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OPEC is trying to starve out US production by keeping production steady. They do not want an energy independent USA.

Lets see how this plays out..

They have been doing that for years. IT costs them a fraction of what it costs us to extract oil, so all the have to do is turn off the faucet and watch the prices go up.

I'd like to see OPEC drink their oil.

Now that we are exploiting a large oil resource of our own and we currently have a glut of oil I say let them cut. I thought that was why we started exploiting the Bakken reserve so we did not have to be dependent on Middle east oil. We have achieved independence so I say let them eat their oil. If the Keystone pipeline were to ever get started, it would drive another nail into their oil coffin.

Maybe that is why Mr. O and the demonrats don't want Keystone, they want us to be dependent on moslum oil? The Saudis like China and Russia pretend to be our friends but in reality, they want to enslave us and take or money. Our liberal leadership is helping them accomplish just that.

I think it's easy to see how our economy reacts favorably when we have cheap energy. When we look out for ourselves and depend less on outside help, we tend to thrive.

kwg

There is just no way we can compete with their costs, no way, so it's going to be tough. We can certainly bring the cost down by drilling and pumping more, but we will never be able to get down to their price.

OPEC was created for that very purpose.

Like it or not, oil is on the worldwide market.

Yes, the drilling in the Bakken, Eagle Ford and Wolf Camp have eased the oil market somewhat, but those fields are just now getting into decent production. And with OPEC dropping the price by glutting the market, it is fast becoming unprofitable for American oil producers to drill and frack.

Prices will adjust.

problem is, and this is a 10 year old figure, oil has to stay above $60 a barrel for there to be drilling in the Bakken, its phuggin expensive to punch a hole and even with modern siesmographing techniques only about 1 in 3 holes produce enough to more than pay for themselves in a reasonable period of time....

contrary to what some seem to think, the Bakken is not a new deposit, this is its third oil boom, it closes down every time oil gets cheap

It's going to become very unprofitable for American producers to produce.

But, when things "collapse", they tend to recover quickly. (everything requires oil)

Personally, I'd rather have $4 gas and a booming domestic drilling program than $2 gas and a small domestic drilling program.

Not so quickly sometimes.

For over 20 years the Permian Basin looked like a ghost town, and the rig count was negligible.

Major oil companies based in Denver crashed in the 80's, and subsequent job loss, and housing glut it caused spilled over onto the entire Denver area and recessed the economy there until about Y2k.

We are and always have been energy independent. We just choose not to be.
Makes some sense if you think about it. He who has oil last wins.....

booms in the Bakken were in the early 50's, the 70's and starting big again around 2006.....

I cant wait until the Hajis run out of oil so we can tell them to p h u c k off! Doubt I will be around to see it, but it would be nice.

Refining is the key. Oil is worthless with out refineries. With out help the muzzies would be lost. They can't get it out of the ground or refine it alone. If we let their equipment break down or wear out their done. Hasbeen

the saudi's surely do not like us drilling our own stuff, but they are also limited in cutting production due to their need to sell their stuff to support their own population.
Oil/energy is not going away however, given the increasing need for it worldwide, we are not the only one with a straw at the well.
Also given rates on bank deposits, those dividends start looking pretty good.

OPEC has quite a bit less pull than they did 30 years ago (and they know it too, if the Saudi's statement this week is any guide). It's a truly global commodity now and OPEC doesn't have the policing powers it used to.

they can affect the price, but not like they could in the 70s

This must be putting pressures on Venezuela(sp) to try and keep things going there.
Cheers NC

Even if the OPEC types are successful, the oil will still be here. Waiting for the prices to go up. Therefore, what I expect will happen (behind the scenes, of course) is for OPEC type money to find itself into the hands of environmentalists and politicians to impede further drilling, fracking, ect. in order to make our production more difficult.

What is worrisome to me is that much of our economic recovery has been based on higher oil prices. Sure it'll put a few more dollars in the hands of consumers and drivers, but if this is truly a "bust", we are going to see some major pain.

Calvin:

How do you see it that way. Wouldn't lower fuel prices help those in agriculture, transport, etc. in addition to the consumer driven boost to the economy (a mini wealth affect impact)

We should really read up on exactly how much it costs the Saudis to pump a barrel of oil...

the problem is the current government has done alot to shut down as much growth as possible.....oil prices world wide have been high enough that the current oil boom in the US has been largely immune to Obama's effects.....hell just Obamacare has done a hell of alot to stifle possible growth let alone everything else....hard to grow when most businesses are going to be required to give health care(expensive health care at that) to employees working more than 35 hours a week and where is the new growth going to come from even with low fuel prices? any improvements are going to be offset by the high cost of health insurance...

The Saudi's have enough money set aside so they can sell cheap oil for a little while, but not for years and years. So, whatever their strategy, it'll have to play out relatively quickly.

For the US industry, I don't think a short shake out period is a bad thing. Let housing construction etc catch up a little, and get the wage structure in the oil fields under control a little.

For players like Russia, Iran and Venezuela, $69 a barrel oil is a budget revenue disaster, and more than a year or so could start toppling governments. It stands to reason that this is the ultimate goal of the Saudi's: put enormous pressures on the Shia's.

None of all that seems like an entirely bad thing to me.

I think this is the root of the Saudi plan. The Iranian economy is already on the rocks with the economic sanctions over their nuke program and the Saudi's are trying to kick the last support out from under them. The triple pressure of the cost of supporting Iraq and fighting their war for them , the economic sanctions , and low oil prices the Iranians are in a tight spot. It also doubles down the pressure on Russia with economic sanctions and capital flight being bolstered by low oil prices. Low oil prices may slow domestic drilling in the short run but it's killing two of our enemies.

Oil shale is not monolithic (so to speak). While there is an average cost per barrel of production, it varies in the Bakken.
Production costs further north are already above market, but the costs south of Williston are less than $30/barrel. I expect, for a while that the result of this market will be a reallocation of production resources geographically, but not a shut down. The Saudis are playing a short term game for a short term gain and I really do not think they believe this is the death knell for shale oil production in the US. just sayin.

This is one of the few times I would stand for a price guaranty. How bout buying oil for 74 bucks barrel, right here in the USA. It is enough to keep our own oil pumping, keeping workers busy and say to hell with OPEC. We would stay at about $3.00-$3.50 per gal.

HFS! - crude took a 9% hit today. I'd been looking at DUG. Coulda made 13% today.

The good news is that once the holes are drilled they can still produce with minimal cost.

What costs the most is drilling.

I've read a couple opinions on oil shale remaining viable in some areas down to $65 a bbl

No jobs no money to buy gas no matter how cheap....

the main stream culture, worldwide depends upon oil to fuel the global economy.

but, thanks to gov't, more or less, we're on the cusp of a sea-change in transportation based energy usage. look at the nissan leaf, chey volt, the Tesla, and other such vehicles. it's the advance guard moving forward, it's innovative technology asserting itself.

toyota promises us a hydrogen fueled vehicle as early as next year.,

it's long been said that we're at the beginning of the end of the age of oil. it's time to move forward. advancements in technology and gov't regulation is going to ensure the change.

menawhile, i'll keep the wood heater, and the kerosene heater in reserve just in case the propane gas truck fails to make a timely delivery during cold weather,

oil derived energy continues to dominate, but it's impact has peaked, even though an oil shortage would hurt most everyone,.

Russia and Venezuela are about $90 break even.

Bakken is around 60.

Saudi is around 50.

What we really need to do if we want to control world markets is to increase refining capacity. Oil production itself is not and has never been the bottleneck in the last few decades. It's all about refining capacity. This is why liberals refuse to let refineries be built.

agreed. but the liberals who walk amongst us do not want additional gasoline usage. they want the markets to crunch so that we have no other option than to move on to mass-transit with the jobs it will provide, and the emergent solar economy.

it is a shift in consciousness. sun power, given a sufficient basis of r&d that helps to move the technology into the main-stream is their overall goal.

meanwhile, why split atoms when one can split wood?

Large fuel reserves aren't a bad thing.


Diesel keeps forever.

Start buying 10 year old pre-emissions pickups.

Save 'local' oil for when the chit really hits the fan.

we're busier than chit, i haven't been home in almost 6 weeks. can't complain though making 16-18,000 a month now.

What?!

That is insane on both counts but I am not surprised....grin

Boys its not only the crude but the huge amount of natural gas that comes along with extracting crude oil. While the crude is substantial, the gas is phenomenal!
Not yours, the stuff in the ground.

A few years back, Glenn Beck was telling the story that back in the 70s, there was a push to convert coal to oil the way the Germans did during the war. According to Beck, the Saudis reacted by cutting the price of crude below the level at which the conversion process made sense, thereby killing the competeition.

Sounds like the same crap they're pulling now.

Beck's friend and fellow Mormon, the President of jet Blue, wanted to do the coal to oil bit, but wanted the gummint to guarantee a minimum price to be offset when prices were high. Never heard any more about it.

A side benefit for the Saudis is that low prices limit the cash the Iranians have for their peaceful nuclear program.

Pappy,

Glad to see somebody else is paying attention.

This is a standard response from OPEC, or any other corporate entity, for that matter, that has readily available in-country supplies of energy stock.

How many times has this happened in the past? Same old story.

Said producer A (Arab) wants to put producer B (Balkans, SA, whoever/whatever) out of business.

Try to kill the competition by temporarily lowering prices and crying wolf the whole time while doing so. Voila.

Its a phuggin businesss model, for God sake.

Yep, it's just business. They want to slow oil production in the U.S. and Canada by selling it cheaper than we can produce it. It'll also likely stop the keystone pipeline if the price remains around $70, at that price the Alberta oil is too expensive to extract so there'll be no need for the pipeline.

It also has the effect of royally putting the screws to Iran and Russia, which is another big win for the Saudis. To tell the truth, I'm not sure what's really their target, the domestic U.S. oil industry or Iran. Maybe it's both.

They take the long view, which they can afford to do since they don't have to worry about elections and all that other stuff that " hampers" the West.

Of course, when ISIS starts to roll across their borders, they'll squeal for help like a bunch of little piggies. And we'll pull their sandy little chesnuts out of the fire again, of course. Again.

I hope when that happens, this country has a leader that makes sure they pay the price for their salvation. Where that leader will come from, I have no idea.

That same leader would see to it that we develop and use all available sources of energy, so we can never be held hostage by foreign devils again. We have all we need right here, and if we used it we could have full employment, balance the budget and get this country rolling again.

That will never happen, of course, because most of us are too focused on Kim Kardashian's ass to get anything done.

Ironically enough, ND has a coal conversion plant still in mothballs.

Anybody think taxing imported oil so that it doesn't put our domestic production out of business is a good idea? Wouldn't stable energy prices be a good thing? Plus the Saudis use the oil money we send them to fund groups like ISIS which end up costing us in other ways.

I saw a story on Fox that said that the some of the OPEC nations needed to keep oil at $80 a barrel to make their budgets.

Interesting to say the least.

We should buy all we can while it's cheap and save our reserves, instead of increasing our refining capacity when alternative power needs developing.

I would gladly pay $3.00 a gallon for gas if we brewed our own crude. At $75 a barrel I think everyone should be happy, except OPEC , and Russia. We will be way ahead in the long run to pay this price and then some. Every oil state would benefit and we could have more natural gas. I read once that Alaska pumps the natural gas back into the ground cause there is no way to send it south. Half of what the U.S uses is what Alaska puts back in the ground. We could tell everyone else to stick it.

I've said this for the last 35 years. Use up the rest of the world's oil first, and save ours for the final crunch.

unfortunately the oil boom in the various fields around the US is one of the few good points of our economy right now.....bout the only serious job growth

Gee's this is just a business cycle, they happen all the time!

Only in Calvin's world is $10 gas a good thing for the 'economy'.

Just get sum Exxon stock and reinvest the dividends biches!!

The Saudi's aren't worried a bit about US oil production but they are obsessed with the Iranians and their bomb ambition. This is aimed square at the Iranians and the gulf arab states are going to do all they can to strangle the life out of the Iranians economy. Many people in the west think of Iranians as Arabs which they are not. Iranians are persians and are hated by arabs and the persians think of arabs as subhuman ni**ers. Then on top of that there is the sunni vs shia division. Isis is the monster that the arab states created to [bleep] the shia arabs and Iranians in Iraq. Like most monsters they didn't stay on the leash long and now are a menace to everyone.

What kind of work do you do? Can an 18-year old get into it?

I have read the $60 figure for the Bakken is misleading in that that price includes developing a well from obtaining the property/mineral rights up through production. Since the property/mineral rights where acquired long ago it's actually much cheaper.

uh no, hell alot of the leases are new.....they dont acquire the rights generally they lease them.....and in this boom they wound up sinking holes in ground they hadnt in the previous two

It's Pavlov's salivating dogs, Psychology 101 the conditioned response. We Americans are the driving force of oil. We are the top consumers. When we change our habits the whole world changes as well to respond to the USA's energy needs. Sometimes it's good for us but most of the time it's great for them.

Right now we are oil independent and the rest of the world is adjusting to America's new energy independence. Right now we are driving the bus and we are giving the rest of the world's oil producing countries fits. When we are using more energy than we produce the rest of the world treats us like diseased lepers and makes us pay their prices for the "medicine" that makes us well. America is forced to beg for every oil scrap they offer us. Kicking us in our balls every chance they get and loving it.

But, the longer we drive the oil and energy producing bus the more we get to control our own destiny. Liberals hate that. They want us kowtowing to what ever country fits their current liberal agenda. When the Bakkens oil dries up we will be on our knees again if we do not develop another source of energy. I suggest Nuclear energy in addition to coal, solar and wind along with new oil fields in Alaska and off the California coast as a good start.

The bottom line is some people in our own country want to see us begging for their own selfish political reasons. The leadership of oil producing countries want to see us begging so we can make small groups of dictators and ultra elite families rich. The projection of power and independence offends some on the liberal left. It appears they will sacrifice us in a New York minute if it fits their political agenda.

We need to think about controlling them; the ones that want to enslave us, with nothing more than common sense energy development. Doing what it takes to be energy independent keeps them in check. I have no sympathy for those who want to control us, either foreign or domestic. In my opinion, we should all think that way.

OPEC for a start needs to be following our lead and not the other way around. It's time we drug them around by their noses for a while. Right now we are forcing them to fight among themselves trying to develop an energy strategy that puts us back on their oil tit. I don't know about you, but that makes me smile. Maybe just a little.

kwg

we wont ever control them....China and India are going to take over the top buyer spots from us before long....especially with how much of our manufacturing has been tossed in their laps by our EPA....yeah we have alot of vehicles, but China and India's market shares in this respect are going up exponentially....

yes you can. I run a chemical mixing plant doing mostly coil tubing support, drill outs ,toe preps and fishing jobs.Production work.

windchill is -30 and its not even the cold part of winter yet....need help?

we're hiring apply online at oilstatesenergysevices.com go to careers and apply.

Linky no workee, Roger.

Ed

cut and paste, i got where i needed to go.....will see what i can come up with, no chit they are hiring and all over the place....

Sounds like a Joe Biden speech.

Yea. I had too much free time last night. But the point is we need to tell the middle east to kiss our @$$e$ and develop a better energy policy. We just need to keep the democrats out of the negotiations. They can screw up a wet dream. kwg

Interesting article.

Could oil collapse cause next credit crisis?

The banks took a bad bet on expensive oil. Oh so sad, too bad. $crew 'em.

kwg

Not just banks.

Oil at $40 Possible as Market Transforms Caracas to Iran

$42 dollar break even according to MW.

Oil is a dynamic business. I have confidence that our companies will stay ahead of the curve...and our Government will try to stop them.

Well, at least the Executive and Judicial branches will.

Absolutely, one way or another.

about the only folks not concerned, are those that levy taxes on gasoline. I don't know about the rest of the country, but in Florida, State taxes are independent on what the crude oil price is.

States might use the falling fuel prices to stick it to us with higher taxes at the pump.

It is gonna work

The Oil Co.s will not produce expencive oil when prices are low

we are starting to see in in my work now...

predicted to last for 3 years

Will be the end of my job for sure

Snake

When that ends starting next year it will be "aty bar the door"

Snake