Saudi's wish they never started this fight

[JustRalph]

http://www.telegraph.co.uk/business/2016/07/31/texas-shale-oil-has-fought-saudi-arabia-to-a-standstill/

US oil up to the challenge. Texas beating them at their own game

[tucker6]

Great find. Quotes from the article.

"Definitely we can compete with anything that Saudi Arabia has. We have the best rock," he said. Revolutionary improvements in drilling technology and data analytics that have changed the cost calculus faster than almost anybody thought possible."

"the Permian is as bountiful as the giant Ghawar field in Saudi Arabia and can expand from 2m to 5m barrels a day even if the price of oil never rises above $55."

"Consultants Wood Mackenzie estimated in a recent report that full-cycle break-even costs have fallen to $37 at Wolfcamp and Bone Spring in the Permian, and to $35 in the South Central Oklahoma Oil Province. The majority of US shale fields are now viable at $60."

"Today's frackers can just about cope with oil prices in the $40 to $50 range."

"This sets the stage for an oil shortage and a price spike later this decade. Whether Opec can survive that long is an open question. Most of the cartel need prices of $100 to fund their regimes."

[delayjf]

So much for "Peak Oil"

[Parkview_Pirate]

Oil news more slanted than most. How quickly the tide turns - from 4 days ago in Bloomberg:

http://www.bloomberg.com/news/articles/2016-07-28/-60-is-the-new-50-for-u-s-oil-drillers-contemplating-rebound

For U.S. oil drillers, $60 is the new $50.

Earlier this year, oil and natural gas companies facing the worst slump in a generation said they’d need crude to reach $50 a barrel before resuming drilling. This week, despite higher prices and lower costs, the industry has raised the bar, signaling it will take $60 or better before meaningful production can resume.

Below $55 a barrel, about half of U.S. oil production is “uneconomic," according to Fadel Gheit, an Oppenheimer & Co. energy strategist in New York.

[tucker6]

Oil news more slanted than most. How quickly the tide turns - from 4 days ago in Bloomberg:

http://www.bloomberg.com/news/articles/2016-07-28/-60-is-the-new-50-for-u-s-oil-drillers-contemplating-rebound
I don't see a lot of different between the two articles. They say much the same thing but are discussing two slightly different things. The OP article was focused on cost and breakeven. Your article was focused more on profitability prices. Based on my reading of the two documents, I can see where both stories can be factually correct. They're even quoting some of the same people.

[lamboguy]

crude under $40 per barrel this morning. i have never seen oil drop before labor day ever that i can remember.

in January 2016 oil went as low as $24 never hit $20, 2017 might be different though, demand seems to be lower now. my ultimate price target for oil is ZERO. hard for me to even believe though, and seems quite impossible, but that is how the world turns, i never thought Polaroid would be out of business either. these things are tough to imagine but has a relative degree of possibility.

[tucker6]

crude under $40 per barrel this morning. i have never seen oil drop before labor day ever that i can remember.

in January 2016 oil went as low as $24 never hit $20, 2017 might be different though, demand seems to be lower now. my ultimate price target for oil is ZERO. hard for me to even believe though, and seems quite impossible, but that is how the world turns, i never thought Polaroid would be out of business either. these things are tough to imagine but has a relative degree of possibility.
You keep banging that drum. The fact remains that oil has been more predictable than not if one looks hard enough. There is zero long term reason not to buy oil stock. None whatsoever. In tandem, there is no long term reason for oil to fall. It will cost more for a bbl over time.

[Parkview_Pirate]

I don't see a lot of different between the two articles. They say much the same thing but are discussing two slightly different things. The OP article was focused on cost and breakeven. Your article was focused more on profitability prices. Based on my reading of the two documents, I can see where both stories can be factually correct. They're even quoting some of the same people.

The Telegraph article reads like an ad for procuring frack funding.

The Bloomberg article reads like a warning to avoid fracksters.

That being said, I thought some of the numbers from the Telegraph article were interesting. The 18 percent decline rate for the first four months versus 90 percent a decade ago repudiates one of the major criticisms of fracking. Lowering the cost of fracking by 26% in Texas is one thing, though the Bloomberg article indicates $60 is now the Mendoza line.

However, I'm still not sold that it's so much cheaper now to extract from these oil fields, as the numbers have sometimes been known to exclude the cost of energy and chemicals (and environmental clean up) from the projections. I know a guy who works in the tech center at Caterpillar, and they are busily adjusting their $60B company to a $40B company, as the price drop in oil shot a big hole in some of the Canadian tar sands extraction, and other "global growth" has slowed down as well.

I will agree with you on your other comment though that oil stocks, long term, should be a good play. As the industry shakes out the losers and consolidates, the future looks pretty rosy for a well run company. The problem is near term, and determining how much lower prices could go with overproduction AND an economic slow down AND the stability of the dollar up in the air.

[barahona44]

crude under $40 per barrel this morning. i have never seen oil drop before labor day ever that i can remember.

in January 2016 oil went as low as $24 never hit $20, 2017 might be different though, demand seems to be lower now. my ultimate price target for oil is ZERO. hard for me to even believe though, and seems quite impossible, but that is how the world turns, i never thought Polaroid would be out of business either. these things are tough to imagine but has a relative degree of possibility.
Polaroid was a one trick pony that made a specialized product (instant photography) .The second digital photography became available to the public, it was the beginning of the end for Polaroid and they died a pretty quick death. I understand your point, but oil will be important for at least the next half century.The infrastructure for extracting, processing and distributing oil is already in place, substitutes aren't widely available or have tech issues.Right now, I can fill my gas tank in three minutes and it will take me over 300 miles.A three minute electric charge might get me to the end of my street. Maybe.

[lamboguy]

Polaroid was a one trick pony that made a specialized product (instant photography) .The second digital photography became available to the public, it was the beginning of the end for Polaroid and they died a pretty quick death. I understand your point, but oil will be important for at least the next half century.The infrastructure for extracting, processing and distributing oil is already in place, substitutes aren't widely available or have tech issues.Right now, I can fill my gas tank in three minutes and it will take me over 300 miles.A three minute electric charge might get me to the end of my street. Maybe.after breathing the air on this planet for over 60 years so far i have come to the conclusion that its never right to expect the logical path to lead you to the promised land. from the little technical indicators i see with oil, which includes a contango and the declining currency that one must use to purchase oil, i don't see to many positive things with oil going forward. i only wish that i could time the decline of oil.