Quote:
Originally Posted by Zingston
I'm noticing gas prices starting to increase lately around here. Up about 10% since bottoming a few weeks ago. Anyone else seeing the same?
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Not surprising. You shutter in as much oil production as has been the last few weeks and it starts to have an impact on pricing. The thing people don’t realize is while we had a huge surplus for 4-6 wks while the world basically shut down, a lot of the worlds production are fields with questionable driving forces and pressures. When you shut those in, a lot of times they don’t come back. Oil went negative when the May futures expired and I wouldn’t be shocked if we have a shortage come 9-12 months from now. You can’t just flip a switch and go pull oil out of the ground. It’s take ls years of engineering, fabrication and drilling to get it up and running.
Texas shale is easy to get but the wells are low producers. You get 50-100 bpd out of them, so you need to punch a shitload of holes to get any serious volume. The kicker is there aren’t many companies that can produce shale oil for $20-25 dollars a barrel. The best return on you money is offshore but the timeline is 2-4 yrs and it requires a huge capital investment upfront.