Member Info for MarcelKrell

"In the end, Putin also knows—or should know—that U.S. shale producers aren’t so easy to kill. These are smaller companies that can go in and out of business as prices dictate. The oil price will be low for a while because the pandemic will dramatically slow global oil demand. But eventually, economies will recover. The Russians and Saudis will talk their way -toward allowing the oil price to move higher. U.S. shale production will come back on line. We’re left to wonder just how low Putin and MBS want to go."

That's it, in a nutshell.

https://oilprice.com/Energy/Energy-General/Saudi-Arabias-Deficit-To-Soar-As-Oil-Price-War-Rages-On.html

Maybe we will see $10,- maybe not, but it will be short lived in ANY scenario.

PROJECT DETAILS
The Hammerhead project will see the production of 150,000 to 190,000 barrels of heavy oil per day. The project is expected to last for ***20 years*** and will see 26 to 30 wells being drilled to support extraction of the oil from below the seafloor. Each well will be drilled to some 3500 to 5300 metres below sea level

Lol, will Corona be under control then?

Reference Quote:

To be sure, Saudi Arabia is surely sticking the knife in, flooding the market at a time of economic meltdown. But an extra 2-3 million barrels per day (mb/d) of supply pales in comparison to the more than 10 mb/d of demand destruction. JBC said that oil price movements are “coming increasingly from” day-to-day news on the pandemic, rather than from OPEC.
The fastest way out for the oil industry, then, is for governments to slow the spread of the pandemic. The economic crisis can only be resolved when the health crisis is resolved."

Shale drillers getting crushed. More shale drillers are exploring debt restructuring as WTI sinks into the mid-$20s.
Shale industry lost $2.1 billion last year. A survey of 34 North American shale-focused drillers reported a combined $2.1 billion in 2019, according to IEEFA. That capped off a decade in which they spent $189 billion more than they generated.

https://oilprice.com/Energy/Energy-General/Saudi-Shock-And-Awe-Is-Crushing-Shale-Drillers.html

Corona is the main thing right now:

"As much as some U.S. Senators want to Riyadh to fix the oil market, the reality is that the coronavirus is the overarching story. Oil companies will not climb out of the abyss until governments get a handle on the pandemic. “Unless politicians decide (and get public support) to let thousands (or maybe even millions) of elderly and sick people die from Covid-19, the virus is set to result in a nearly global lockdown situation,” JBC said.
“At pretty much any other time, the industry media would still be full of speculation on Saudi motives, and potential exit strategies, but at this point everybody is busy just catching up to the latest developments” with the coronavirus, JBC Energy wrote in a report."

JP, please get your fact together. If you want to know about Guyana, look up Eco Atlantic and learn about the Cretaceous oil layers.

And regarding the deal, I think that deal was made earlier, pre Corona. I'm sure it was.

"There is a growing amount of tension among the population, even among the crown prince’s main supporters, Seznec said.
“But he needs to make a big impact. Now, his big impact is to force the Russians to give up and agree to the cuts, and if at the same time it destroys the U.S. shale industry so much the better,” Seznec noted. "

"Russia’s revenues from oil and gas will be US$39.5 billion (3 trillion rubles) lower than planned, Russian Finance Minister Anton Siluanov said this week, adding that Moscow now expects a budget deficit.
Analysts argue that Russia is in a better fiscal, financial, and political leadership position than Saudi Arabia to win the oil price war.
Yet, there will undoubtedly be economic pain for both sides in this war, which is already claiming the first collateral victims—U.S. shale, Canada’s oil industry, and the UK’s offshore oil and gas sector. "

No Dave, it will not last a year. And you know it, nobody can afford that. They will just ramp up short term measures.

"At $30 a Brent barrel, the Saudi wealth fund will deplete fast and reduced government spending will stall projects, and the already suffering private non-oil sector will suffer further. That’s the near-term damage.
The longer-term damage is the lack of funds for the ambitious Vision 2030 plan of Saudi Crown Prince Mohammad bin Salman, which was already going downhill even before the oil price collapse as the promised multibillion foreign investment and Saudi investment in “diversifying away from oil” weren’t exactly flowing to the Kingdom. "

This, on top of: https://oilprice.com/Geopolitics/Middle-East/Coronavirus-Hurts-Middle-East-Economies-Beyond-Oil.html

Matt, could be, but shortlived.

Saudi Arabia’s Oil Price War Is Backfiring

https://oilprice.com/Energy/Crude-Oil/Saudi-Arabias-Oil-Price-War-Is-Backfiring.html

"Two weeks later and nearly 4 million bpd of total promised additional oil supply to the market next month, and Riyadh and Moscow are now counting the cost and trying to adjust government spending."

It's not what they want.

I also found that to be a strange remark. Maybe he means the ones that aren't to much in debt? Or that Shale just will come back when prices rise again…?

It continues:

"With the oil price during the March-October period consistently well above US$70 per barrel of Brent and in September trading at nearly US$85 per barrel and looking like it was going higher, Trump warned Saudi Arabia’s King Salman that: “He would not last in power for two weeks without the backing of the U.S. military.” This was also the occasion when the Saudis were remainder of the NOPEC Bill, according to the legal sources in Washington."

https://oilprice.com/Energy/Crude-Oil/Trumps-Ultimate-Weapon-To-End-The-Oil-War.html

"The weapon is the ‘NOPEC Bill Bomb’. The ‘NOPEC Bill Bomb’ refers specifically to the ‘No Oil Producing and Exporting Cartels Act’ (NOPEC) that was last threatened by the U.S. in October 2018 when the Saudis had enabled the Brent oil price to remain above the key US$70 per barrel level since March. Any sustained Brent price above US$70 per barrel was – and is – regarded by the current Presidential Administration as being in an area where the benefits to U.S. shale producers of higher prices are outweighed by the relative damage done to the U.S. economy. "

Oiluser: " I would like to be wrong,"

Luckily you are wrong.

"This virus is going to become an excuse to reverse globalization entirely (…)"

Come on. This is standup comedy... I won't even address it.

In the Putin-Salman standoff, analysts ponder which man will blink first. With a fiscal break-even petroleum price of $42.50 per barrel, Russia’s economy is more diversified than its Saudi counterpart, with a strong defense industry, the exports of which are second only to America’s. For Saudi Arabia, the fiscal break-even oil price is $85 per barrel, reports the International Monetary Fund.

I don't know how long it will take to kill most of Shale producers, but this will not last long. If, on top of that, Corona starts losing territory during spring/summer… what do you think will happen to the oil price?

Tullow has plenty of time to sit this out, thank God.

Oiluser: "The world as we knew it is gone , what's coming remains to be seen."

L-O-L

End of year I hope we haven't even forgotten about this all together. But everything will be as it used to be.

It can of course go to $5,- but it won't be for long...

The cure for low oil prices = low oil prices. Even with Corona.

The cure for low oil price will always be (and stay): low oil prices.

These price are good for no producer. The are an attempt to reach a certain goal, but that will not work, like it did not work the last time. And then prices go up again.

I saw a video interview with the head of Aramco early this year. He said he saw this before.

Of course a cut is coming. Nobody wins in this scenario. Question is: when.

My 50 cents, somewhere end of April?

https://edition.cnn.com/2020/03/20/business/oil-crash-saudi-arabia-russia-trump/index.html