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Topic: US Oil  (Read 373 times) previous topic - next topic

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US Oil
WTIC looking bullish on all TF's IMO.



For Entertainment Purposes Only.

Re: US Oil
Reply #1
Oil supply in the US comes roughly half from shale formations and that is not good reservoir rock due to its very low permeability of high resistance to flow within the matrix rock. While horizontal drilling and hydraulic fracture treating open massive formation surface to the wellbore that gives the appearance of a good well because it results in a high initial production rate, eventually the oil has to flow through ever greater distances of reservoir rock to get to the wellbore. The result is the very steep decline rates identified in the linked article. While the reservoir characteristics I just detailed are mossing from the article, the rest is pretty complete. What this means is US oil independence is going to be short lived and with low oil production, one can expect higher prices. It is worth noting that the author of the linked article has published elsewhere in his blog that oil prices will drop with dwindling supplies and openly states supply and demand is replaced by cost to produce. That argument is easily refuted, but that is for another post.

https://srsroccoreport.com/trouble-at-mighty-exxonmobil-adds-record-number-of-shale-wells-in-the-permian-while-production-plateaus/

Re: US Oil
Reply #2
BO and retest
For Entertainment Purposes Only.

Re: US Oil
Reply #3
Oil will hit 88 at some point.

For Entertainment Purposes Only.

Re: US Oil
Reply #4
Based on the thinking in reply 1 above, oil will not likely stop going up at $88/bbl.

  • sn00p
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Re: US Oil
Reply #5

Re: US Oil
Reply #6
Crude oil and oil producer stocks are taking it on the chin as a result of the coronavirus. The XOM chart below suggest the carnage is not over and news reports are not signaling an end in sight either. Oil and the stocks will rebound, but IMHO we need to see progress on the virus before there will be a meaningful bounce as government orders to slow its spread are crippling for the economy thus crippling for oil consumption. This logic extends to base metals in all probability.



Longer term share price is at the bottom of the 2 sigma channel but fundamentals suggest waiting to get in may be prudent and for information, dividend yield is over 6%: