Oil prices are in the negative for the first time in history

If you started off with this, then y'alls conversation would have been a lot more pleasant instead of starting with your "**** YOU **** OIL" tirade. This is a Houston Rockets fan forum; many of us have family and friends in the oil industry.

 

Crude getting slaughtered again today. Brent down 20% and WTI down 23%

 

Not really.

Obama didn't "allow them to expand". Shale drilling and improved technological drilling efficiencies and advancements combined with a greenfield boom in midstream infrastructure allowed them to expand.

No one in the OG industry thought that Trump being elected would get oil back to the $80-$100 level. No one in the industry expected oil prices to rise back to those levels. $60? Sure. $100? Not a chance.

No one was thinking anything about access to oil fields that were "off limits". As you can see right now (exacerbated right now actually due to demand drop off), there was never an issue with supply and some sort of magical oil fields that we were going to get access to (which may have helped a major or two but not any regular OG E&P companies). Rig counts increased due to the Permian boom. This had nothing to do with either BO or DT. Sure the Donald is lax on regulations and BO was not, but doesn't have much if anything to do with the Permian boom.

So due to the fact that Shale drilling is somewhat like a Ponzi scheme (giant discoveries when you drill, but the decline curve is tremendous on non-conventional shale production meaning oil flows huge at first and then is a fraction of what it was as you push the easy hydrocarbons out of the formation) so in order to continue big flowing you have to keep drilling (and drilling is expensive). Again, nothing to do with a president. Nothing to do with "big oil fields that were off limits". Once oil hits below $30, lifting costs (the cost to get the oil out of the ground) becomes uneconomical for shale players (and many others as well).

These producers were all already under pressure as Wall St and Private Equity investors were demanding that they figure out a model where they were cash flow positive (as opposed to just spending all available capex continuing to drill) and as such, drilling contractors and other oilfield service contractors were already estimating decreased rig counts. Then crude and nat gas went to current pricing and no one can afford to drill at all as it isn't economical to spend $30-40 to pull out a $15-20 barrel. Therefore the rigs are getting stacked as people can't afford to drill right now. (anywhere from $3M-$15M to drill a well depending on frack stages/depth/etc)

The US president has nothing to do with the Saudi's and Russians deciding they are sick of US shale pumping out all the production they want to while we ask those countries to curtail production to lessen global supply. The US president has nothing to do with global demand decreasing exponentially due to a pandemic, which further decreases pricing.

Could DT have done a better job on getting in front of this pandemic? I think so. Not going to debate that...but we would still be in the same work from home/stay indoors position as we wait on this to improve as the virus would still be here. Global demand is still global demand and the pandemic is still worldwide and thus demand is at close to a standstill. Trump's delayed response isn't the reason why oil is down so much. We would still be at home right now (but maybe closer to a better reopening).

Point being, you are mostly wrong. Orange Leader has done a lot of stuff poorly but he isn't the person to point fingers at.

WRT flaring of nat gas, part of it is the fact that nat gas is so cheap (and certain states have different flaring rules on amount allowed to flare) but some of it also has to do with the fact that nat gas midstream infrastructure (gathering, processing, transmission) is behind the curve in the Permian and takes years to build out to get gas to market.

 

At worst oil can be used to stay warm and heat food in the impending 'Wastelands'.

 

plus those cars dat run on water tho amirite?

 

Or... cashing out as the case may be.

 

*a lot

 

I worked in the industry for nearly three years (Nov 2015 - May 2018) as a Social Media Manager and Digital Editor for two oil and gas publishing companies in Houston. While there were still companies lax in following safety regulations, many energy companies established initiatives to drastically cut their CO2 emissions in the next 20-30 years and were using natural gas to aid the development of renewable energy sources. Also, many common products we use are made from oil and natural gas (cell phones, credit cards, tires, computer keyboards and monitors, toothpaste, toothbrushes, shampoo, eyeglasses, sunglasses, trash bags, etc.).

 

They all could run Batteries charged by Solar, Nuclear, Hydro, Natural Gas and Wind energy by now.

 

The USO ETF is wreaking havoc on the June contract price. July's price of $17.98/bbl might be more telling. Probably worth looking a few months ahead on the curve because markets just aren't functioning correctly right now.

 

I apologize for my snarky comments yesterday. Feel free to ignore this if you'd like.

Renewables are the future. The issue is that we have to get from today - largely dependent on hydrocarbons - to using primarily renewables. For the US, the most realistic and cheap option is to transition to natural gas and then switch over to renewables, with natural gas providing flexibility given we don't have the battery tech yet to store large amounts of alternative energy. I get that the Green New Deal crowd dislikes this option since it doesn't take emissions down to zero, but nat gas is far cleaner than coal and other types of fuel oil. It's also the most realistic option for the US and can get developing countries to cleaner/cheaper fuel faster. Those people matter too.

 

Looks like we might have found the culprit yelling “fire” in a dark movie theater and starting the stampede....

 

Damn!!!! @Blake laying down some facts!