Fine: Oil at halftime, 2016


Sep 12, 2015
The full article is here-> Fine: Oil at halftime, 2016
Without the freeze of OPEC production, $50 a barrel prices are here nevertheless. Does the rig count recover — only 15 working in New Mexico from over 100 just 18 months ago?

Yes and no. Companies should start stimulating (fracking) the heavy inventories of uncompleted wells. A boom again? Hardly. With more drilling of uncompleted wells at $50, American Southwest unconventional production rises. Saudi Arabia and the Gulf nation producers would see once more the threat to market share which started the bust in the first place.

Higher oil prices equate to more production and energy-related banks and funds might find new borrowers. Is this the constraint of lower and longer oil prices? It doesn't matter what supply forecasts come from traders’ prattle on cable TV. The final half of 2016 will be negative on price and oil demand. The price war with Saudi Arabia/OPEC continues.

There are three counter-strategies to Saudi Arabia and OPEC from American shale oil producers and communities:
OPEC production faces two other problems:

LNG substitution is dependent on the pace of infrastructure building which is going pretty fast. LNG is selling at $2/BBL equivalent.

Russia is fracker's heaven as is Brazil.

So, while I agree with you I think you understated your case.

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