These low prices are going to cause a bunch of problems around the globe. You saw with Libya, it does not take much to drop 1-2 million barrels per day. Basically, if they remain offline our surplus would be gone. Yet, we are still selling off on the news. Shorts will not let loose until they see a shortage.
The problem is the pricing in the Marcellus. They should shut down as many rigs there as possible and only drill in areas that they can get fair pricing. These middle men are taking advantage of the E&P guys. They sell it for a fortune to the NE at times like these. The CEO's just need to grow a set and shut in the wells. Unfortunately, they still have that terrible Access Midstream contract that Aubrey made with the Devil !!!!!
However, the wells peak out at 144 and now the average is 130, despite all those longer laterals, etc. This just tells us that the older wells are declining. (as of Dec 2014)
The shorts have not begged for a thing. Maybe another hit will remind these Cap Ex pumping guys that they need to cut rigs by a minimum of 50%. That will get the job done quicker and get the price back up. We need quick action even if it takes well shut ins.
30 oil and 20 Gas. That would make me feel good.
If we could have 50 a week, no rigs in 26 weeks. That will not happen, but at some point the market must take notice.
Getting in the same situation as oil. We need to shut down 100 Nat Gas rigs !!!!!!! If the CEO's can't see it then they are deaf, dumb, and blind !!!! That includes our Lawler. His Capex is too high !!!!!!!
I didn't know it was established that he works for AEP? Guess I was asleep on that post.
Keep an eye on the number tomorrow. We had out first big Nat gas rig drop last week. I expect more. CHK, as the number 2 gas producer only hurts itself by keeping the rig count, and production high.
There will be a market for our gas, but they will not export until end of year. Best hope is Mexico increases imports in 2015
We should have another 200+ on the next report. Glad we had this spell of cold weather or inventories could be very bloated. As of now we are up 590 from last year at this time. Last year's draw for the next report was 152, sure we will beat that number.
Perhaps, but the market reacted to a decline in gasoline inventories. This was probably due to refineries being shut down. However, the expected increase in oil inventories should have been greater if a decline in production occurred.