Oil prices are set to rise again due to growing foreign demand, which could set the stage for another American oil boom built on the infrastructure of the first fracking boom, according to an economist who works on energy issues.

“Even with China’s economy slowing, global oil use will still rise by 1.3 million barrels a day this year—equal to the peak daily output of the entire Bakken Shale field,” Mark Mills, a senior fellow at the Manhattan Institute, wrote in a Wall Street Journal oped Monday. “Middle-class automobile ownership in Asia is rising steadily, from today’s average of 60 to 80 cars per 1,000 residents toward the West’s 600 to 800 cars. All the fundamentals point to growing demand for oil.”

“Shale 2.0, when it comes, will be even better,” Mills wrote. “The technology is advancing at a speed usually associated with Silicon Valley. Over the past half-decade, average output per rig has risen at least 400%. Productivity rose 40% last year, despite cost constraints. The rigs are getting cheaper, and the efficiencies brought by the latest tools—from data analytics to robotics to advanced materials—have yet to be deployed.”

Mills believes that today’s low prices may be worse for major foreign oil producers like Russia, Venezuela, Brazil, and Iran than for America. These countries require the price of oil to be above $80 a barrel to balance their national budgets. However, industry experts at RBN Energy believe most new American oil production will be profitable at around $40 a barrel. Such a set up means that the price of oil will be essentially permanently locked in at prices favorable to America.

The biq question is how far in the future is the next oil boom???

http://houstonenergyinsider.com/?p=4611

Views: 5147

Reply to This

Replies to This Discussion

Oil WILL pick up again; it always has - there are 2 questions that matter to landowners:

1. When will it pick up? (how long will the downturn be)

2. Where will it pick up? Will it be in the existing shale plays or somewhere else, either new shale plays or some other form of drilling?

In the meantime, don't sell your rights cheap just because the market is down - it will pick up at some point, at which time they will be worth substantially more and why should a speculator get that increase instead of you?

Johnathan,

      Good advice about not selling mineral rights. We have no idea how big the shale plays are in our area. Those who know will keep it a secret and try to buy up as many acres of minerals as possible.

Also since few of  us have seen a fair royalty payment to date, we don't have a good feel for what the royalties should be.

Paige 5H well had as many as 9 oil tanker loads taken from the well in Nov & December. Of course Chesapeake turns in lowball numbers of barrels taken. The lawyers claim that they fill the tanker up each trip at a well. That means the landowner, and ODNR may never know how many barrels left the well pad.

Notice the stories about all the oil that is showing up out of no where. That's the result of underreporting production then selling huge volumes of oil. The oil appears out of no where. The reason for this is the producer didn't have to share the wealth with the landowner or pay a severance tax to the state. No one is checking the well production volumes on the pad meters. What would you do if you had no ethics and knew no one was watching. Tell the truth when the state is using the Honor System, or do what you do best, steal it.

the State Of Ohio is missing out on a lot of$$$ by not monitoring the production #s. You would think that the people who are thinking about running to be the next governor,or attorney general of Ohio would take notice and see what they could do about it. Its not just the landowners getting ripped off,but the state is too! If they could get something done about,it would go a long way towards getting elected. Our present elected officials don't seem to care.

After reading about all the theft, drama,suspicions and the way the gas companies do business its no wonder some people chose to sell the mineral rights.  They just put new water meters in my home and it is all computerized metered and billed direct, why can't the State require meters on all the wells that are metered by the State and the landowner have access to the metered amounts?  If the water company can do that why can't the gas companies....???

They may, and very likely do have similar meters (probably way better ones).  The problem arises in that the ODNR does not independently verify readings/production values at the well, from what I understand.  The "honor" system, if you will... laughable.

I personally do not believe that every company abuses the system.  But it's obvious how easy it would be to abuse if one decided to...

I agree with George. In this day and age, there has to be some type of metering system that will automatically, and correctly, measure what comes from a well and the volumes that leave there. I think this would benefit everyone, landowners and the "honest" oil and gas companies. It would force the more unethical companies to get in line. Then, we could stop with all of this back and forth of what is or is not being reported. Anyone out there with knowledge of meters available in the industry?

Meters don't matter if there isn't some independent third party reading them.  People on here have said that the ODNR does not independently verify production results, they go on what is reported to them by operators, i. e. the honor system.

I only wish that the IRS relied on the "honor" system; I could have saved a quarter million on having to pay Federal and state taxes on the lease bonus money received....

The attached meme shows the difference between the end of the last boom and today...

Attachments:

The seeds of the next boom are sown in the current bust cycle. Depressed prices gut exploration and drilling projects which hurts production sooner rather than later in shale plays like the Utica.

I always challenge for the last time oil prices went down and stayed down, don't bother, it never happened. Truth is there usually is a multiplier involved, for every dollar they go down they will eventually come back up two or more.

The world is a dangerous place and the most dangerous also are where much of the worlds oil supplies exist. Some may try to tell you that fossil fuels can be replaced by renewable energy sources but I think not and there is nothing to hang your hat on that proves me wrong.

Besides, it is not polite for the few of us to root for prices to increase, which comes at the expense of the many. We currently have a glut of supply depressing prices which needs to be addressed by adjusted production, which the industry will soon collude upon to bring about. And a global economic expansion led by an Obama-less America wouldn't hurt either.

Go enjoy your life for a while, it'll come back.

Not much of a story here - I think the last line says it all...."However, industry experts at RBN Energy believe most new American oil production will be profitable at around $40 a barrel. Such a set up means that the price of oil will be essentially permanently locked in at prices favorable to America."  The solution to high oil prices is high oil prices....damn Obama.

The easiest thing for an "expert" to predict is what the current status quo is.

RSS

© 2020   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service