Area Last Count Count Change from Prior Count Date of Prior Count Change from Last Year Date of Last Year's Count
U.S. 13 March 2015 1125 -67 6 March 2015 -684 13 March 2014
Canada 13 March 2015 220 -80 6 March 2015 -302 13 March 2014
International February 2015 1275 +17
Courtesy from emunster's stockhouse posting
So production increased over 20%; typical management is following the American greed scenario....ceo's of oil companies think they must increase production and that will increase profits....that relationship is dead when all other companies do the same thing and killed $100 oil.....ceo's should hire an economist to figure out the impact of increasing production greater than annual demand growth which has averaged 1-2%. Maybe they will all learn.
My guess is $1.5 billion which should get rid of most of their intangibles. This will have no impact on debt covenants (debt to book value), but the size should scare the market. Good buying opportunity as OPEC seems to be calling a price increase in the second half. Notice no name calling in the message my fellow posters.
And yet Exxon keeps increasing supply.....he's kind of stupid......Exxon is not cutting back on supply/production
CEO says xom's production will increase annually and then says oil prices will remain low; you think there is a connection here- he should talk to an economist- duh!
In Act 3, rig activity continues to drop, production continues to increase, but prices stabilize, trading in a range. In 2008, this period lasted just under two months. Fast forward, if the same trajectory holds, this period of prices trading in a narrow range will end around the end of February.
Act 4. The plot takes a twist. Rig activity continues to drop, production continues to rise, however, prices begin a significant upward climb. In 2008, prices bottomed at the end of the year, the bottom was tested twice, the last time in late February, after which prices rose 100% in 3 months. The price rise will not be as dramatic this time as the fall has not been quite as sharp (2008: ~75%;2014: ~50%). But, all other things being equal, the time frame should be about the same.
(click to enlarge)
The Final Scene. Normalcy returns. With the new higher price (still well below the previous peak), rig activity recovers. Production, after a period of actual decline, recovers as well. Many will look back wondering why they missed the price rise in Act 4, but in retrospect, it should not be surprising.
Time-lines in 2014/5 will be different than 2008/9. But in the end, like all movies, the ending is the same.
Oil Turnaround May Be Sooner Than You Think ... A Look Back To 2008
Dec. 30, 2014 11:19 AM ET | 9 comments | About: iPath S&P Crude Oil Total Return Index ETN (OIL), Includes: UCO
•Large production cuts already announced.
•New rigs down 7% since November.
•Prices recover before production declines.
We've seen this movie before. The Cartel (OPEC) loses its discipline, causing prices to collapse. Suddenly, instead of calls for oil to go to $150 a barrel, pundits talk of $20 oil. Like all movie remakes, the characters and the scenery may change, but the plot remains by and large the same. The same can be said for the current oil price saga.
Act 1 is already done. A precipitous drop in the price of crude oil leads to a decline in oil drilling rig activity. Drilling rig activity topped out at 1609 oil rigs in early November. To date the reduction in rig count has been relatively modest, at a mere 7% to 1499. (Source: Baker Hughes North American Rig Count; US Energy Information Agency)
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But future cutbacks are coming. According to Forbes, one of the largest players, Continental Resources (Harold Hamm) plans to reduce capital expenditures in the upcoming year by 48%.
A similar reduction by the entire US industry would reduce oil drilling rig to well below 1,000 units, enough to cause an actual decline in US production of oil.
Act 2 has just commenced and may be almost over. During this period, both prices and drilling rig activity decrease. Looking back to 2008, prices hit bottom seven weeks after the end of the peak drilling activity. Translated to the current drama, seven weeks from the peak is, more or less, this week.