there in the Great West that the US had come to own. In the case of oil and NG that can come down (oh, this is using a very broad brush) to examining the geology of a region as well as possible and trying to find something as similar as you can that does contain and produce the stuff, and basing your estimates on the resemblances.

              The Survey does not address economic factors because it isn’t supposed to, and it lacks the expertise to do so as a result.

              time for port

            10. Synapsid, I’ve used USGS information for over 50 years in precisely the manner it was intended to be used. It is no longer being used in that manner by the MSM, pundits, columnists or so called, oil analysts. It will not be used correctly by Washington DC as it attempts to use unprofitable shale oil and shale gas resources as a foreign policy tool or as a means to isolate America from the rest of the world energy order.

              This from the Director of the USGS himself: “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.” Since when did the director of the USGS embrace energy policy, good or bad?

              In the manner this resource assessment IS being used its important to point out that the 300,000 wells the USGS itself says will take to recover these technically recoverable resources will cost more than $2.75 trillion dollars and at <200K BO EUR per bench something like $150 oil prices to ever come to fruition.

              I am not in the least bit confused what this USGS study actually means. It means very little. Its a guess at resource potential over hundreds of square mile. It will likely be very confusing to the general public and it is already very confusing to Dennis.

            11. Hi Mike.

              I agree that the Survey’s report will be misused by the MSM and the Administration and oil analysts and such. That’s been expectable for decades now.

              As to since when does the Director of the USGS embrace energy policy: Ever since Reagan, if memory serves. The Director had been a geologist before that, mostly one who came up through the ranks, I believe. The office hadn’t been appointed politically.

              Thanks for that second-to-last paragraph–it’s gold. I hadn’t seen the report.

              Too late for port so it will carry over for tomorrow. Something to look forward to in these dark times.

            12. Mike,

              Of course nobody knows what will be produced until it is. As a business man I imagine you need to plan for the future, even though you don’t know exactly what it will be. The government agencies do the best they can to predict what will happen in the future to guide policy makers. Perhaps the TRR is incorrect, but for the Permian Basin it is quite a large range from 43 Gb to 113 Gb (5 to 95% probability range with a mean of 74 Gb.) The ERR in a scenario such as the AEO 2018 reference price scenario is about 35 to 100 Gb with a mean about 60 Gb.

              I have no idea what the correct level is and obviously nobody knows future oil prices, though without some guess we have no clue what future output might be.

              So what do you think future URR of Permian Basin might be at whatever oil price you expect in the future, a range is fine, say 5 Gb to 25 Gb or what ever range seems reasonable.

              Clearly you know the oil business and your guess would be better than mine.

            13. My guess is they can eventually pull 50 to 60 billion barrels out of the Midland, Central, Delaware, and Northern Shelf, but about half of that will have an api closer to condensate than oil. May have to chase it down, and waste a lot of money. And they will get enough gas to last Texas for a lifetime. How is that for a completely non scientific estimate? In the end, roads will be impassible and dotted with sink holes, there will be no water west of Fort Worth, the main economy will be based on drug rehab, the Permian will look more like the Okla Dust Bowl, the entire West Texas will have daily 4.0 to 5.0 earthquakes, the remaining E&Ps will have filed for bankruptcy, and the poor protected lizard will be gone, fed down the pressure pipe along with his home. We will have sold off all our oil and gas to the Chinese, and we will be using rickshaws because Dennis wont share his Tesla, and the US economy will have long been a failed effort. There is a price for everything.

            14. Seriously, sometime in the next two years, I see the restriction being put back on exports, slowing this fiasco. I never thought I’d be the one to want to restrict exports, because I want my money, but some things are always bigger than wants. If the government can not see it as a national security issue, then there will be enough people paying high gas prices to bring it to the elected officials.

            15. I agree with Guy, save for the 50-60G barrels of C+C part. I might also add that in addition to W. Texas becoming a wasteland, whatever they can wring out of that crap, there will be no more trees in Maine; they will have all been cut down to make paper to print money to give to the Permian shale oil industry, a loaf of bread in America will cost more than an acre of land in Midland County and because of $30 trillion of federal debt half the people in America still willing to work will be in China building railroads and doing laundry.

              There is indeed a price to be paid for everything and the “price” we are already paying for this shale oil speed bump is staggering. It will only get worse. So, its not about how much oil might be tucked away somewhere, its how many arms and legs it will cost to get it out of the ground. If folks have to analyze something, THATS what needs analyzing. And not using $120 oil prices either.

              Because lets face it, they have not been able to even get PROVEN reserves out the ground economically yet.

            16. The 50 to 60 was a loose extrapolation of some of the oil companies. Do I really think they will pull it out? No. Eagle Ford went through the same initial BS, and it didn’t happen.

            17. Hi Mike,

              The AEO Reference case I use (for the medium oil price scenario for the USGS mean TRR case to create a medium ERR case) in chart below. The oil price in 2017$ (the real oil price) is under $80/b until 2022 and under $90/b until 2028, it reaches $113/b in 2050.

            18. Mike,

              I am not confused by the USGS study at all. Surprised? Yes.

              The mean Technically Recoverable Resource is about 74 Gb, using the usual economic assumptions including a 9.5 million well cost 10% annual discount rate and EIA AEO 2018 reference case oil prices the Economically Recoverable Resource is 60 Gb and if completed wells per month gradually increase from 400 to 700 new horizontal per month in the Permian output rises to 7400 kb/d by 2027 and then declines. About 25 Gb produced through 2027 in this scenario and 35 G b from 2028 to 2080.

            19. Guym,

              Decreasing exports will not reduce prices. It will just reduce output. Seems a bad idea in a free market capitalist system, but real conservatives may think differently. 🙂

            20. Well, Dennis. You misunderstood, but I have no idea how you thought I was talking about lowering prices. The concept of reducing exports ,would be for the US having it later, instead of being bludgeoned by others.

              I’ll answer your other snide remark you made below. I believe in free markets. I don’t think free markets trump national security. There is no contradictiion. I believe in free speech, but someone standing up and yelling fire in a crowded auditorium crosses the line.

            21. Guym,

              Note that the USGS Eagle Ford estimate (12.5 Gb mean TRR, with and ERR of roughly 9 Gb) is pretty close to your guess of 8 Gb for the Eagle Ford.

              It is not clear why the same agency (USGS) would be so far off in the Permian Basin.

              I am still waiting for the estimate of the experts who know far more than me.

              For the ERR estimates at the AEO 2018 reference oil price case, I have 35 Gb (F95) with 101k wells, 60 Gb (mean) with 173 k wells, and 98 Gb(F5) with 283k wells.
              Peak output is 5400, 7300, and 10,000 kb/d respectively in 2024, 2028, and 2032.

              Peak well completion rate is 630, 720, and 920 new wells per month in 2024, 2027, and 2030 for the low, medium, and high ERR cases. Current completion rate is about 400 new wells per month. Completion rate increased in 2017 at an annual rate of over 100 new wells per month, these cases have completion rates increasing at far lower annual rates (about 40 new wells per month each year or less).

              Perhaps even 35 Gb might be too high (this is close to my older medium case estimate, before the release of the Delaware basin Wolfcamp and Bone Spring USGS assessment.

            22. Guym,

              You mentioned high gas prices so I assumed you meant gasoline. Generally high “gas” prices imply high oil prices, but I may have misunderstood.

              Also I imagine you see the contradiction where you don’t trust government estimates (USGS and EIA), but you trust the government to decide what goods can be exported or not. Standard economic analysis suggests leaving the market to decide, after taxes adjust for externalities leads to optimum outcomes.

            23. Dood, one of the most frequent points we deal with on this blog is the claim that technology in horizontal fracking has multiplied output tremendously — excluding from consideration stage count/length.

              The extra production “per well” seems to be from the well being longer in length and thus consuming more water and proppant. Is this true, or is there some magical improvement in proppant type or fracking pressure or whatever?

            24. It’s mostly the length of the lateral, although some is due to increased fracing stages within the lateral (more holes in the pipe). Better drilling is another, although extra lateral makes up most of it. The laterals, in general, are about twice as long.

            25. IOW, one hole but the amount of lateral through rock is equivalent to two wells. It’s more cost effective than two full wells would be but the production numbers are misleading if one is using them to extrapolate across land surface area.

            26. Propoly,

              Agree 100%. If we have 5000 foot laterals and 200 kb average EUR, it is no different (from a technically recoverable resource perspective) than 10,000 foot laterals with a 400 kb average EUR. All that happens is that the potential number of wells completed is cut in half, the TRR will be the same. If cost per barrel is reduced with the longer laterals then the ERR may be a bit higher, probably roughly in proportion to the reduced cost per barrel produced.

              I also agree with Guym 100% that most of the increased EUR in the Permian is due to longer laterals, though there might be a bit of increase from more pounds of proppant used per lateral foot and perhaps more frac stages per foot of lateral as well.

            27. JG Tulsa,

              They use different EURs for the different benches and they estimate an average for each of those benches. Clearly it is a simplification and it is doubtful they have access to as much data as the individual oil companies so they work with the data they can get from IHS.

              No model is perfect as I am sure you know.

            28. I can understand no model is perfect, but the maps and assessment made by the USGS is just lazy. For instance, on their map of the Wolfcamp D and C continuous unit, they miss that the Wolfcamp C and D don’t exist in Pecos county, or Jeff Davis county, or the southern 1/3 of Reeves county, or a good portion of Culberson county, or about half of what they have shaded in Eddy county, not to mention some of what they are counting as recoverable is on National Park land. So their area estimate starts out flawed, and the EUR estimate for gas recovery is also flawed, the high case they have listed is 4.5 BCF per well, the average well with a modern completion is 5-6 BCF, some are over 10 BCF. Similar problems exist on the Wolfcamp A and B, they drew a big outline, that covers regions where the formations either don’t exist or have no productive reservoir. I come up with about 2.5 Million acres of potentially productive A which is smaller than their low case. Again their average EUR is too low, if you take into account all wells ever drilled that might be the right number but if you look at modern completions, even with infill drilling the average well should be 600-700 MBO. The Bone Spring assessment is by far the worst one. Lumping the first second and third Bone Spring formations together implies that they are all productive everywhere in the blob outlined, when that is completely not the case. With the Avalon, just because it exists does not mean it is productive, most of the area outlined the Avalon is so thermally immature it is not productive, and there are hundreds of millions in abysmal wells to prove it.

              What I mean when I say the USGS reports are laughable is that they do not do basic geology to determine the presence or absence of the rock they claim to be resource. They do not look at modern vs old completions when determining EUR, they do not look at the impact of drilling 4 or 6 or 8 or 10 wells a section, they do not look at places where the Wolfcamp A is 600′ thick and you might put in two or three laterals for each well slot. I do not have a number for recoverable resource for the basin, because I am sure I would be wrong, but I won’t publish a paper on my wrongness that can influence politicians and world markets either.

              One final note, on the cost and time to do all this, if you just drilled all the A wells in my more realistic AU, it would be close to 30,000 wells, about ten years straight at current drill rate and a cost of about a quarter trillion or more. Then you can move on to the B C D etc. wells. My grandchildren will likely be able to come out and drill wells on top of or underneath wells I drilled.

            29. Thanks JG Tulsa.

              Based on data at shale profile the average 2017 Permian basin well completed in 2017 had an EUR of about 420 kb.

              USGS may simply be including a broad area but may not be including all of the area as prospective.

              Do you have a rough guess for ERR for AEO ref oil price case.
              My estimate is 60 Gb with about 173,000 total horizontal wells completed at 1.63 trillion for total well cost in 2017$.

            30. JG Tulsa,

              My medium scenario for all of the Permian has about 78,000 horizontal wells drilled for the next 10 years, perhaps 30,000 of them will be in the Wolfcamp A in the Delaware basin and the other 48,000 in Midland Wolfcamp and Spraberry, though I expect a few will be in some of the other relatively productive benches.

              I doubt current drilling rates will be fixed, they are likely to increase gradually over time as they have mostly done since 2010, except for a brief downturn during the oil price crash in 2015 to 2016.

  6. US becomes a net oil exporter.

    Hanh? And this paragraph strikes this lay reader as utterly incoherent:

    The U.S. sold overseas last week a net 211,000 barrels a day of crude and refined products such as gasoline and diesel, compared to net imports of about 3 million barrels a day on average so far in 2018, and an annual peak of more than 12 million barrels a day in 2005, according to the U.S. Energy Information Administration.

    From EIA: “In 2017, the United States consumed … about 19.96 million barrels per day.” Let’s call it 20.

    Also from EIA: US weekly field production ending 11/30: 11.7 million barrels.

    20-11.7=8.3????

    True? Fudging? Lying? What am I missing?

    Then, you read further into the article:

    While the net balance shows the U.S. is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day.

    WTF.

    1. It’s all measured in barrels.

      The US refines a lot of imported oil — for export. There is refinery gain in this. This means a barrel comes in. It is refined to various constituent parts like gasoline, diesel, kerosene, etc. The VOLUME of these parts are liquids of less density and this means their volume is greater. So a barrel of crude will yield a sum total of more than 1 barrel of liquids of lower density. Since these products are exported, the barrel count is in favor of exports vs the barrel count imported.

      This is not a huge effect, but it’s significant.

      There’s an EIA page for US sales volume consumed. If you add up all the products you get well over 15 million bpd. US production is rather less than that. Imports must exceed exports.

      1. Thanks for trying to explain it to me. Maybe it’s just too complicated for me to understand.

        I still can’t reconcile the headline, “US becomes a net oil exporter” with the EIA’s numbers: The US consumes 20 million barrels a day. The US produces 12 million barrels a day. But, yes, they’re net exporters. Whatever.

        After 14 years, the niceties of peak oil still escape me.

      2. I am not sure I follow you entirely, but for heavier crude oils there is waste to get to diesel (a bit higher than 30 API). And for extra light oil there is a huge waste to get to diesel, as much has to be segregated to petroleum gas and gasoline components due to length of carbon chain.

        The case for diesel shortage in 2020 due to shipping legislation is still very much legit.

        1. I was talking about imported crude (that would not be LTO and probably diesel rich) being refined into a larger number of barrels of product vs the barrels of input crude. They export. It’s a bias towards export.

          I think mostly the report derives from very noisy weekly data. The US is not a net exporter.

    1. Yes, it is all a big show!

      The peak oil theme is very much forgotten in all the turmoil, but is very real still. How much more reserves to classify as probable (2p) is a movable target, it depends on the oil price. And how rapid the extraction rates of reserves can extend to…difficult to say; technology and not at least the 3D maps of reservoirs coupled with improved seismic data, more precise drilling and lower costs due to excess oil service capacity (at least for offshore) have countered the inevitable declining quality of oil reservoirs and size of new ones coming online for some time now.

      I agree that 2019 will show big declines in OECD inventory primarily because core OPEC wants it. (increasing KSA premiums to the US +3,5 dollars in Jan and lowering it to Asia). The next question is how high oil prices will go before there is some reaction from the nations that have spare storage/capacity. I am thinking there is some relief in increased pipline capacity in Texas in 2H 2019 and also Johan Sverdrup in Norway (since I follow things close to home) in the same time period to save the oil market in winter 2020. Or still more likely, a spike in oil prices in 2H 2019 and a recession soon thereafter. Who knows..the only thing certain is that oil is being pressured towards the final “spare capacity” (whatever that is) and that a recession will come anyway as a result of the low oil price environment the last 4 years. Offshore is hit hard, so are supply in places “too risky” for cheap financing…the hidden secret of the oil market (why so few news stories covering this?)

    2. Saved from $40 oil, but I really doubt there will be much of a frenzy at $52 oil price. Hopefully, that will give them enough cash flow for stationary. They need to write Christmas letters to their shareholders telling them everything will be better next year.

    1. The end of that article says Rosneft has provided 17 billion dollars to Venezuela since 2006. That is loans.

      Then there is one other sentence that probably would not have appeared in a more narrative focused article. It says 3 billion is still outstanding. That sort of suggests 14 billion was repaid.

      1. Obviously, Western Media has put a spin on what is happening—
        Maduro was to gone years ago, and a great uprising was to bring capitalism and freedom to the oppressed masses.
        That story has not panned out.
        Inquiring minds are a bit confused———

          1. I have no inside info currently (I have had numerous friends there recently).
            Things are very unsettled.
            But mainstream media is obviously very set on their point of view, for political and social reasons.

            We shall see- I have no inside info, as stated

        2. Re-elected to 4 year term a few months ago. The great uprising apparently were too excited by capitalism to vote.

          1. Obviously the case. They were too busy getting the exchange value over the user value to notice.

        3. Looks like France may beat VZ to a gov’t overthrow\revolution.

          Usually by now, there is a military coup to end this type of slow death spiral. That said. it appears a lot of people already fled VZ. I believe about 2M have left this year alone. I guess this is one effective way to get your population growth under control.

          Last man in VZ please turn out the lights.

          1. Interesting you mention France. All this trouble has been caused by an attempt to encourage a move away from fossil fuels by taxation. If this is a window on the future it is going to get very grim when physical shortages actually occur. One thing is for sure none of the French protestors give a toss about the environment the protest of choice is burning tyres.

            1. No if about it I think – it’s going to be grim beyond our current imagination, four horsemen grim.

              The fuel tax changes weren’t just driven by climate change considerations – France hasn’t been meeting EU requirements for deficits and needed to increase government income somehow. The changes made might just have been seen as a least contentious way to increase the tax load on the the poorer workers. Didn’t work.

            2. Same thing happened in France in 1789. The French revolted over taxation & heads rolled. You can only push the working class so far before the pushed back. Seems Frances gov’t breached that limit.

              I am wondering if this is the beginning of Facism 2.0 in Europe. When the trains stopped running and the food shelves were bare, it opened the door for facist dictatorships.

              Consider that WW1 ended in 1918 (100 years ago) and by the 1920s, Europe was stuck in a financial mess that lead to frequent worker strikes & revolts. So will France become the next NAZI’s or will Germany create its EU army to crush rebellions in France, Italy? Which Fascist regime will take over the EU?

              This is why socialism is such an awful form of gov’t soon or later the socialist run out of OPM and the whole system unravels.

            3. Let’s be sure we phrase this properly:

              The odds that anyone else ever again tries to reduce oil consumption via fuel tax are now just about zero.

              Full stop.

            4. Tech Guy- you are getting pretty loose with your cognition here. Socialism is not a ‘form of government’. It is a fairly wide spectrum of economic policies (ranging from minimal to extensive).
              ‘Forms of government’ include such templates as democracy, dictatorship, monarchy.
              If this is news to you, then damn, our education system has failed miserably. How do we have a democracy when people don’t even know the difference of such things?

            5. Socialism Applied to gov’t policies.

              Don’t take everything so literal.

            6. I called you out on your misuse of the terminology “This is why socialism is such an awful form of gov’t”,
              because this is one of most destructive purposeful blurring of meaning used by propagandists over the last 70 years.
              McCarthyism was extremely damaging to democracy, and this kind of speech was a prime tool, and still is among republicans. Ignorant people might not be able to discern the difference, so we must careful of our choice of words.

      2. Venezuela repaying loans to Russia with oil has been a known thing for years. I don’t believe they’ve missed shipments on it until this year, and they’ve still made most of them. Unlike dollar debt payments which are almost all in total non-payment default. There was also giving Rosneft 49% of Citgo in there (the USA may disallow that).

        Another $5 billion doesn’t come close to fixing Venezuela, even if it was in one shot.

  9. Baker Hughes (GE) International Rig Count – November
    Total down -26 to 991
    Oil -15 to 783
    Natural gas -8 to 179
    Misc -3 to 29
    Split: Land -25 to 785 and Offshore -1 to 206

    Colombia -3 oil
    Mexico -4 oil
    Norway -3 oil

    OPEC
    Ecuador +5 oil
    Kuwait -6 (-5 oil -1 gas)
    Nigeria -6 oil
    Saudi Arabia -3 oil
    Venezuela -2 (-1 oil -1 gas)
    BH: http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsintl
    A chart showing the total: https://pbs.twimg.com/media/Dt1NkdgWkAA_V-0.jpg

  10. OPEC+ have reached an agreement

    2018-12-07 (Bloomberg) Detail from OPEC news conference on Saudi oil production:

    October: 10.7m b/d
    November: 11.1m b/d
    December: 10.7m b/d
    January 10.2m b/d

    1. Qatar has wet gas to oil (products) facilities thanks to Shell from the North Dome gas field. Not very economical due to being built in the +100 dollar/b era, but stable output for a long time I guess. Primarily Qatar along with Iran is about the LNG future; a lot of future LNG (maybe not according to Trump’s vision). But a lot of others could however benefit from ample natural gas supplies from this cross national field the next decades.

    2. Definitely peak crude and will reduce OPECs aggregate numbers. Them leaving is more about political problems with Saudi Arabia.

  12. With 1.2 Mbdp off from KSA/Russia, Iran down 1Mbpd, Venezuela down 2Mbpd, and with large gains still likely from US Permian LTO, Canada and Brazil and possibly Iraq, we do not appear to be near a geological peak in the next two years. What happens on the political side of things worldwide, of course, is anyone’s guess. Possible black swans: Libya, Nigeria and/or Iraq; US LTO debt bubble bursting; Yemen proxy war spiraling out of control in conjunction with rising tensions from Iran sanctions…

    1. Declines are geological, too. A lot of countries are close to, or past their peak.

    2. Venezuela could produce far more. People have been pointing that out since Hubbert’s original work. But that would require wholesale political change and many years of high investment afterwards to recover from this.

      Russia essentially is at geological peak. They are keeping production up by doing what the Chinese did – massive infill and creaming. At a certain point they need to either open replacement giant fields (no real prospect of this) or decline.

      Brazil may be able to come up a little more but they’ve had issues (besides political/corruption) in exploiting that forecast potential. It’s so far offshore that the logistics make it hard to build new stuff faster than the current stuff declines.

      US LTO is the ballgame, as it has been since it got started.

      1. Actually, Brazil is opening their fields to outside investment beginning middle of 2019, and indications I get is that there will be substantial increases. Depending on whether they keep that up, who knows? Venezuela nationalized everything, and is paying the price, now. And Canada will, some day, probably solve their pipeline issues. Still, those are the only three, and many more are going doowwwnn!

        IEA indicates on their World Outlook, that if no new production happens, by 2025, we would have lost almost 30 million barrels a day. That’s why we have to keep drilling!

        1. Good points – not being in the oil biz it’s easy to forget that everything else is declining. I feel like the problem with trying to understand peak oil is the harder I try to focus on the information the fuzzier everything gets. Probably that’s just the way they like it…

          1. It’s worth looking at that chart. I think EN posted it in an earlier section. But, all you have to do is go to the IEA website and look at the most recent World Outlook. It’s really unique, because it is the first time I’ve seen IEA discuss declines. If the US shale production does not meet their lofty estimates, peak occurs. It won’t come close next year, or the year after, and so on. That’s why Ron says next year, and so do I, with the caveat that 2018 is running neck and neck. Dennis thinks 2025 will be peak. But, if we insert his chart into that chart, we are past peak. Shale will peak then, I agree with him, but it won’t be enough. However, if prices rise high enough, we may see rickshaws carting oil to load up on sampans at sea, and armed militia guarding the black gold.

            1. Guym,

              2023-2027 has been my guess for a couple of years, though if recent USGS estimates are correct for tight oil (mean estimate for TRR is about 100 Gb for Permian, Bakken, and Eagle Ford, if we add another 15 Gb of other US LTO plays we get about 115 Gb for US LTO TRR, reasonable economic assumptions (including oil prices) leads to economically recoverable resources (ERR) of about 90 Gb, with a peak in 2027 at 9 to 10 Mb/d for US LTO. This moves my peak oil estimate to the future by a couple of years probably 2025 to 2029 with a best guess of 2027. If the USGS f95 estimate proves closer to reality, then my original 2023-2027 estimate with a best guess of 2025 would remain valid. In any case 2019 or 2020 will be a temporary plateau in World output where oil prices will rise and eventually bring on more investment and output, leading to a rise in World output over 2021 to 2025, with a final plateau around 2025 to 2027.

            2. Sigh. I can’t seem to make the point. West Texas can’t handle that level of production. Looks good on paper, but it can’t happen. I don’t care how many pipelines and new ship channels you build. You can’t make gold out of a sow’s ear. It took over a hundred years to get the first 30 billion barrels out. You are expecting it to almost double that in seven years, with more activity required per well than conventional. Totally unrealistic.

            3. Guym,

              Permian basin output would be about 7 Mb/d in 2026 under the mean ERR scenario. Currently it is about 2750 kb/d (Oct 2018). In the past 8 years output of tight oil in the Permian basin increase by about a factor of 10. The oil can be shipped to the East and West coasts if there is not enough port capacity, or refineries might retool to handle the lighter crude. Capacity needs to be increased by a factor of 2.5 over a 7 year period, (if the peak is 2025), perhaps the peak will be later for the Permian due to pipeline constraints.

              Supposedly there is 2.5 Mb/d of pipeline capacity coming online by 2020, increasing pipeline capacity to about 5.5 Mb/d, another 1.5 Mb/d would be needed by 2025. Can’t find good information on port constraints but I imagine that problem will be solved. My sense is that Texans are pretty good both at getting oil from the ground and getting it to customers, and will find a way to get it done. I am not suggesting it will be easy, but surely possible.

            4. Ok – so, it’s the Permian or bust I guess. Even though the majority of these companies don’t seem to be able to make a profit. I’m sure it will work out fine…

            5. Permian basin output would be about 7 Mb/d in 2026 under the mean ERR scenario. Currently it is about 2750 kb/d (Oct 2018).

              According to the EIA drilling productivity report:
              ———- Permian
              Jan-18 2,843,343
              Feb-18 2,993,998
              Mar-18 3,148,299
              Apr-18 3,202,219
              May-18 3,221,254
              Jun-18 3,353,515
              Jul-18 3,391,016
              Aug-18 3,472,074
              Sep-18 3,526,808
              Oct-18 3,575,119
              Nov-18 3,632,294
              Dec-18 3,694,958

              Dennis, why are your numbers so far removed from those of the EIA?

            6. Guym,

              Also the 60 Gb is not produced in 7 years, it is about 20 Gb over 9 years (2018-2027), about 4.8 Gb was produced up to Dec 2017, another 35 Gb is produced from 2028 to 2080. That is for a medium scenario with a maximum of 727 wells completed per month in 2026, a rise of 327 new wells per month from the rate in Oct 2018 of about 400 new wells per month an average increase of 41 new wells per month each year from 2018 to 2026, in 2017 the increase was about 120 new wells over that year. It could be slower than this rate I just picked a number based on history which is 3 times lower a rate of increase relative to the recent past.

              I showed elsewhere that even a flat completion rate at 400 new wells per month will keep Permian output increasing, but at a slower rate. At a low price level that would be realistic, but I do not think a low oil price level is a realistic assumption.

            7. A flat completion rate will not continue to provide growth in production. It will eventually decline.

            8. Ron,

              I use the EIA’s tight oil production estimates by play. The DPR gives estimated output from the Permian “region” and includes conventional oil produced in that region.

              My focus is on tight oiland I have never thought the DPR model was very good, so I mostly ignore it.

              Page for the tight oil estimates is below

              https://www.eia.gov/petroleum/data.php#crude

              Numbers from Jan to Oct 2018 below, my 2750 kb/d was from memory and might have been an earlier estimate that was revised, also note that EIA estimates might be a bit high based on Guym’s analysis, (he thinks 400 kb/d in Sept, my guess is more like 150 kb/d), though we don’t (or I don’t) know how much of this is Permian basin tight oil output (surely not all of it). For August the number was 2860 kb/d and it may have been flat since then (EIA estimates are often revised).

              2217
              2342
              2494
              2553
              2581
              2715
              2780
              2861
              2944
              3029

              For Aug 2018, if DPR estimate is correct and EIA tight oil production estimate is also correct then conventional Permian output was about 611 kb/d. That takes care of much of the discrepancy. An earlier EIA tight oil estimate for Sept was 2870 kb/d which has since been revised higher. So my memory was off by 120 kb/d (4%), oh well.

  13. I know this is not an investment site, but I’d like some opinions on why oilfield services companies have been such a terrible investment over time.

    The level of activity has been very high onshore US, yet they can’t seem to make it work.

    SLB and HAL have been a couple of the worst S & P companies share price wise over the past twenty years. If you bought them at their 1997 highs you would be underwater.

    Weatherford International has been around for decades. It is trading at .50.

    Nabors Industries is the largest onshore drilling company in the world. It’s stock is at $3. It was $12 in 1979.

    I have been following a company that IPO a couple years ago, Keane Group. They have 25 frack spreads in the major shale basins, primarily Permian. They are all active. Yet share price, which IPO in $20s is now below $9.

    The upstream shale E & P have been bad since 2014, which makes sense. But the service companies could be the worst group in any industry over the past 20 years.

    1. They are the service companies for E&Ps. Price per service negotiated down to the lowest level that can be paid. If, and when, E&Ps make money, the other should follow. Not looking good for them for the next three quarters.

    2. Spent some time on it. HAL looks like XOM over a 5 yr period. 41% decline vs XOM’s 17%. Most of that differential is this year, since DUCs became an acronym anyone has heard of — though it’s an HFT driven exercise with 25% of total market shares of the world held by SWFs and controlled by maybe 10 guys managing that money — so don’t presume earnings decide stock price.

      It’s not a market. Hasn’t been since 2009.

  14. Have asked before, no reply.

    Where did America’s oil come from? Western Interior Seaway. A good picture on the wiki.

    But I’ve never found a picture of where Russia’s oil came from or where the Middle East oil came from.

    There’s an outfit called deeptimemaps.com. They do not look free. I’m hoping for a free source.

    1. Hi,

      Try this, this is a detailed study of origins of mid-Cretaceous oil in the Saudia Arabian region.
      https://prism.ucalgary.ca/bitstream/handle/11023/1312/Ucalgary_2014_AlGeer_Ranya_2.pdf
      Also USGS source:
      https://pubs.usgs.gov/bul/b2202-h/b2202-h-508.pdf

      China and world oil try this.
      https://www.researchgate.net/profile/Ruofei_Yang/publication/263858345_Cretaceous_source_rocks_and_associated_oil_and_gas_resources_in_the_world_and_China_A_review/links/576f8ead08ae621947470e49.pdf?origin=publication_detail

      Russian oil
      https://pubs.usgs.gov/bul/2201/G/B2201-G.pdf

      Probably might not be exactly what you are looking for but useful resources nonetheless.

      1. Nah I want the ancient map, like on the Western Interior Seaway wiki, but those are great links. The Canadian one is amusing — calls it the Arabian Gulf, not the Persian Gulf.

        The Russia one is dated 2003 but lists a LOT of different shales, not just the Bahzenov that got so much attn a year or three ago.

        1. Yea i know what you mean. It is hard to find a Cretaceous map of the specified areas. Let me know if you find anything. I am curious to see it too.

    2. Watcher,

      Broad reply for Mideast oil: carbonate continental-shelf platforms flanking Tethys, the seaway that lay between Eurasia and both Africa including the Arabian peninsula, and India, before they ran into Eurasia thereby closing Tethys (a big part of it at least).

      Maybe looking for maps of Tethys during the Cretaceous would be helpful.

  15. Dec 8 (Reuters) – Saudi Arabia’s crude oil exports are expected to drop next month by some 1 million b/d from Nov level (7.3+1=8.3) two sources familiar with the matter said on Sat. The world’s top oil exporter is expected to ship about 7.3 million b/d in Jan.
    https://www.reuters.com/article/saudi-crude-energy-opec/update-1-saudi-oil-exports-seen-down-1-mln-bpd-in-jan-from-nov-levels-sources-idUSL8N1YD0EU

    Chart https://pbs.twimg.com/media/Dt-AbKrWkAASOJd.jpg
    I’m guessing they’re supplying peak seasonal demand in Asia plus oil ordered before the waivers were issued?

    1. The World will move beyond oil leaving Russia, the US, and Saudi Arabia as second rate powers (already the case for two of these three nations).

        2. Russia is underpopulated. This will always place a country at risk, especially when it borders a country that is not.

          Go have a look at Russia’s life expectancy, particularly the difference between men and women. And before you leap to declare this is vodka be aware that a study indicated that it is not vodka as the reason, the reason is not known.

          Russia is and has been for some time the only way to put people on the international space station and bring them home. Think about that the next time you visualize Russia as a backwards society.

          Don’t measure Russia in dollars or even in rubles. They produce far more oil than they consume, their population grows (despite that life expectancy), and they have no problems with food. This is another country that at any point in time could decide to leae the oil underground for their grandchildren.

      2. Dennis, should we start making Darwin awards trophies for rogue states not wanting to follow the IPCC?

  17. Ugo Bardi has published a letter from Colin Campbell on his blog: https://cassandralegacy.blogspot.com/2018/12/peak-oil-20-years-later-comment-by.html

    “There is accordingly much uncertainty about the date of the peak of all categories of oil, which is imminent, but it misses the point when what matters is the vision of the long decline that follows it.”

    He has written this numerous times. I think he raises a valid point. What happen if/when the mindset in societies switches from BAU=growth, expansion etc. to BAU=stagnation or decline?

    1. If you target certain population declines, everyone else won’t hurt much for a fairly long period of time.

    2. Yeah, I don’t really care about the accuracy of peak oil. It’s the lack of planning for it that I find troubling. I think converting the world to renewables would create a growth industry, but other than that I see nothing on the horizon which might produce continuing economic growth. New inventions have produced productivity gains in some areas, but I’m not seeing anything along the lines of a transformative boost to civilization.

      The end of the oil age is in sight and we need to think what comes next. If renewables can’t power the world as well as fossil fuels, so be it. Find ways to adjust to what we have to work with: conservation, increased efficiency, fewer activities that are energy hogs, creating fewer goods which we don’t need to keep us alive, changing our diets to foods requiring less energy, etc.

      1. Peak oil exports happen back in 2006 at 37.87mbpd. On a global market there is less oil available today than there was back in 2006. It’s currently not much less still above 37.00mbpd i believe. Asia imports is about 26.7mbpd 2017. Asia production is about 7.9mbpd. Europe imports about 11 mbpd. Europe production about 4 mbpd. Now if your China you’ve been able to increase your imports due to the US decreasing their imports. Because obviously without shale oil US is still importing the lion’s share of that 37.00+ available for exporting. China will be targeted for oil consumption decrease. I have to believe that is exactly what is happening today. Trade war and interest rate hikes at the end of a credit cycle.

      2. I think the current generation of CEOs, economists, politicians, management consultants etc. would have to be replaced before it’s accepted that growth depends on cheap natural resource availability rather than clever management strategies, and on their way out they will probably cause increasing damage to the environment and society in trying to implement policies based on, and trying to support, their incorrect views.

  18. Libya down nearly -400 kb/day if this persists…

    Dec 10 (Reuters) Libya’s National Oil Company (NOC) has declared force majeure on exports from the El Sharara oil field, it said on Monday, after tribesmen and state security guards seized the facility. NOC said in a statement the shut down of its biggest oilfield would result in a daily site production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield.
    https://af.reuters.com/article/idAFL8N1YF0W0

  19. December 7, 2018 (Rystad Energy) Since 2014 global jackup utilization has fallen from almost 80% to around 55%, where it has remained quite steady over the last two years.
    Chart: https://pbs.twimg.com/media/Dtz2TqRWsAAvqRl.jpg
    *Global jackup utilization, as illustrated in the chart, includes all rigs inclusive of cold stacked units. As such, this is not to be read as “marketed utilization”.
    https://www.rystadenergy.com/newsevents/news/press-releases/fs-global-jackup-utilization/

  20. Okay, so undiscovered is really discovered:

    The Real Implications Of The New Permian Estimates

    The USGS qualifies the figures of their massive discovery as consisting of undiscovered, technically recoverable resources, which they define as, “those [resources] that are estimated to exist based on geologic knowledge and already established production, while technically recoverable resources are those that can be produced using currently available technology and industry practices. Whether or not it is profitable to produce these resources has not been evaluated.”

    And there may be even more undiscovered resources that still undiscovered. Errr, or something like that.

    Now, in addition to this stunning discovery from the USGS, there is even further hope that there are still additional technically recoverable resources lying in wait, yet to be discovered.

    And there is a chart at this link that each field down to the exact million barrels how much oil they discovered is undiscovered. But before you start cheering…Whether or not it is profitable to produce these resources has not been evaluated.”

    1. Lol. It gets even more confused, if you look at initial completion rates on the RRC site. It goes from, “wow, impressive”, to “they are going to lose their posterior on this one”. There is no standard or average. If you extrapolate based upon the average, now, you ain’t too smart. But, that’s what they did initially in the EF, and what they are doing now in the Permian. Initial completion rates are often misleading. Shale wells defy the concept of average. Like, there is no average person.

      I don’t think they will get nearly as much out of the Permian, as they think. But with my track record, I have to give that estimate a confidence level of plus or minus 5%.

    2. It looks like the mean estimate is it would take 177,000 wells to recover this oil and NG.

      Some fairly rough calculations indicate these reserves aren’t such without at least $80 WTI, on the whole.

      1. That ain’t so bad. That’s only about 1.77 trillion dollars in capex. Or, a lot more debt. Mr Rogers says, “kids, can you say bubble?”.

        2. GuyM.

          Really interesting to me that, despite the intensive development of US shale, the service companies that are tied to US shale are universally performing badly financially.

          It appears any activity slowdown will lead to some service company BK’s. I’d say Weatherford, Nabors and Parker Drilling are in big trouble, and these are not insignificant companies.

          SLB is now at 2009 lows!

          Shale is a menace financially to the US upstream industry it seems.

          1. “Unless oil prices rise above $100 a barrel again and stay there, it is difficult to foresee a future in which the US shale oil industry continues to produce oil at the pace various government agencies are predicting.”

          2. The most comical reverse split in the service space is the 100 for 57,009 reverse split of Basic Energy Services, symbol BAS.

            The stock is at $5. If you bought at the high, you would have paid split adjusted $20,000 per share.

            I think Mike and our family should get some credit for not having went belly up yet, given how awful the whole sector has performed over the past several years!

            Donald is making a mistake with regard to the US economy, wanting very low oil prices, as can be seen by the stock market cratering, similar to what it did in 2016.

            The Smoot Hawley esq trade policies aren’t so great either.

            Again, THIS IS NOT 2005.

            1. This is not 2005. The “everything bubble” is inflated far more than 2005. When they release some hot air – there won’t be much money left for lending to shale companies.

              Production can crash much faster than 2015 when there is no money.
              And then we’ll see 100$+ oil fast, even in a recession. Demand doesn’t go down that deep and fast in a recession.

            2. It will be interesting to see what will happen to rig count and completion rates with well head prices in the $30s and low $40s, or lower.

              I assume “oil” rigs drop to 300 we could see a couple million BOPD drop 6-12 months later?

      2. The recent USGS Delaware assessment is politically motivated; there is no doubt in my mind. Much the same as the EIA constantly over exaggerates oil production…the “agenda” is to keep oil prices low, OPEC scared (its not), Wall Street engaged and the shale oil industry going wide open with people that don’t know squat about the oil business cheerleading for it. The Director of the USGS is an appointee; read his nomination comments about science and politics, then read his comments about the Delaware study giving America a bigger chance at “energy dominance.” The American shale oil industry has not even been able to pay for what its already produced; who in the world are we trying to “dominate?” The combined national debts of Russia and the KSA are a little over what total public and private shale oil debt is in the US. Google it.

        The USGS itself says it will require over 318,000 wells (laterals) to recover this imaginary oil and I place those actual costs well over $3 trillion, with a ‘t.’ Moreover given the bench EUR estimates most of that imaginary oil will require $150 to remotely be economic. One can “science” technically recoverable, as yet undiscovered resources all they want, it is essentially still guesses and meaningless ones at that.

        As someone genuinely interested in wanting America to understand the oil business better I regret the drama this USGS study is creating and how, and why it is so misleading. Reserve estimating in America has now reached an all time low that would make even the Middle East look honorable.

        1. Thanks Mike. I now feel a lot better about my assmessment. When I see one chart that says from .6 to .8 billion BOE have been discovered, yearly, worldwide, in the last three years, then the USGS says they just found 44 billion barrels of unidscovered oil, in one basin, it just doesn’t pass the smell test.

        2. Mike. I think the guy that made the energy dominance comments was Ryan Zinke, who is Secretary if the Interior, of which USGS is a part. He appears to be a very political guy and finds his way into controversy.

          The USGS director doesn’t look to be so political in comparison.

          I am glad you corrected me on the number of wells total. Probably $4 trillion to recover that oil, exclusive of LOE, royalties, severance taxes, etc. Doesn’t compute at $40 oil. Not even at $80 oil.

          1. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
            Jim Reilly, USGS Dir. https://oilprice.com/Energy/Crude-Oil/The-Real-Implications-Of-The-New-Permian-Estimates.html

            Zinke said “Christmas came early this year,” for Wall Street, I guess. The USGS report was like a full page add for the Permian oil industry in the NYT, free, at tax payers expense.

            I need to quit. I am starting to sound like a Democrat.

            1. Jim Reilly, USGS Dir : “these resources are located and how much exists is crucial to ensuring both our energy independence”

              Jim is not aware that word ‘independence’ contains the word ‘dependence ?

              Nobody is independent, and nobody is depended in this world. Only interdependence exists. These guys are all politicians just throwing slogans left and right.

        3. Mike- ” The American shale oil industry has not even been able to pay for what its already produced; who in the world are we trying to “dominate?”
          You know, Women. And umm.Brown people. Non-believers. Vegetarians. Good- looking people, and people from the coasts. Those who are too wealthy, or too poor, or who don’t have guns. Those who don’t pray… pray right that is. Those who don’t have a lifetime subscription to Fox news. And certainly those who know what CO2 is. Got to dominate them all.

        4. Mike,

          The EUR estimates for the benches are an average for all wells drilled and may be based on older data. The current $9.5 million wells produce about twice as much as 6 years ago due to longer laterals, more frac stages and higher levels of proppant. For my medium ERR scenario with 60 Gb of cumulative output and 175,100 wells drilled, the average well has an EUR of 336 kb, this is because I assume EUR decreases after 2023 (for the mean case).

          Chart below shows my scenario for average new well EUR for the Permian medium ERR case, the rate that EUR decreases depends on well completion rate as completion rate decreases as wells become less profitable at lower EUR the rate of decrease in EUR slows over time.

  21. December 10 (EIA) U.S. liquefied natural gas export capacity to more than double by the end of 2019
    The EIA projects that U.S. liquefied natural gas (LNG) export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world behind Australia and Qatar.
    https://www.eia.gov/todayinenergy/detail.php?id=37732

    1. We are racing to see just how fast we can exhaust the supply. Better extract and sell what you can before the credit systems grinds to a halt.
      Could new wells be drilled and completed current prices, and an interest rate on capital loan of 7%?

      1. Hickory.

        In 2015-17 the number of uneconomic wells was staggering. Economics didn’t make much difference in 2015-17.

        Company EPS for those years doesn’t tell the whole story. A lot still needs to be written down with regard to unit cost depletion. I think the companies are able to delay taking those until they either sell the uneconomic wells or until they are P & A.

        I’d say energy lending now is much tighter than before the previous crash of late 2014. So, as the cash flow disappears, we could see a quick cessation of activity.

        Wonder what laying down 500 rigs and as many completion crews, truck drivers, sand miners, etc will do to US GDP. Maybe cut as much as 1% off, so 2.5% GDP becomes 1.5% GDP?

        As to economic wells at current Permian and Bakken prices, most won’t payout within 60 months even if you pay cash.

        It looks like the USGS midpoint assessment calls for EUR of 264K BO per well? That is just 198K BO to the operator after a 25% RI, over the life of the well. At current Permian prices maybe $8 million of income over the life of the well BEFORE paying LOE, severance, proportionate G & A, etc.

        Think Donald could understand a simple payout model? I’d say the shale guys may be in big trouble this time next year if we’ll head prices stay below $45.

        1. It’s those “drill or kill” covenants in everything from the lending to the leases of the frack operators. Combined with the need to service all that debt when the well you took it out for is no longer meaningfully producing (debt doesn’t get repaid in two years…) and there is an awful lot of uneconomic drilling.

        2. Shallow sand,

          Note the USGS estimate is for all wells in the basin. Average Permian EUR is currently 420 kb per well (2017 well completions). So figure your payout numbers based on that, EUR is likely to be this level or higher until 2023 and then will gradually decrease over time while oil prices will increase due to scarcity relative to demand for oil.

          Chart below gives my ERR estimates based on AEO 2018 reference il price scenario. If we assume a lognormal probability distribution then the one sigma range is 46-77 Gb with a mean of 60 Gb for ERR (this is assuming the F5 to F95 range is a 2 sigma range for a lognormal probability distribution).

          If the lognormal assumption is correct, this suggests a 68% probability that ERR will be 46-77 Gb with an equal 34% probability it will be 46-60 Gb or 60 to 77 Gb. Most here think it will be 46-60 Gb or perhaps lower, my guess would be 50 to 70 Gb.

          On $45/b oil, the price needs to be at least $60/b and probably more like $75/b for the average well to payout, but just like in the previous downturn the oil companies will focus on the sweet spots for any completions and we may see “average” well EUR increase a bit due to high grading, this just moves the date when EUR will start to decrease to an earlier date as all the sweet spots will be fully drilled at an earlier date.

          The shape of the output curve changes a bit in response, but the area under the curve may remain the same (total cumulative output or ERR).

            2. Mike,

              Before the new USGS assessment came out I figured about 30 Gb ERR for a medium case scenario where I assumed the TRR for the Delaware basin would be 8 Gb, so pretty similar to the Low TRR scenario above. Does the low case seem reasonable, if one assumes the AEO reference oil price case? What do you think the URR of the Permian basin might be, I know it is something less than 50 Gb, but that might be 10, 20, 30, or 40 Gb?
              Note that I assume a 9.5 million well cost in 2017$, that is well cost increases at the rate of inflation so that “real cost” in constant dollars remains fixed. The 2017-2023 well profile is an Arps hyperbolic with month 1 at 45% of q(t) and q0=30181, Di=0.313 and b=1.04, exponential decline for tail at 10% annual rate starting after month 107 (about 9 years). If the well is shut in at 9 b/d output then EUR is 422 kb, if 12 b/d at end of life then 410 kb EUR.

              For low TRR case debt is paid back in full by 2028 and cumulative net revenue is $240 B in 2017 $ by 2040 and rises to $320 B in 2017$ by 2050, cumulative output is 33.5 Gb in 2050. This assumes annual interest rates of 8% (nominal) on debt. Debt estimated at $115 B in Oct 2018.

  23. The Wall Street runs at least one oil article each day.

    This was from one from Wednesday.

    ———-

    Chris Dun­can, an en­ergy an­a­lyst at Bran­des In­vest­ment Part­ners who helps man­age $28 bil­lion in di­ver­si­fied as­sets, said he usu­ally ig­nores com­pa­nies’ claims about the price at which their wells break even.

    “You al­ways scratch your head as to how they can have these well eco­nomics that can have dou­ble-digit re­turns on in­vest­ment, but it never flows through to the to­tal com­pany re­turns,” he said.

  24. Guys, money is a substance created by central banks from thin air. It doesn’t even have to have GDP underpinning. Mario Draghi and Bernanke/Yellen/Powell no longer pay attention to history. In history, you created money because an economy needed it. Since 2009, it is created to try to encourage economies to need it.

    This is the substance you use to evaluate flow of oil. Of course one understands why, because that comes from a lifetime of experience of “how it all works”, but it really is created from nothingness and when necessary, will have nothing at all to do with flow. Hell, it already doesn’t have anything to do with flow. Shale oil flows regardless of money. BTW, don’t think there will be some sudden realization that there is no profit and the loans won’t be repaid. Nothing like that will happen. It will flow because it has to flow. Some thought contortion or some redefinition of whatever will happen so that flow can continue without an overt and obvious elimination of capitalism in the industry.

    (Remember, the Fed bought all those mortgage backed securities when mark to market said they were worthless. Someday when you want to waste time, try to look up what price they paid . . . not in total, but per security. That happened but we still pretend capitalism is intact.)

    There will be no oil alternative. There will be no replacement. There will be scarcity. Grinding, crushing scarcity. Society will react to that. It won’t be a cooperative reaction, because that is unhuman.

    1. Watcher, you are among the few ones, like Peter, that has a good grasp of what the new economy after the Great Financial Crisis is about.

      Money or price will never be a problem to the flow of oil. The problem is cost in economic units (labor, resources, materials, energy) to pull enough black stuff from harder and scarcer places. So the only parameter that is worth tracking is oil production, because everything else, even economic output, follows oil production. As a bigger part of the economic output is directed to fight diminishing returns from lower EROEI oil the system will approach critical failure. Our only hope would be a rush to nuclear and pray that we can maintain the system with an imperfect substitute. Renewables are a death trap in energy terms.

      I maintain that we are already at Peak Oil. By the end of 2015 we entered an undulating plateau on which we still are. Vigorous growth in oil production is no longer possible as the drag from legacy decline gets stronger over time. Chances are we will leave the plateau in a few years to start the decline at the other side of Peak Oil. The actual month of maximal production is irrelevant.

      1. Can’t even track oil production. The liquid has changed its nature. The API density of shale oil is not the same as conventional oil. You can do diluent things, and you can refine low diesel oil one place and high diesel oil another place, but this was not particularly required in the past. It changed, but we still call the liquid oil and we draw graphs as if it were the same.

        The standard of standards, WTI, is not the same density liquid that it used to be. An astonishing no one seems to care about this.

        Definitions will change. Uncomfortable realities will be obfuscated. And the only indication of peak you are going to get is when tankers enroute somewhere else get confiscated by force.

        1. There has always been a range of oil weights.
          The light oil was once sold at a premium as it was cheaper to refine. US refineries are now set up for heavier crude because that was what was available. Probably not worth retooling for 100 Gb of tight oil as this is a drop in the bucket compared to the 2000 Gb of resources Worldwide (including 400 Gb of extra heavy oil).

  25. https://oilprice.com/Energy/Crude-Oil/Analysts-Output-Cuts-To-Balance-Oil-Markets-In-2019.html

    Lol, yeah they will be real balanced. Add to the two million reduction in supply about one million that won’t happen by the US in 2019, and a wag of around .6 million in non opec declines, and we should be in really great shape on the balance. I’m not taking any tightrope instructions from these experts. I think we were pretty close to balance before any cuts. Then there is whatever demand increase that will happen in 2019. This next year should be really interesting.

      1. Yeah, they will be buying from us again, too. We will get to see what the real maximum export capability of Texas ports are soon.

    2. Yes, I agree logic can not apply to there being a glut ahead now. I may have been too optimistic about the world market balance in 2017 (which nobody is sure about btw, and that includes EIA and IEA). Core OPEC was targeting OECD and not at least US inventory (reduced exports) through their export policy to hide that the market probably was in balance or even in slight surplus. In 2018 there is almost no chance that the balance from a oil producer perspective did not improve, Venezuela and some offshore regions made sure of that. But strong forces then reversed the export policy of OPEC, and it has “seemed” erroneously (my claim) recently following the trend in OECD inventory that the market is actually in a surplus. Very few chances that it is not going to be a major deficit in 2019, and too late to prevent some kind supply shortage eventually. I am hesistant to say it is peak oil yet, because it can be prevented by allocating a lot of capital to unstable countries (not western) that have not yet fulfilled their potential at some point. But if it is actually going to happen?, anybody’s guess.

      I thought the Schlumberger presentation Dec 4th was a real good read. One of the very few sources coinciding with my view of the oil market, and a good update on Saudi Arabia as well.
      http://investorcenter.slb.com/phoenix.zhtml?c=97513&p=irol-presentations

      There is a combined Ghawar and Khurais infill program to counter declines in 2019 and it last 3 years with 400+ wells where Schlumberger is a major part of it. 25 rigs mobilised at Ghawar alone recently. I guess they can fight declines for a while. But after this 3 year period I am afraid to say it is game over for KSA with a terminal decline in place most probably given lack of better prospects. That is if infill drilling is their only solution, and the neutral zone looks even more unlikely (as news from Kuwait recently suggested..google the source if you want to, can’t find it right now). After this ridiculous effort to hold up oil production by lowering oil prices comes to an end, the focus will be a race to increase natural gas and renewables as replacement for oil. It doesn’t mean a world of hurt for most for a lot of years, but eventually it is a question mark of how much energy per capita we can bring about. I have no answer, but will be long gone before the biggest serious problems surface I guess.

      1. “There was a surge in hydraulic fracturing in the second quarter, especially in the Permian. This activity surge leveled off in the third quarter, and is dropping in the fourth quarter, which will show up in the first half production numbers for 2019.”
        I guessed flat, and they are predicting a decline. Don’t think I will argue with this company. See EN’s post below. Absolute garbage, and intentionally misleading, by now.

        EIA, where’s the fxxxing beef???!! You scummy xxsed lying sack of XX it! How does this square with your phony STEO projections? Absolute garbage, and intentionally misleading, by now. I gave them the benefit of being over optimistic, before. Now, I can’t give that benefit. They are either intentionally doing it, or they are positively dim witted. There is a massive amount of information out there that activity has slowed, or declined, and yet they persist in making it increase. Why hasn’t the press picked up on this yet? Oh, that’s right, they are dim witted.

        1. Guym,

          The Dec STEO forecasts a 600 kb/d increase over the next 12 months. About half the rate of increase of the past 12 months. It might be less, what is your expectation for US output over the next 12 months? Do you expect flat output? As pipelines progress completion rates might increase. The current completion rate is high enough to keep output increasing through 2023.

          1. Dennis, your lost in the EIA BS. According to RRC data and Schlumberger, it’s decreasing. Until they can up ship leadings, regardless of pipelines, it will probably remain flat.

          2. I think 600,000 bpd increase over the next 12 months is reasonable. The increase in shale production has to slow down, and soon. Perhaps the EIA now realizes that.

  26. 2018-12-11 (EIA STEO) EIA estimates that U.S. crude oil production averaged 11.5 million barrels per day (b/d) in November, up 150,000 b/d from October levels because of platforms resuming normal operations after hurricane-related outages in October.
    https://www.eia.gov/outlooks/steo/

    Chart showing the new December forecast compared to the prior November forecast
    https://pbs.twimg.com/media/DuJ0qjqW0AAYcyv.jpg

    Chart comparing: 914 Survey, STEO, Weeklies
    https://pbs.twimg.com/media/DuKTf3QWwAYtos7.jpg

  27. I posted this on the other side but, thought some people here might be interested in how the author arrives at the third point in the summary below, “EV penetration into the global auto fleet should initiate an oil glut by 2023. Shale oil (high extraction cost) operations should become stressed first.” From a reference to this over at insideevs.com. Haven’t had time to read it yet but, thought others might want to go through it in the meantime. The guys at insideevs.com appeared to be impressed with the quality of the article:

    EVs, Oil, And ICE: Impact By 2023 And Beyond

    Summary

    This article explores the timings and various impacts of EVs on Big Oil, and the ICE automotive industries, including shale oil plays, Ford, GM, Tesla, Rivian and others.

    I find that ICE auto sales will drop 50% by 2025. Passenger car sales are down already with SUVs and Pickup sales to follow with Rivian and Tesla entering the space.

    EV penetration into the global auto fleet should initiate an oil glut by 2023. Shale oil (high extraction cost) operations should become stressed first.

    By 2031, there will be ~1 billion EVs in the global fleet of cars. This timing is 2 decades faster than many analysts are projecting.

    Caveats: Dramatically lower oil prices will delay these projections and operational autonomous vehicle control will accelerate them. Some companies will soar, others will collapse.

    1. Hopefully, some of that will be true, because by that time the world will be in serious withdrawal pains from oil.

    2. Essentially crap. The SeekingAlpha author is a solar wacko safely ignored.

      1. Disagree 100% with watcher.

        Estimate is a bit optimistic, I would move his 2025 to 2030, but the analysis is essentially correct in my opinion.

      2. Watcher, take off your blinders and look at the world. Year 20 corresponds to 2035. Total car growth rate set at 3% against EV logistical function with initial growth at the current 50% growth rate.

        1. What does those X axis numbers represent? Years? If so, which years. I am all for EV’s taking over the world but this chart is bullshit.

          Yes, passanger car sales are down but the increase in truck and SUV sales more than make up the difference. I find the article is wildly optimistic. And I am a man who would like to see renewables completely displace fossil fuels. I just don’t believe it will happen, not anyway soon anyway.

  29. If American drove cars with the fuel consumption of Europeans, the United States could use 8 Million Barrels a day less. The United States consumes 20 million barrels of oil per day.

    https://www.eia.gov/outlooks/steo/report/us_oil.php

    Average fuel consumption is 25mpg (us gallons i assume)

    https://www.reuters.com/article/us-autos-emissions/u-s-vehicle-fuel-economy-rises-to-record-24-7-mpg-epa-idUSKBN1F02BX

    In The U.K. average fuel consumption is 52mpg or 43mpg us gallon

    https://www.racfoundation.org/motoring-faqs/environment#a22

    New York times have done comparison graph of how bad the U.S is lagging behind.

    https://www.nytimes.com/interactive/2018/04/03/climate/us-fuel-economy.html

    By simply driving the same vehicles as Europe, the United States would save itself $180,000,000 every day not importing oil from other countries. Instead it could export least 3 million barrels per day. I guess Americans are happy enriching Saudi princes and corrupt Nigerian politicians.

    1. So you are suggesting the United States should switch from cars that burn gasoline to cars that burn diesel? Pretty sure there is a shortage of oil with the right API density for the US to simply drive the same vehicles as Europe. I’d also say it’s more likely for Europe to switch to cars that burn gasoline moving forward as diesel scarcity becomes more evident.

      1. No what I am suggesting is that Americans stop buying the biggest vehicles they can afford and start buying the most fuel economical.

        When peak oil happens every country will be in a bidding war for the fuel it needs. The countries which are most efficient will be better placed adapting.
        Once US shale peaks most Americans will see gas guzzling vehicles as a foolish luxury.

        Since most commutes are under 15 miles, most plugin hybrids can get people to work and back solely on electricity.

        https://cleantechnica.com/2018/01/04/plug-hybrid-electric-vehicles-available-purchase-usa/

        Driving only these newer cars the US could get buy on 7-8 million barrels per day.

        Leaving $700,000,000 per day to spend on more important things than feeding big cars.

  30. For anyone who watches the weekly US inventories – Canadian pipeline imports could be lower due to a power outage. Also 3 VLCCs loaded at LOOP.

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