US also increased supply. All of these changes led to a better market balance than anyone expected.
Houston..we have a problem....
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Last: 1 day ago by FHKChE07
Yeah it wasn't near as bad as all the doom and gloomers said it would be.
The left cannot kill the Spirit of Charlie Kirk.
I have been told many times that $80-90, call it $85 is the sweet spot where O&G stays functionally profitable and employment maintains steady, and market gas prices aren't insane. When we approach $70 or less, O&G struggles.
fortunately, that has largely been the case. but not intentionally.
techno-ag said:
Yeah it wasn't near as bad as all the doom and gloomers said it would be.
I think you are way underestimating just how violent and extreme the supply shock has been worldwide. I also don't think we're necessarily out of the woods yet given how deep the global inventory drop has been.
The market only barely stretched to this point because Russia had a massive amount of floating barrels and every SPR in the world went to max draws. But we're at the point now where logistically getting boats in and out of the Strait is still necessary in very short order to keep things going. We're only here because we've undermined our own strategic geopolitical interests every step of the way. At this point Middle East crude needs a permanent much higher risk premium and SPRs around the world are likely to be strong bids in the market for the next 5+ years.
I'd want to look at that $85 sweet spot in both real and nominal terms, it's certainly not a constant "truth" for the industry. $85 in 1990 is $213 today, in 2008 dollars it would be $130 today. I think you actually have to look at that number running backwards and not casting it forward. Shale collapsed the marginal cost of production in real terms.
I think crude price is directionally pointed down and not up in real terms and US production at large doesn't care as much as we think. Pure oil play producers will care first. LNG/CNG demand is increasing and feedstock choices are more frequently present between gas and crude than they have been in the past. Co-producers have a lot of room for profit even below $85 WTI.
Oil producers who need $75 to live well and don't get anything for their gas will be the ones who hurt first.
Waha vs Henry Hub is the story..same gas molecules with large pricing gap. Location and takeaway capacity tells you if your gas is an asset or a liability. Stranded gas oil plays will cling much tighter to the $85 comfort narrative. The co-producer with takeaway capacity for gas can shrug it off as we drop below that threshold.
I think crude price is directionally pointed down and not up in real terms and US production at large doesn't care as much as we think. Pure oil play producers will care first. LNG/CNG demand is increasing and feedstock choices are more frequently present between gas and crude than they have been in the past. Co-producers have a lot of room for profit even below $85 WTI.
Oil producers who need $75 to live well and don't get anything for their gas will be the ones who hurt first.
Waha vs Henry Hub is the story..same gas molecules with large pricing gap. Location and takeaway capacity tells you if your gas is an asset or a liability. Stranded gas oil plays will cling much tighter to the $85 comfort narrative. The co-producer with takeaway capacity for gas can shrug it off as we drop below that threshold.
Gordo14 said:techno-ag said:
Yeah it wasn't near as bad as all the doom and gloomers said it would be.
I think you are way underestimating just how violent and extreme the supply shock has been worldwide. I also don't think we're necessarily out of the woods yet given how deep the global inventory drop has been.
I think a lot of people on here have been making the point that supply especially with the Chi-coms, and overland supply routes in the ME have been a lot more resilient and flexible than most people realized.
Quote:
The market only barely stretched to this point because Russia had a massive amount of floating barrels and every SPR in the world went to max draws. But we're at the point now where logistically getting boats in and out of the Strait is still necessary in very short order to keep things going.
Looks like that's what's happening.
Quote:
We're only here because we've undermined our own strategic geopolitical interests every step of the way. At this point Middle East crude needs a permanent much higher risk premium and SPRs around the world are likely to be strong bids in the market for the next 5+ years.
Elections have consequences and past administrations have either kowtowed to the Iranians or ignored them. Trump decided to do something about it. If it keeps them from getting a nuke for a while longer (hopefully indefinitely), the world is in a better place.
The left cannot kill the Spirit of Charlie Kirk.
I've made it through several other 'opportunities', but today I got the axe. My project got canceled and almost everyone (90% or so) got cut loose.
Anyone looking for a senior Process Engineer with 15+ years experience in O&G and chemicals?
~egon
Anyone looking for a senior Process Engineer with 15+ years experience in O&G and chemicals?
~egon
Dang man, I'm sorry to hear that
What's your email?
Upstream?
interested in NGL fractionation optimization? PM we can chat.Dr. Doctor said:
I've made it through several other 'opportunities', but today I got the axe. My project got canceled and almost everyone (90% or so) got cut loose.
Anyone looking for a senior Process Engineer with 15+ years experience in O&G and chemicals?
~egon
my non-identifying email is this:
sj_pyro@hotmail.com
Interested in all sort of stuff. Been doing design/commissioning/operations for LNG, NH3, polymers and small bits of refining. Mostly downstream, but have worked on some early work upstream stuff (consulting and such).
Thanks!
~egon
sj_pyro@hotmail.com
Interested in all sort of stuff. Been doing design/commissioning/operations for LNG, NH3, polymers and small bits of refining. Mostly downstream, but have worked on some early work upstream stuff (consulting and such).
Thanks!
~egon
Email sent.
I will let you know if I hear anything. We do some consulting in that area and are always looking for someone in that realm.
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