Texas is about to create OPEC's worst nightmare

[Anonymous]

The map lays out OPEC's nightmare in graphic form.



An infestation of dots, thousands of them, represent oil wells in the Permian basin of West Texas and a slice of New Mexico. In less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30 a barrel.



OPEC's bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 million barrels of oil a day.



"The Permian will continue to grow and OPEC needs to learn to live with it,'' said Mike Loya, the top executive in the Americas for Vitol Group, the world's largest independent oil-trading house.



The U.S. energy surge presents OPEC with one of the biggest challenges of its 60-year history. If Saudi Arabia and its allies cut production to keep prices higher, shale will thrive, robbing them of market share. But because the Saudis need higher crude prices to make money than U.S. producers, OPEC can't afford to let prices fall.

https://www.msn.com/en-ca/money/topstories/texas-is-about-to-create-opecs-worst-nightmare/ar-BBPXflK?li=AAggNb9&ocid=mailsignout">https://www.msn.com/en-ca/money/topstor ... ailsignout">https://www.msn.com/en-ca/money/topstories/texas-is-about-to-create-opecs-worst-nightmare/ar-BBPXflK?li=AAggNb9&ocid=mailsignout



Canada could have been part of this, but we have decided to give good jobs to other countries.

[Anonymous]

Cartel Squeezed



So the cartel finds itself squeezed between the-sky's-the-limit U.S. output and softer demand growth. The 15 members, and allies including Russia, Mexico and Kazakhstan, will discuss the possibility of their second retreat from booming American production in three years when they gather Dec. 6 in Vienna.



OPEC helped create the monster that haunts its sleep. After it flooded the market in 2014, oil prices crashed, forcing surviving U.S. shale producers to get leaner so they could thrive even with lower oil prices. As prices recovered, so did drilling.



Now growth is speeding up. In Houston, the U.S. oil capital, shale executives are trying out different superlatives to describe what's coming. "Tsunami,'' they call it. A "flooding of Biblical proportions'' and "onslaught of supply'' are phrases that get tossed around. Take the hyperbolic industry talk with a pinch of salt, but certainly the American oil industry, particularly in the Permian, has raised a buzz loud enough to keep OPEC awake.

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[Anonymous]

Price Tumble



"You've got an awful lot of production that can come in very economically,'' said Patricia Yarrington, Chevron Corp.'s chief financial officer. "If you think back four or five years ago, when we didn't really understand what shale could do, the marginal barrel was priced much higher than what we think the marginal barrel is priced today.''



That shift makes shale resilient to a price tumble. After touching a four-year high in October, West Texas Intermediate, the U.S. benchmark, has fallen by more than 20 percent.



Only a few months ago, the consensus was that the Permian and U.S. oil production more widely was going to hit a plateau this past summer. It would flat-line through the rest of this year and 2019 due to pipeline constraints, only to start growing again -- perhaps -- in early 2020.



If that had happened, Saudi Arabia would've had an easier job, most likely avoiding output cuts next year because production losses in Venezuela and sanctions on Iran would have done the trick.



Instead, August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month last year. Total output of 15.9 million barrels a day was more than Russia or Saudi Arabia.

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[Anonymous]

Rail Cars



The growth was possible because oil traders decided not to be stymied by the dearth of pipelines. They used rail cars and even trucks to ship barrels out of the region. But pipeline companies unexpectedly increased capacity, in part because they added chemicals known as "drag reduction agents'' to increase flow. A new pipeline came online earlier than anticipated, and with three more expected between August and December next year, production is poised to skyrocket.



"The narrative has shifted significantly,'' said John Coleman, a Houston-based oil consultant at Wood Mackenzie Ltd. "Six months ago, the market expected the bottleneck to ease in the first quarter of 2020. Now, it expects it in the second to third quarter of 2019.''



Knowing that more transportation would be available next year, Permian companies are drilling wells but, for now, aren't fracking many of them. Those wells are becoming a reservoir of ready-to-tap production once the new pipelines -- Gray Oak, Cactus II and Epic -- come online.



"We're going to see a re-acceleration of well completions in the Permian in the second half of 2019,'' said Corey Prologo, head of oil trading in Houston at commodity merchant Trafigura Group Ltd. "The pipelines are going to fill up very quickly.''



The only obstacle for another surge is export capacity, as most of the incremental output will need to ship overseas. With terminals nearly full, Permian barrels could end piling up in the ports of Corpus Christi and Houston.

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[Anonymous]

Transportation Bottlenecks



Even so, few in Houston, or in Midland, Texas, the hub of the Permian region, believe that growth will be anything but gangbusters next year because of the clearing of transportation bottlenecks.



"It will be a series of events throughout 2019 that occur,'' said Jeff Miller, chief executive officer of Halliburton Co., the world's biggest provider of fracking services. "But it'd be easy to see, as we finish the year, things being perfectly normal."



By the end of 2019, total U.S. oil production -- including so-called natural gas liquids used in the petrochemical industry -- is expected to rise to 17.4 million barrels a day, according to the U.S. Energy Information Administration. At that level, American net imports of petroleum will fall in December 2019 to 320,000 barrels a day, the lowest since 1949, when Harry Truman was in the White House. In the oil-trading community, the expectation is that, perhaps for just a single week, the U.S. will become a net oil exporter, something that hasn't happened for nearly 75 years.

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/BBPW5rY.img?h=491&w=874&m=6&q=60&o=f&l=f">

[Anonymous]

Saudis Concede



Saudi officials concede that the tsunami is coming. OPEC estimates that to balance the market and avoid an increase in oil inventories, it needs to pump about 31.5 million barrels a day next year, or about 1.4 million barrels a day less than what it did in October.



Global oil demand has so far absorbed the extra U.S. crude barrels, limiting the impact on prices. The loss of output from Venezuela and to a lesser extent, Iran, even allowed Saudi Arabia, Russia and a few others to boost production. But for the cartel, U.S. shale remains as intractable as in the past.



In early 2017, Khalid Al-Falih, the Saudi oil minister, told an industry forum that Riyadh has learned the lesson that cutting production "in response to structural shifts is largely ineffective.'' The kingdom would only make one-time supply adjustments to react to "short-term aberrations," he said, and otherwise allow "the free market to work."



Nearly two years later, Al-Falih has lost enough proverbial sleep. He's about to make a U-turn. He'll battle what increasingly looks like a structural problem: booming U.S. production.

[JOE]

Same time Texas & other regions may experience adverse effects from all this fracking.



Including man made earthquakes, sink holes, poisoned groundwater.



So if they want it that badly, then  they should be prepared to pay the price

[cc]

Good info, guy (Seoul that  is)



It pains my heart to watch (with tears flowing) OPEC  losing it's power and flow of cash



Unfortunately, Canada will also be missing the boat(s)

[Anonymous]

Same time Texas & other regions may experience adverse effects from all this hydraulic fracturing.



Including man made earthquakes, sink holes, poisoned groundwater.



So if they want it that badly, then  they should be prepared to pay the price

It seems you are ignorant. Unlike you left coast prog faggots, I've fracked thousands of wells everywhere in every type of seismic environment.



I know you trolls never read what serious posters write, but make an exception this one time.



Fracking Does Not Contaminate Ground Water, Study Finds

http://www.sciencetimes.com/articles/13503/20170425/fracking-does-not-contaminate-ground-water-study-finds.htm">http://www.sciencetimes.com/articles/13 ... -finds.htm">http://www.sciencetimes.com/articles/13503/20170425/fracking-does-not-contaminate-ground-water-study-finds.htm



FRACKING DOESN'T CAUSE SIGNIFICANT EARTHQUAKES, STUDY SAYS

https://energyinstitute.tcu.edu/fracking-doesnt-cause-significant-earthquakes-study-says/">https://energyinstitute.tcu.edu/frackin ... tudy-says/">https://energyinstitute.tcu.edu/fracking-doesnt-cause-significant-earthquakes-study-says/



But even that study is now outdated because fracking now recycles waste water. It was injecting waste water water back into the ground that was a concern in SOME areas, but not all.

[Anonymous]

I can't remember where, but I read that new fracking for natural gas has the smallest land disturbance footprint for each gigajoule of energy produced. That is solar, wind, hydroelectric, coal, biomass, and possibly even nuclear.

[Anonymous]

I can't remember where, but I read that new hydraulic fracturing for natural gas has the smallest land disturbance footprint for each gigajoule of energy produced. That is solar, wind, hydroelectric, coal, biomass, and possibly even nuclear.

You may have read it from a link here. And it is true. Gas Fracking does indeed produce the smallest environmental impact at the lowest cost of any large scale energy source.

[Anonymous]

Meanwhile  Trudeau is becoming OPEC's best friend. Cancelling Northern Gateway, working against Energy East and Petronas LING, moratorium on tanker traffic along the North Pacific, not asserting federal authority over TMX, and worst of all, Bill C-69 which makes new pipelines to tidewater an impossibility. Trudeau is the best pm Saudi Arabia ever had.

[Anonymous]

Meanwhile  Trudeau is becoming OPEC's best friend. Cancelling Northern Gateway, working against Energy East and Petronas LING, moratorium on tanker traffic along the North Pacific, not asserting federal authority over TMX, and worst of all, Bill C-69 which makes new pipelines to tidewater an impossibility. Trudeau is the best pm Saudi Arabia ever had.

I saw he  was blaming Harper for no pipelines to tide water getting built. Well, let's see, one pipeline to a coast was proposed under Harper's government, itwas approved it and then Trudeau shot it down shortly after taking office.And to make it impossible for any future proposed pipeline to the North Pacific to be built, he passes bill c-48 banning tanker traffic. At least Canadian tanker traffic, not tankers going through Canadian water on their way to and from Alaska.

[Anonymous]

This is misleading.



SHALE WELLS ACROSS US CHURNING OUT LESS OIL THAN PROJECTED





https://dailycaller.com/2019/01/02/fracking-less-oil-projected/?utm_medium=email">https://dailycaller.com/2019/01/02/frac ... dium=email">https://dailycaller.com/2019/01/02/fracking-less-oil-projected/?utm_medium=email

The U.S. shale boom has even rivaled the Organization of the Petroleum Exporting Countries' (OPEC) influence on the market, with the international oil cartel being forced to work around the vast increase in supply.



However, an investigation by The Wall Street Journal suggests that thousands of shale wells in the U.S. are not yielding as much as developers originally projected to their investors.



After analyzing around 16,000 wells that are operated by 29 of the largest fracking companies in oil basins in Texas and North Dakota, WSJ found two-thirds of the projections made by producers between 2014 and 2017 in the country's four top drilling regions were too optimistic.



Altogether, fracking companies that made forecasts are on course to pump almost 10 percent less oil and gas than they originally projected, WSJ reported Wednesday. This number is commensurate to nearly 1 billion barrels of oil and gas over three decades, and worth over $30 billion.