Current Oil Price

[biffvernon]

The shale industry is going to be history.

Unless it's deemed too big to fail, a strategic asset and gets $10bns bail out... like the car companies, like the banks etc.

That's an interesting thought - but is it too big to fail? Some big players, like Shell, have pulled out of shale plays and a lot of the industry is made up of comparatively small companies.

(But beware the close personal connections between the industry and government decision makers.)

[PS_RalphW]

200 pages on this thread!

This all sounds a bit deja vu

http://www.reuters.com/article/2015/03/ ... Z420150305

The battle for Tikrit has resulted in a 25,000 Bpd oil field being set on fire.

Who remembers the burning oil fields of Kuwait?

[emordnilap]

Seems to me there are dozens of 'news' stories around the web which chortle at the demise of the peak oil 'theory'. They're all very naively misleading.

[PS_RalphW]

The EIA in the US is predicting that shale oil production will start falling in april because not enough new wells are being brought online to offset declines. Peak shale oil is peak us oil, and peak us oil is peak global oil.

[Mean Mr Mustard]

The EIA in the US is predicting that shale oil production will start falling in april because not enough new wells are being brought online to offset declines. Peak shale oil is peak us oil, and peak us oil is peak global oil.

Thought US production including shale, ethanol and such was still a long way below their early 70s peak.

Should it be peak US shale etc coincides with global peak of whatever passes for oil these days, the global conventional crude peak being somewhere around 2005?

The 'above ground' factors now affecting conventional crude - Libya, Iraq, Russia, Venezuela, and the often forgotten Export Land Model effects for stabilising powderkeg places such as Saudi Arabia surely indicate interesting times ahead.

[PS_RalphW]

Conventional is a label given to the means or location of extraction. Not so much the chemical composition of the liquid produced. Not a very useful moniker. The most widely accepted label is crude and condensate, and us shale has brought US c and c close to its previous peak, and US all liquids to a new record. World crude only production probably peaked in 2005 but this is not recorded. Unconventional oil tends to be either very heavy or very light. Heavy oils can be chemically modified to make diesel, etc., but very light oil and condensate are good only for petrol. Of course, natural gas liquids, biofuels, refinery gains etc., are not oil and should not be included in reports of oil production.

[vtsnowedin]

Conventional is a label given to the means or location of extraction. Not so much the chemical composition of the liquid produced. Not a very useful moniker. The most widely accepted label is crude and condensate, and us shale has brought US c and c close to its previous peak, and US all liquids to a new record. World crude only production probably peaked in 2005 but this is not recorded. Unconventional oil tends to be either very heavy or very light. Heavy oils can be chemically modified to make diesel, etc., but very light oil and condensate are good only for petrol. Of course, natural gas liquids, biofuels, refinery gains etc., are not oil and should not be included in reports of oil production.

What to count and what not to count? That is the question.
I'm interested in what is available at the point of retail delivery be it gas ,diesel or chemical feed stock. So I would add in all liquids including refinery gains then subtract all that is used to explore drill lift transport and refine it to get a net products available for sale. When that number goes down for any of the reasons, EROEI ,Export land model , wells depleting etc. we will have reached peak oil and the downslope begins.

[emordnilap]

But changing the way production is recorded is pure spin. In other words, all 'net products available for sale' should be added into historical oil production figures.

[PS_RalphW]

vt,

If you are interested in net product available for sale, then you are not interested in barrels, but in net energy. Shale oil, NGL , and biofuels are all low energy (and mass) density products, as well as having low EROEI (shale and biofuels). Refinery gain is the ultimate non-product, being the increase in volume between the energy dense crude oil, and the energy light gasoline it is turned into, expending energy in the process. It is the only 'product' I know with negative EROEI - you expend energy to end up with nothing! (In practice, you chemically combine a hydrogen source, often GNL or NG or condensate, with very heavy (and dense ) oil, and redistribute the atoms in the molecules to prodec medium size (and density ) hydrocarbons, namely diesel and other high value products)


Net energy is impossible to measure in practice, as there is no way to define the boundary conditions.

Russia and some other countries report oil production in metric tonnes, which at least has the advantage of more closely matching the energy density of different oil products.

It is widely accepted that the EROEI of oil production is falling, and this is reflected in the exploding cost of developing new oil sources. The problem comes, as will peak oil, when the economic utility of the net energy available to the end user of each barrel exceeds the purchase cost of that barrrel. At that point the only options are to use the oil more efficiently or go broke.

A lot of peak oilers are saying that $50 oil is a sure sign that the latter option is happening today.

[emordnilap]

It is the only 'product' I know with negative EROEI - you expend energy to end up with nothing!

Now now, Ralph. You'll have our late nemesis RGR/Ralph stirring in her grave. 'Negative EROEI' was one of the things she attacked in an effort to sound a human being, you know, intelligent-ish.

[PS_RalphW]

Oill down again , WTI is only $1 above last month's low.

A lot of this is rising dollar and falling sterling, euro, etc.

Fear of Greek exit, Euro QE and talk of dollar interest rate rise.

There are mutterings about uncertainty over the UK election are driving down UK economic activity, I guess the corporates have been banking on a Con/UKIP coalition bringing in Shock Doctrine Phase Two, a Lab/SNP/Green coalition wasn't in the script.

Still a lot of uncertainty about US oil storage status. Nobody knows just what production is, how close to effectively full the oil tanks are. or how fast those SUV sales will drive up domestic demand.

In pure numbers the Shale investment bubble is small beer compared to the 2008 property bubble, but then we are 8 years deeper into the ultimate ponzi scheme.

[vtsnowedin]

vt,

If you are interested in net product available for sale, then you are not interested in barrels, but in net energy. Shale oil, NGL , and biofuels are all low energy (and mass) density products, as well as having low EROEI (shale and biofuels). Refinery gain is the ultimate non-product, being the increase in volume between the energy dense crude oil, and the energy light gasoline it is turned into, expending energy in the process. It is the only 'product' I know with negative EROEI - you expend energy to end up with nothing! (In practice, you chemically combine a hydrogen source, often GNL or NG or condensate, with very heavy (and dense ) oil, and redistribute the atoms in the molecules to prodec medium size (and density ) hydrocarbons, namely diesel and other high value products)


Net energy is impossible to measure in practice, as there is no way to define the boundary conditions.

Russia and some other countries report oil production in metric tonnes, which at least has the advantage of more closely matching the energy density of different oil products.

It is widely accepted that the EROEI of oil production is falling, and this is reflected in the exploding cost of developing new oil sources. The problem comes, as will peak oil, when the economic utility of the net energy available to the end user of each barrel exceeds FAILS TO MEET the purchase cost of that barrrel. At that point the only options are to use the oil more efficiently or go broke.

I can't find a strike through function for editing, but I tried to fix that for you. I am aware of all you are saying but just because something is hard to measure and "We have never done it that way" does not mean that is not the proper way to measure it. In most cases the proper measure or energy production and consumption is the BTU. Volume measurements such as barrels or gallons are too variable due to unit weight and energy content per unit of mass. If you used BTUs in and out there would be no refinery gains as they are just a function of the unit weights of the lighter finished products derived from denser feed stocks. Corn kernels in popped corn out measured by the cubic foot.

[vtsnowedin]

Still a lot of uncertainty about US oil storage status. Nobody knows just what production is, how close to effectively full the oil tanks are. or how fast those SUV sales will drive up domestic demand.

Perhaps this will be informative?
Data for week ending Mar. 6 | Release Date: March 11 | Next Release Date: March 18, 2015

U.S. crude oil refinery inputs averaged 15.3 million barrels per day
during the week ending March 6, 2015, 187,000 barrels per day more
than the previous week’s average. Refineries operated at 87.8% of their
operable capacity last week. Gasoline production decreased last week,
averaging about 9.2 million barrels per day. Distillate fuel production
increased last week, averaging 4.8 million barrels per day.

U.S. crude oil imports averaged 6.8 million barrels per day last week,
down by 575,000 barrels per day from the previous week. Over the
last four weeks, crude oil imports averaged over 7.1 million barrels
per day, 1.2% below the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 536,000 barrels per day. Distillate fuel
imports averaged 524,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 4.5 million barrels from the previous
week. At 448.9 million barrels, U.S. crude oil inventories are at the
highest level for this time of year in at least the last 80 years. Total motor
gasoline inventories decreased by 0.2 million barrels last week, but are
well above the upper limit of the average range. Both finished gasoline
inventories and blending components inventories decreased last week.
Distillate fuel inventories increased by 2.5 million barrels last week but
are in the lower half of the average range for this time of year. Propane/
propylene inventories fell 1.3 million barrels last week but are well
above the upper limit of the average range. Total commercial petroleum
inventories increased by 2.5 million barrels last week.

Total products supplied over the last four-week period averaged 19.6
million barrels per day, up by 5.5% from the same period last year. Over
the last four weeks, motor gasoline product supplied averaged over
8.7 million barrels per day, up by 2.8% from the same period last year.
Distillate fuel product supplied averaged 4.1 million barrels per day over
the last four weeks, up by 12.8% from the same period last year. Jet fuel
product supplied is up 10.5% compared to the same four-week period
last year.

The WTI price was $49.61 per barrel on March 6, 2015, $0.23 below
last week’s price and $53.21 under a year ago. The spot price for
conventional gasoline in the New York Harbor was $1.691 per gallon,
$0.129 less than last week’s price and $1.113 below a year ago. The
spot price for No. 2 heating oil in the New York Harbor was $1.738 per
gallon, $0.185 under last week’s price and $1.266 less than a year ago.

The national average retail regular gasoline price increased for the sixth
week in a row to $2.487 per gallon on March 9, 2015, $0.014 per gallon
more than last week but $1.025 under a year ago. The national average
retail diesel fuel price increased for the fifth week in a row to $2.944 per
gallon, $0.008 per gallon over last week but $1.077 under a year ago.

Crude Oil (Excluding SPR) +4.5 to 448.9
Total Motor Gasoline -0.2 to 239.9
Distillate Fuel Oil +2.5 to 125.5
Other Oils -4.4 to 370.2
Crude Oil in SPR no change 691.0
Total US Petroleum Inventory +2.5 to 1,875.5

[PS_RalphW]

WTI hits new lows in dollar terms. The dollar is much stronger than a month ago, so the Brent price, which is also down, is not down so much as it was in Sterling or Euros.

This means that the oil glut in the US is getting worse. As oil imports to the US have held up, it is still a glut of US shale condensate.

The US government has announced it will buy oil to top up the strategic reserve. This is a sensible move, but it is far too little too late to save US shale oil drillers.

[RenewableCandy]

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