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The Perfect Storm For Oil Hits In Two Months: US Crude Production To Soar Just As Storage Runs Out
Less than two weeks ago we warned that based on the current oil production trend, the US may run out of storage for crude as soon as June.
This is what we said back in early March when the BTFDers were hoping WTI in the low $40s would never again be seen:
Come June, when all available on-land storage is exhausted, each incremental barrel will have to be dumped on the market forcing prices lower and inflicting further pain on the entire US shale complex (just as Q1 results are released which will invariably show huge writedowns as companies will no longer be able to hide behind the SEC-mandated accounting trick that made Q4 results appear respectable). Here's Soc Gen: "...oil markets can be impatient and prices could drop considerably lower. As we have written previously, we are currently more concerned about downside risk than upside risk."
Since then, as expected, crude tumbled to new post-Lehman lows, confirming the global deflationary wave is raging (for more details please see China), and WTI only posted a rebound on quad-witching Friday as another algo-driven stop hunt spooked all those who were short the energy complex.
The problem is that despite the latest "dead oil bounce" we have since had to revise our forecast for full US oil storage, and pulled forward the date when this will happen in the aftermath of the latest API inventory data.
Recall that earlier this week API reported, and EIA later confirmed, that for the 10th week in a row there was a "massive 10.5 million barrels (far bigger than the 3.1 million barrel expectation) and a 3 million barrel build at Cushing. If this holds for DOE data tomorrow (and worryingly API has tended to underestimate the build in recent weeks) it will be the biggest weekly build since 2001."
The DOE indeed confirmed all of this:
It also means that at the current rate of record oil production, storage will be exhausted in under two months, some time in mid-May. At that point, with no more storage to buffer the record oil production, the open market dumping begins and prices of WTI will crater as every barrel will have to be sold at any clearing price, since the producers will have no other choice than to, literally, dump the oil.
In other words, a perfect storm is shaping up for oil some time in late May, early June.
And then we learned something even more startling.
As the Platts oil blog reports, even as oil prices continue to fall amid flat demand and near-record supply, "North Dakota is likely to see a “big surge” in production this June, potentially besting another supply record even if prices continue to crater, according to Lynn Helms, director of the state’s Department of Mineral Resources."
What make things worse is that this time the production "surge" will have nothing to do with game theory, or beggaring thy oil producing neighbor in hopes that the other, more levered guy goes bankrupt first.
This surge will be largely propelled by two factors: a state-mandated time limit on drilling and the expected trigger of a major oil tax incentive, Helms said.
Here is how Bakken production has looked like in recent months:
Helms, the state’s top oil and gas official, reported last week that North Dakota oil production fell about 3%, or about 37,000 b/d, to 1.190 million b/d from December’s all-time high of 1.227 million b/d. The reduction was expected as sweet crude prices averaged $31.41/barrel in January, down from $40.74/b a month earlier and the statewide rig count fell by 21 to 161.
But Helms said he doesn’t expect production to tumble dramatically, even as prices continue to fall, and even though he expects the statewide rig count to “bottom out” at about 100 rigs. Production, he said, will likely remain between 1.1 million b/d to 1.2 million b/d over the next few months.
Nothing surprising.
And then this will happen: "Bakken production could suddenly skyrocket, by nearly 10%, or an additional 75,000 b/d, to 100,000 b/d in June, Helms said." This means that despite low prices and production curtailments throughout much of North America, oil production in North Dakota could actually shatter a new record this summer!
This is mainly due to a backlog of between 800 to 1,000 uncompleted wells statewide, about 125 of which need to be completed by the end of June in order to comply with state requirements to complete drilling within a year.
At the same time, operators may wait until June, when a major oil tax incentive known as the “large trigger” is expected to go into effect. The large trigger, which is aimed at boosting Bakken production at times of low crude prices, enters into force when the WTI crude price averages below $55.09/b for five consecutive months.
If that incentive is triggered, which Ryan Rauschenberger, North Dakota’s tax commissioner, said he expects will happen, the majority of wells will be exempt from a 6.5% oil extraction tax for as long as two years.
With that tax break in effect and hundreds more wells running up against one-year state deadlines, production in North Dakota could continue to surge even beyond the summer.
“We’re going to ride these waves of production increases,“ Helms said.
And that, coming just as US spare oil capacity hits its limit, is precisely what all those BTFDers who bought first junk bonds, and most recently, a desperate scramble in follow-on equity offerings by the universe of cash burning US shale companies, is precisely what they did not want to hear. Because no amount of Fed ramblings about the ever weaker US economy will offset what is about to be a veritable oil tsunami.
The time to buy asset may be when there is blood on the streets, but the moment to dump crude (and buy deep OTM puts) will be precisely when the majority of investors and algo-programming math PhDs realize that in just about two months the streets are about to become black, covered entirely in oil.
h/t Lizzy
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According to El Hoser the fed is running OPEC now.
Why don't they pump it out of the ground then transport it somewhere else and then pump it back in the ground for storage until needed.
Problem solved.
oar knot.
Selling it each time! A new "financial innovation". Hooray! We're all saved!
In another thread I posted what I saw this last week in Midland, Texas. I saw several different yards with idled rigs. One sectionon Highway 20 had somewhere between 40-60 rigs there masts up. All lined up, and that was ONE yard. There were several yards with 5-20 rigs throughout the city.
MOST of the equipment and material yards were FULL. Drillstring by the rack, unassembled and stacked walking beam pumps all over the place, equipment yards are all full. Additionally, most of the RV sales places were FULL too and had specials. NONE of those indicators were normal in the last ten years in Midland. By my basic approximation about 120+ idle rigs were what I witnessed, and this is only in MIDLAND. That is onel one part of the Permeriam Basic. Some are frack wells and some are traditional resource and well development.
I think this is a big deal. Those epculating on higher oil prices, well it is a long way off. remember that we had 1800 rigs at the height of the drilling phase acouple years ago. NOW we have almost one percent idle in just one city. I would hate to see the Eagle Ford area as well. They probably have even more rigs idle.
Another observation is they are turning pumps off as well. Some traditional producing wells/fields all the pumps are running, but in many of the fields usualy 1 running out of 20 and even the stronger fields have "some" wells shut down.
I would not touch this market with a million dollar short.
Permian? my favorite period in the Paleozoic era......Dimetrodons rule!
20 dollar oil will leave a mark.
Any fool knew the 100 dollar oil train had to end sooner or later.
Just like 500,000 dollar 1000 sq foot houses will bite the bullet sooner or later.
They always builda better mouse trap they always do.
expect to see a flotilla of aging oil tankers brought in and held at sea for a few months... watch out for a few going down in the gulf and the east coast of the US to make the BP Anadarko spill look like a puddle once hurricane season starts in May
not like this wasn't seen coming!
http://seekingalpha.com/news/2212885-reuters-oil-glut-sparks-top-traders...
Yeah, but with global climate warming change whatever thingamajigglebob, there ain't been no more hurricanes, says NOAA.*
(That's the distant relative of the guy built the ark, the other Noah)
* Which we know is wrong because in spite of there not being any, the models said that there should be a couple 1,000 a month. If the models and reality diverge, simply lie to change perceptions of reality.
Al Gore will be announcing that hurricanes are necessary to maintain the Everglades ecosystem, and that climate-change-caused-hurricane-shortages are wiping out the swamps.....in 3...2....1...
Why dont they bid my metals. Oh ya I am conservative so fuck me rite
Refinery demand should kick in right about now to build summer gasoline stocks, so that'll mop up supply.
Except we no longer have a summer driving season. We have invested heavy in stayng at home now the high oil prices did that it is a sea change the will not end overnight. My pool has solar heater no gas being used.
My home theater has 250.00 a month worth of movie channels that I pay rather we watch or not.
We are not adding 250.00 of driving around now. Or ever again imho.
Half the young kids I know dont even own a car or have a license.
My car is far from the 12 mpq of my dads car.
SUV's are pushing 30 mpg.
And Japan is rolling out Hydrogen fuel cells as we speak and I cant wait to get one.
Think the prious sold well just you wait.
Note to self: buy CVX late may/early June. Reminder set.
"as Q1 results are released which will invariably show huge writedowns as companies will no longer be able to hide behind the SEC-mandated accounting trick that made Q4 results appear respectable)."
Ever notice that there always is some accounting trick or financial engineering trick that is used to prevent reality from being booked? This has become the norm for financial reporting and accounting. You never get the straight story because there is always some accounting trick or other to hide insolvency, to keep losses off the books, to pretend all is well.
We as an economy and as a nation have made a pact with each other that we will lie about everything, we will pretend things are well. We will keep that up until it all breaks down, and then the headlines on CNCB will be "Nobody could have seen this coming"
Like George Bush and Condi Rice on 9/11
Like the entire market community in 2008
Like the US CIA when ISIS took over of Libya, Iraq and Syria.
Yet, Washington has doubled down on lies. Case in point. Built on a provable mountain of lies, the Washington DC Neocons are dragging us all into a war on Russia, with the Coup in Urkaine as an excuse. When the first engagement between Russian and NATO airforces of ground units in Ukraine leades to the first nuclear detonation over the battle field, and all mankind holds it's breath to see when the next nuclear weapon is detonated, The pundits in the US Press Corps will print, just before a nuclear war.
"Nobody Could Have seen This coming!"
"The Director of the CIA announced today he was surprised about the rise of ISIS.
"I thought it was a rock band or something until I read it in the papers," said the DCI. "This may represent a Threat we need to stay on top of. We are looking into it."
"Ever notice that there always is some accounting trick or financial engineering trick that is used to prevent reality from being booked?"
Excel is a good liar. Always has been. take it from an accountant
Who's this "us" shit. Are you planning on reporting for duty when called? I'll be happy to turn over every Washington neocon to Russia so that they can fill all of their prisons in Siberia again.
If only this could all fit on a bumper sticker! Hear Hear Jack!
If war is good for business Nuclear war is even better.
And the The Hope Fairy's came and rescued fantasy land,
The End
Now go to sleep
Desperate people do illogical things. Oil price plummets; suppliers increase production to make on volume, exasperating the problem. What a fucked up world we live in!
economics is a lot more complex than they teach in Econ 101. slope inversions on supply or demand curves are scattered through history. look up the irish potato famine......
For the life of me, I never understood how an Irish potato starved to death.
Oh that was bad knuks, lol.
Almost had to red arrow you for the first time over that one. Almost. : )
Well, Well, Well... Overheads have to be paid sweety and thats why the prices of gas has risen. Static sales volumes being sold at lower prices ended up cutting margins to losses.
Strange thing is you cannot fit 21 gallons in a 20 gallon tank....Well,,,, do ya see the problem
How do you pay insurance employees vendors and utilites on 2.00 or less at the pump.
independents will close.
huh....the old "we sell at a loss, but make up for it in volume" routine....in 3...2...1
It is not marketable to the public without being refined first. The price of their inventory will have the asset base of the corporation decline.
They will manufacture a shortage of refined material so that they can command high prices at the pump and offset the loss due to asset devaluation.
They will not lose a dime. You can count on that. You will fill your Gas Tank no matter what they choose to charge at the pump.
I have had to pay through the nose at the pump in San Diego, CA, many times...due to manufactured shortages. We have the money and they know that they can get away with it.
They will implement it nation wide.
Just like the explosion in Torrance expect many more mishaps.
Oil will be a utility within a utility and highly taxed like cigarettes as Barry gets us green
Soooooo ... That's why she had that green couch upholstery outfit on ... to subliminally suggest to the Emperor that she was an environmentalist! Ah Hah!
Central Planning is the IN thing, Comrade!
Hey Lake! Hope all's well with you. 10 yrs for me today! Happy road of destiny is the best!
U got the X chip? Congrats!!!
Still going here, too.
One day at a time boys... 31.46 here
I've been dry for near 12 hours now Knuks, already starting to feel better !!!
oil demand is very inelastic for time horizons less than a few years.
oil supply is fairly inelastic, and there is fair argument to say it has the inverse slope (given intangibles of financing and inertia/friction of starting/stopping wells, the marginal producers in the short term tend to overproduce rather than cut back on price drops).
oil storage is very limited....oil is a FLOWING commodity, storage worldwide amounts to a few months burn.
world's largest producer remains saudi arabia, in spite of all the hype, and they also have one of the lowest production costs in the world....can afford to manipulate to bankrupt competition.
price at the margin is thus very largely dominated by politics in SA. it is a dictatorship, just had a regime change, has a population that doesn't like USA much, and our embassies are busy closing down at present.
This all speaks to volatility. Anybody who thinks they can predict this is nuts. SA can drive the prices down to (and below?) zero, then back to $150 before you can say Abdul Aziz. If you could stockpile oil in 55 gal drums in your backyard, it would be a great bet...like stacking kruggerands without the risk of govt confiscation....the upside potential is far higher than the downside risk, all that is required is unflinching patience. Doing so by proxy is limited by the quality of the proxies. EFTs like DBO aren't great, producer stocks have other issues. Playing futures contracts makes my bunghole clench up a little too much. What to do?
Look ma! Oil's at -$3/bbl. Well, I'll be an Abdul ... $155/bbl! ....Aziz!
who the hell downvoted you, knuk? i upvoted you....you got it exactly right.
tony hayward.
Not pumping was the Saudi manipulation pumping is not manipulating wait till the rest of OPEC pumps at will Just like America and the Saudis.
Then the real price will be bare and all can see the emperor had no clothes for a very long time.
Saint Joe....it looks like we're going to need another 'deez.
Who cares.
Who knows? https://www.youtube.com/watch?v=nciWR7rSb1Y ;)
A nice big war in Saudi will solve all these problems at a stroke.
THAT would get out of control really quickly. What are the chances it wouldn't go nuclear? <shudder>
Probably not if the attack came from Yemen
Of course all of this could be the consequence of ramping up for WW111. Fill up the reserves with cheap oil by excutive order. We are being played.
You've been playing too much Risk in your bunker, dood.
Dump it in the ocean. No negative results from the Gulf… oil and water mix fine.
it eventuall comes to rest on the bottom, patiently breaking down and releasing other invisible poisons into the water; A good EQ in the Gulf could stir all that up and create a 'black tsunami', spreading all that tar and Corexit™ far inland-and the mess would be horrible
Maybe the russians could be of help in this situation. They gotz a massive sinkhole there, which could take up a real lot of oil. http://www.zerohedge.com/news/2014-11-20/shocking-pictures-russian-potas...
suppose russia decides to form it's own 'oil/gas -opec?', with iran, turkmenistan, kyrgyzstan, azerbaijan (?armenia?) and kasakhstan? note: georgia's 't'bilisi aligning with putins' russia! think, caspian sea and eurasia...! and greece warm-water ports opens up the mediterranean and turkey the aegean seas.
saudi arabia has managed to alienate themselves from the all [inclusive] sunni 'gulf cooperation council (gcc) which are going bust? swf's mean shit when geopolitics come into geography?, and russia's history becomes liquefied geology?!?
just think if the former satillites, once periphery nation-states under [?russification!] decide it's tyme-- now seeing with their own foreign-policy eye`I's... the imploding of the eu just 12-18 months away...
jmo
You know there's a problem if our economy doesn't take off even when oil crashes through the floor.
For F#@k sake stop it with the negative waves. Have a little faith baby, have a little faith. Why don't you say something righteous and hopeful for a change.
Seems some people here are not up on the classics. ;-)
https://www.youtube.com/watch?v=ncbEucjsNFU
Operation Gold Heist.
Kelly's Heroes was one funny movie.
there really never was a problem? sa and me oil/gas prices in usa hegemony inflated $?
should be on par with china renminbi/yuan or really below current renminbi...
how is the ussa frb gonna 'buy-back' $50 trn in debt?
jmo
Easy solution - Pump the oil back into the ground
All fields have a bearing on their biggest find - they tapped out that one first. Use those big underground holes as reserviors easy fix guys c'mon 'merica work it out - your storage ability just became infinite.
wont they have to pump out all the black goopy brine/seawater that has been pumped into those cavities? to where?
Let the oil pressure do the work - easy - Similar process is used for natural gas storage in the Brent fields.
Crude comes from sponge like rock formations not big holes.
Come and listen to a story about a man named Jed
A poor mountaineer, barely kept his family fed,
Then one day he was shootin at some food,
And up through the ground came a bubblin crude.
Oil that is, black gold, Texas tea.
Well the first thing you know ol Jed's a millionaire,
Kinfolk said "Jed move away from there"
Said "Californy is the place you ought to be"
So they loaded up the truck and moved to Beverly.
Hills, that is. Swimmin pools, movie stars.
Well now its time to say good by to Jed and all his kin.
And they would like to thank you folks fer kindly droppin in.
You're all invited back a gain to this locality
To have a heapin helpin of their hospitality
Hillybilly that is. Set a spell, Take your shoes off.
Y'all come back now, y'hear?
.
I picture a bunch of psychpath suits, like one's i've worked for in the past, showing up with the backseat of their limo's stuffed with large mcdonald's cups and handing them to the foreman and then screaming at him when the foreman tells him it's not enough.
So we will never see withdrawals again? Wow, really amazing how that chart totally has no basis in data or fact.
ponders why anyone doesn't just store it back where they extracted the non-shale stuff..after all taking it out adds to GDP, surely putting it back must add to GDP as well....well at least according to full blown ADHD pond scum who like robbing somebody famous called Peter to pay someone infamous like Paul (Krugman)...remind me again how much money Krugman has ever made that hasn't been printed by a deficit or a central bank?
Supposed to be lots of available storage but it costs more; oil has to be transported to these sites and that is costly......also there are plenty of tankers that could be used.......but my guess is that there will be 'problems' in SA and elsewhere in the Middle East before we get to that.....there already have been attacks on oil workers in SA.....the whole oil delivery network is very fragile and IS needs the oil money......all imho.....
Again Mr Tyler, anything on the EIA algos that calculate current production levels ahead of time, when later on actual production data from the individual states shows production has declined and not increased?
And are the storage calculations also based on those algos?
We all remember the photos of farmers dumping milk into rivers during the Great Depression. Should we be expecting oil spills? Do petroleum producers also provide clean up services?
just as Q1 results are released which will invariably show huge writedowns as companies will no longer be able to hide behind the SEC-mandated accounting trick...
And what's to prevent another SEC-mandated accounting trick? He who has the rules makes the gold.
jmo.
Why doesn't America cut poduction? So simple. You are getting less money per barrel. The "liquid gold" is like liquid copper. If America cut production it would realise far more wealth from its oil.
America should stop playing "oil wars".
And all other wars, as well.
C'mon, let's think outside the barrel...
We all got room in the back yard/40 to store some oil drums.
swimming pools
Well, if WLL doesn't get bought out this week then load the boat with Jan puts on that mother fucker because it will be a $5 stock if all this plays out.
"Load the boat" ... hmm ... this reminds me of something ....
Remember when I said that oil producing tax will be reduced to counter low prices?
I was correct, ...............again.
Trader who called oil’s rout sees crude below $40 http://www.marketwatch.com/story/capitulation-could-take-crude-below-40-...
Speculators Least Bullish on Oil Since 2013 as Stockpiles Swell http://www.bloomberg.com/news/articles/2015-03-16/speculators-least-bull...
Oil Heading to $35 by May Before a Rebound: Bob Iaccino http://www.bloomberg.com/news/videos/2015-03-16/oil-heading-to-35-by-may...
5 reasons oil may plunge 10% this week http://www.marketwatch.com/story/5-reasons-oil-may-plunge-10-this-week-2...
Oil Prices May Have Further to Fall http://www.bloomberg.com/news/articles/2015-03-16/fed-data-suggest-oil-p...
Saudi Arabia Needs More Oil to Feed Local Refinery Expansion http://www.bloomberg.com/news/articles/2015-03-16/saudi-arabia-will-need...
This big U.S. fracker is most likely to keep the oil flowing http://www.marketwatch.com/story/this-big-us-fracker-is-most-likely-to-k...
Oil Resumes Slump as U.S. Crude Inventories Surge http://www.bloomberg.com/news/articles/2015-03-18/oil-holds-rebound-from...
U.S. Oil Supply Growth at Record Pace Seen Pressuring Prices http://www.bloomberg.com/news/articles/2015-03-18/cushing-crude-inventor...
U.S. Oil Inventory Expands Faster Than Expected - We're running out of room for all this oil http://www.bloomberg.com/news/articles/2015-03-18/u-s-oil-storage-glut-e...
Iran Could Add Million More Barrels a Day to the Oil Glut http://www.bloomberg.com/news/articles/2015-03-19/iran-can-add-million-b...
Canadian Refiners Set to Buy More U.S. Oil With Wider Discount http://www.bloomberg.com/news/articles/2015-03-18/canadian-refiners-set-...
Oil Refineries Just Weeks Away Shut Downs: Edward Morse http://www.bloomberg.com/news/videos/2015-03-19/oil-refineries-just-weeks-away-shut-downs-edward-morse
In a mad post-Fed world, oil could be heading to $40 again http://www.marketwatch.com/story/in-a-mad-post-fed-world-oil-could-head-...
Here's the Next Biggest Threat to Global Crude Oil Prices http://www.bloomberg.com/news/articles/2015-03-20/russian-teapots-pose-n...
Shale Producers Have Found Another Lifeline: Shareholders/Muppets http://www.bloomberg.com/news/articles/2015-03-20/shale-producers-have-f...
first it was peak oil, now it's never ending over supply of oil. Gotta love zh!
Looking forward to future posts about how silver's fall to $7 will also be TEOTWAWKI lol
OK, been too busy to do any original material for a while. But here is an article I wrote about them finding 480,000 Bq/M3 of long lived tritium in a well by the reactor?
Which reactor? Fuku 1, or 2, or 3, or 4. What is your guess?
WRONG
The answer is Palisades nuclear on Lake Michigan. And the slumlord operator Entergy is stating the leak is extremely small. It is not, IT IS HUGE!
This is the 12th leak in 4 years at Palisades
Check out the story here, drop a comment, and spread the word, especially into Michigan, Chicago, Milwaukee, Green bay online newspapers.
stock out
http://nukeprofessional.blogspot.com/2015/03/palisades-one-of-worst-nuke-plants-run.html
Henney Penney, and Chicken little?
No, no, no, no, nooooo. You have it ALL wrong.
This time its different.
Big deal. The oversupply is chump change long term, and particularly so from a worldwide perspective.
Here's why:
The world burns through roughly 90,000,000 barrels of this fungible stuff (oil plus other burnable liquids) each and every day.
Now, when we talk about US storage we mean a whopping four days worth of the juice, maybe ten or eleven days of we count the SPR.
Any glitch in the increasingly fragile supply situation and we're into liquids deficit, forever.
So fear not, these perfect-storm low prices won't last much longer. Nor will oversupply.
".....yada.....90,000,000 barrels....per day?"
Not so. How would that reconcile with the decline in consumption due to universally slowing economies??
If sustained for months, as it has been, and continuing on, the number has to be a lot less than 90MM, now.
http://www.eia.gov/forecasts/steo/report/global_oil.cfm
93 million bbls/day including all burnable liquids (includes oil as well as tar sands liquids, ethanol, bio-diesel, etc)
The EIA keeps pretty decent data. 93 is the number. I shot from the hip, hit a little low with the "roughly 90 mb/d" estimate.
I'm firing up my '64 goat, tri-power and a big block.
Can't wait to have fun again!!
Little GTO, you're really lookin' fine
Three deuces and a four-speed and a 389
Listen to her tachin' up now, listen to her why-ee-eye-ine
C'mon and turn it on, wind it up, blow it out GTO
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa (mixed with "Ahhh, little GTO") wa, wa, wa, wa, wa, wa
You oughta see her on a road course or a quarter mile
This little modified Pon-Pon has got plenty of style
She beats the gassers and the rail jobs, really drives 'em why-ee-eye-ild
C'mon and turn it on, wind it up, blow it out GTO
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa (mixed with "Ahhh, little GTO") wa, wa, wa, wa, wa, wa
Gonna save all my money (turnin' it on, blowin' it out) and buy a GTO (turnin' it on,
blowin' it out)
Get a helmet and a roll bar (turnin' it on, blowin' it out) and I'll be ready to go
(turnin' it on, blowin' it out)
Take it out to Pomona (turnin' it on, blowin' it out) and let 'em know (turnin' it on,
blowin' it out), yeah, yeah
That I'm the coolest thing around
Little buddy, gonna shut you down
When I turn it on, wind it up, blow it out GTO
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa, (mixed with "Yeah, yeah, little GTO") wa, wa, wa, wa, wa, wa
(mixed with "Yeah, yeah, little GTO")
Wa-wa (mixed with "Ahhh, little GTO") wa, wa, wa, wa, wa, wa
Can't wait to hear Bartiromo bull shit spin this to "higher gas prices" for the good of the people, of course. Sheeitttt
Strange how there's no "glut" in bottled tap water ($2 a gallon),windshield wiper fluid ($5 a gallon),or Hawaiin Punch ($3 a gallon)..But hey,those things only take $.03 cents a gallon to produce,whereas oil takes $1.50 a gallon ..
Dupont Chroma Premier Ferrari yellow paint......hovering about $1300 a gallon. I just bought some, it kinda stings a bit.
Can't get that at the corner Earl Scheib.
A thought I've not seen said elsewhere:
Can you name me the last time a major controlling interest of a resource suddenly flooded the market? And, not in the "building cheaper cars" or "consumer goods to fend of communism" or even "shipping the new PS3 / Xbox at a loss to get market share" (insert: betamax / VHS there if you want) type deal: I'm asking old skool references.
I'm talking: when was the last time you saw a major player accept 50% loss on price to flood a market? (2008: $140 ish breaks the world; 2015 $40 does...?)
Why? What conditions? What effect?
Hint: minus points if you think it's about frakking. Canada's market has been at point for a while, has nothing to do with frakking, that's a smoke screen.
My mind is going back to nutmeg.
Please just shoot me in the head and call it a day!
90mm brls a day. That's a lot of trex's. Brontasauruses. and 950million year old forest leaves. Why is it that not one part of leaf or trex tooth/nail found in this black stuff. Maybe, Just maybe, that you have been told just one more lie in these training camps called school and MSM. Maybe there's no relationship between fossiles and the fuels created naturally by the mechanisms of the mantle and crust of the planet (which no human has ever been able to see directly).
Peak oil is a liberal fantasy. That 4% obscene profit margins would not go to xon, t-mobile, rig and conoco-phillips. They forget the 15-34% obscene regressive tax per gallon going away in this fantasy. They imagine xom, transocean and dick's baby HAL being destroyed and replaced with a unicorn - A earthen solar VW bus running off solar panels and windmills whereas to-weather wind power installed on vehicle hoods and rooftops would increase with vehicle speed.
Maybe the Bible is right.
That the Fed and All Central banks are owned by a few luciferians and the chief commander of this world.That the abba dude known as yellen is just a puppet as well following orders.
Maybe the Vatican and it's handler(s) has been behind each and every event to create hatred between men. That is, every war since, say napolean and every false flag attack, from 9/11 to the ageless "war" between Muslim and Jew has been fabricated from smaller false flags.
Maybe jesuits took young mohammed in and made him the "martyr" for all decendants of Ishmael and created a whole religion with one purpose. To fight against decendants of Issac. All for a final end time clamatic end-time war.
All pre-determined insolvable problem created so that one day a great peace maker with a pre-determined solution to fool everyone.
Maybe this same force has women against man. Left against RIght. Communists against Fascists and both against Captialists. Cats vs Dogs. Brother against brother. Cain against Abel.
Maybe all the bad stuff was to fan flames of enmity created by the orginal sin of transgression. Eating from the tree of knowledge.
All so that one day the force that created every drop of anger from it's own design, can come in and solve every problem it has created/fabricated. All for one reason. To get them to worship the Beast and it's image.
A beast/AC that could solve every problem that it created in the minds unbenownced to those fooled.
And have everyone bowing down to the Beast to their demise.
Cats loving dogs would get peta folk licking AC/Beast boots.
Women and men of the same country actually getting along.
Gays allowed to marry hampsters would cause allow even the most twisted to worship this new peacemaker.
Peak oil simultaneously with a financial collapse including a great depression and hyperinflation during great reset. A new "promised" economy where everyone earns the same money and would not have to work for it. This would get quite a few worship this Beast power.
Jews having O'douls (NA Beer) with Muslims - a feat only a proported god could do, would bring many in.
Nah. Couldnt happen. Not even and especially not starting September 2015....
Target, you win the JAA Joyce, stream-of-consciousness award for the week, maybe the year.
(sic) "Purported", n'est ce Pas??
At a storage facility near you soon.
You are cordially invited to the marriage of the flase flag and the rocket propelled grendade. Barbeque to follow the ceremony. No gifts, please.
Doest that mean ISIS is finally BK? Saw a few turbans in fatigues buying panning equipment in Saudi. They're trying for sand panning in the dessert.... Time to crash the gold price and flush out the weak producers. You know, it's all for national security.
Just remember, we are supposed to blame ISIS for all our misfortunes now. Be sure NOT to vote for ISIS during the 2016 Presidential elections. ISIS is bad. Vote for the loudest blowtorch fuck face who makes the best case to fighting ISIS.
Full oil storage is a problem even a war cannot fix. There's no refining capacity to burn through that quickly. Low oil prices are going to shake up the industry and bankrupt the weak hands.
But wait, isn't fighting ISIS operating both sides of the war to our own detriment?
Secede. Last every state in the nation had petitions to secede from the "Union." I would guess that is still the case.
How many RPG's carried across the Southern Border with Mexico would it take to ignite Cushing? One dozen shoulder fired rockets could change the world. Lots cheaper than nine E. Levin.
I AM NOT SUGGESTING THIS, just sayin. How may refineries could be taken down with the "stingers" held in one un inspected semi coming across the Texas border?
I wonder how many road flares could a Walmart purchased, Chinese manufactured drone carry. Lucky those that hate us for our freedoms don't think outside the box. Or and RC flying machine.
I'm thinking that in two months the nations of the world will have topped off their strategic petroleum reserves and the banisters can finally get about this business of WW3...
I predict this oil glut will be fixed as soon as Iran gets O'nukes.
They will not literally dump oil. Wells can be turned off. What will be dumped, is new exploration and drilling. Buying leases for exploration.
The currently stored oil will be held and sold out at as high a price as possible. Overall the oil companies having the stored oil will save some money while holding the price up for some profit. Shutting down refineries for various BS reasons can also boost the final profit.
Those that are situated between the ground and the storage tanks will hurt. Along with those who are in posession of those stocks and loans.
Many idle wells will also replenish somewhat. Fracked wells in particular.
The flow of oil is controlled. It's final useful products come from the bottlenecks of refineries. The price can be fixed there.
Those who have debt will. Which is everyone.
Malinvestment leads to booms then busts, news at 11.
And what do you think will happen when storage is full? They will need to cut production. Never played Command and Conquer?
A full blown "war on terrorism" in Jemen should take care of things. A convenient place to interrupt a great portion of VLCC traffic, ain't it. Think I already heard of some "terrorists" doing some very bad things over there, calling for immediate action by ... well, you guess ..
How the American/Saud OIL axis shoots itself in the foot !
Play on Pax Americana in the back yard of your new Halls of Montezuma !
US production will soon decrease, if not already the case :
http://peakoilbarrel.com/texas-rrc-report-and-other-news/
We are going through the next phase of demand destruction. The world economy is like a rubber ball rolling down a staircase. Each time it drops lower there is a little bounce and then it’s off a cliff again. Cheap oil is being replaced by expensive oil on an exponential basis. We will get to a point that soccer moms will no longer be able to drive their Yukons to the outlet mall to buy a coach purse. Even then there will be plenty of kerosene for the M-1 Abrams and A-10 Wart Hogs. As long as the EBT cards work there is nothing to fear.
just store it in all the empty malls, big box stores, and parking lots. der
Anyone else buying DWTI on margin? When you got nothing, you got nothing to lose......except my life savings. F-it. I've got to take a shot some time in my life. Bought at 100 lets see what happens.
DTO, SCO, DWTI since ... two, three months now. Jan 31 caught me by surprise. I'm holding.
I hope we will fill our strategic oil reserve that we tapped into before the last election!
I want a fucking refund for all the overpriced gas I had to pay for. Peak oil= fuck you.
How can these oil miners make money at current prices? They are forced to store the oil instead of selling it to refineries at current prices. It has nothing to do with "production booms" and everything to do with prices too low to make money. They'll rent out shipping containers and store them in the gulf of mexico. When that runs out or becomes uneconomic, then they'll lay of thousands and cut production.
Isn't $15 Silver and $20 Oil .... an historical ratio ? Buck-A-Barrel ! All oil is vegetable oil .... except abiotic .... it didn't come from dinosaurs either .... I break the great Dinosaur Myth !
"Fossil" fuels discriminate against which fossil organic matter they are magically converted???
Salton Sea's questionable oil storage prospects: The Salton Sea is the only lake that's still got water .... irrigation run off and Mexicali sewage via the New River .... great duck hunting amongst the floating turds !
http://srsroccoreport.com/shale-oil-production-will-fall-600000-barrels-per-day-by-june/shale-oil-production-will-fall-600000-barrels-per-day-by-june/ Shale Oil Production Will Fall 600,000 Barrels Per Day By June Filed in Energy by SRSrocco on March 8, 2015
The hit to oil prices may be hitting other oil producing nations. But, since they are state owned, it doesn't affect them the way it affects Americans. It doesn't destroy businesses and lives the way it does here.
So, I have to wonder if the price is set by OPEC or by big oil in the US that uses the smaller oil companies to get things started and then takes over their work.
One company, in particular, comes to mind.
My guess is that the majority shareholder(s) of that company is/are the one(s) who tells OPEC what the price will be.
http://www.interpretermag.com/russia-hosting-europes-neo-nazis-nationali...
Staunton, March 21 — Even as Moscow denounces anything it views as a manifestation of fascism abroad and prepares to mark the anniversary of the victory over Nazi Germany, the Russian authorities are hosting tomorrow a meeting of Europe’s neo-Nazis, extreme nationalists, and anti-Semites who share one thing in common – their unqualified support for Vladimir Putin.
The meeting called the first “Russian International Conservative Forum” and nominally hosted by the Russian National Cultural Center – People’s House is in fact the work of the Rodina Party and says it includes only European rightists who support Putin on Ukraine (see Rosbalt and Ekho Moskvy).
The organizers say that those taking part are “exclusively” from parties officially registered in European countries and that they could not be if they were neo-Nazi because “this is a criminal ideology which is banned in Europe.” What these parties do share is opposition to their governments “which are US puppets.”
Further, Yuri Lyubomirsky, head of the Right to Bear Arms group and one of the organizers says, “all these parties actively defend the interests of Russia regarding Crimea and the events in Ukraine’s South-East.” And he expressed “hope for constructive cooperation” between them and like-minded Russians such as himself.
Not surprisingly, this action has outraged many in Russia from the communists to Yabloko party member Boris Vishnevsky to human rights activists who have called on the government to ban the meeting and say they will picket and possibly disrupt it if the authorities do nothing to stop this assemblage from taking place.
Just how noxious this meeting is and how it underscores just how few people in Europe Putin’s regime can get to openly support it as opposed to the far larger number who are not prepared to do anything to oppose the Kremlin is underscored by the list of those who are scheduled to speak or otherwise take part.
They include:
Jared Taylor, an American who calls for white supremacy.
Nicholas Griffin, head of the British National Party and a prominent Holocaust denier.
Roberto Fiore, head of the New Force party in Italy which pursues traditionalist and extreme right causes.
Udo Voigt, Former head of the right-wing extremist National Democratic Party of Germany and now a deputy in the European Parliament noted for his anti-Semitic and xenophobic views and frequently found subject to legal sanctions for them.
Georgios Epitidios, a representative of Greece’s Golden Dawn party which is viewed in Athens as neo-fascist and neo-Nazi and whose party’s emblem is a stylized swastika.
Stefan Jakobsen, the head of the Party of Swedes and who is widely considered a neo-Nazi.
Daniel Karlsen, the head of the Party of Danes and one of the founding members of the National Socialist Movement of Denmark.
Gonsalo Martin Garcia, a leader of the ultra-right Spanish National Democratic Party.
Horatio Maria Guerre, president of the European Communist Party Millenium which seeks the dissolution of NATO and the end of what he calls “the hegemony of liberalism and the unipolar world.”
Aleksandr Hofman, the foreign minister of the self-proclaimed Donetsk Peoples Republic.
And from Russia itself, among others:
Aleksey Zhuravlyev, a United Russia Duma deputy who has attracted attention for his calls to strip the rights of those in non-traditional families to have children.
Yegor Kholmogorov, a Russian nationalist who has said that “the war for Novorossiya is a national liberation war of the Russian people for its reunification and for the elimination of invented borders.”
Stanislav Vorobyev, the coordinator of the Russian Imperial Movement who has called for “Russian men to join the joint struggle for Novorossiya under the imperial flag.”
Ivan Ovsyannikov of the Russian Socialist Movement notes that “the forum calls itself conservative, but this is a lie. These are not people like the British conservatives; these are parties of the extreme right wing.” And Boris Vishnevsky, a Yabloko deputy in St. Petersburg’s legislative assembly, concurs.
He says that he is horrified by any manifestations of interest in fascism in foreign countries but notes that he is not a citizen of any of them and consequently is “not responsible” for their laws. But he is a Russian citizen, and as such he feels entitled to ask: “Why should such forums take place in my country with the complete silence of state structures?”
“I do not know how any former [Waffen SS] legionnaires remain in Latvia,” he continues, but I consider that they are less dangerous for society that contemporary neo-Nazis who can freely assembly and disseminate their views” as such people plan to do in Russia’s northern capital on Sunday.
“And the views [of those planning to come] are xenophobia, hatred of aliens and dividing people into categories which always gives rise to bloodshed. To the manifestation of fascism in one’s own country one must react with the very same intolerance as to fascism somewhere else,” Vishnevsky concludes.
Since this will be a large gathering of Nazis and their sympathizers will John Kerry or Victoria Nuland be there?
Also will ZH poster and professional Nazi-felatio practioner NUKEISIS be there too? He loves the US Nazis and their Ukranian puppets.
Seems like a perfect venue for a false flag?
Load up tanker planes. Dump on ISIS and ignite. Or store excess in Texas swimming pools. Those folks love oil no matter what.
Looks like Retail gas sellers here have put 50 cents on top of the gasoline low as a "minimum price".
Price setting is against federal law big time.
It is all fixed. There might be one or two markets not fixed but think this is limited.
No more storage, but I still have to pay a premium after production and supply highs for 5 years.
Free oil for everyone!!! All hail King Obama!!!
"winning"...
simply a sign that the 0.1% & the Fed, possibly one in the same, droped a spinning plate. Happens from time to time, enjoy the rest of the show.
Of course. Under no circumstances must white proles get good-paying jobs to get them out of debt-peonage, nor must the Russians get a fair price for their oil, forcing Europeans to choose between heating their homes or paying for the latest follies at Chanel for the mistresses of rich parasites.
Banksters must never lose money or wars.
What happens when we hear the gurgling sound?
if i was a hedge fund manager i would be looking to buy up some of that surplus and then build storage, above ground storage adds a couple dollars to the cost of a barrel of oil, who would quibble about that when you are buying it at multidecade lows. meanwhile the fed is hopefully stepping on the inflation pedal, this is why big oil is also adding production. all i need (as a hedge fund manager) is for the fed to keep throwing cheap liquidity ont he market (through REPO, there is already enough QE in the system that it can provide liquidity for years to come, they just need the REPO window to keep it rolling forward - Greenspan did this once before and the markets loved it) even while the fed takes those rate hikes in baby steps (what a fraud). meanwhile figure out who builds these storage tanks and buy them. the fed has gotten into a spot where they are a lot more transparent than they like to be, (already Yellen is parsing words like patient, but its not genuine Greenspeak) and that is the main danger.
Which comes first,Nasdaq 10,000,or WTI $90 ?..For what it's worth,my money is betting on WTI..
All bets are off once Israel bombs Iran to stop Iran from doing what it is already not doing.
Then there's all those NATO tanks in Eastern europe.
They'll use up a lot of fuel... for a while.
Thats a stupid meme. Armies do not use that much oil compared to society at large. Hundreds of millions of motorists and plane passengers use a lot more oil than hundreds of thousands of military vehicles and a few thousand jets.
The myth most likely comes from late WW2 when Germany was crushed due to, among other reasons, a lack of oil, and thats only because they actually ran out.
Haley's Comet has oil.
I read that it wouldn't cost a lot to expand storage...
So why are you telling storage capacity won't be enough in june without considering actual storage can also be expand ?
As Bush 41 once said: Not..gonna..happen. Actually, it might happen if 100+ ADDITIONAL wells per month are drilled in the Bakken. Ok, not gonna happen.
In a matter of an afternoon, the ND legislature can enact a bill and get it signed to get rid of the BS. Obviously the law as it exists is not in the bezst interest fo anyone in ND.
Storage ain't gonna fill up and the ain't gonna pump the oil on the ground. That is insane. Shut ins will happen long before. And wells are being fraclogged - drilled but nor completed.
Moreover, the way the EIA shows storage data, it infers that 100 Million barrels are in STORAGE. They are not. They are linepack in pipes and NOT freaking storage. That oil will be there until they empty the pipe.
Yes there may be some problems at Cushing, vut that is not the only storage available.
So don't get too excited about shorting oil and buying a GTB just yet.
Now the Black Swan even is the BS Obama Iran ass kissing. That could sink the market if the sanctions are removed quickly.
Storage and production will level off in the next 6 weeks or so.
Ha! Hilarious......and Guaranteed to not play out as laid out here
What I find highly curious is that gasoline priced NEVER follow past trends and price differential from crude.
It is a fraud in everyone's faces. Price fixing and gouging by the oil companies.
Just a few months ago, ZH was being bombarded with articles saying how much of a hoax fracking was - with precipitous production decline rates - to the point that fracking oil would even run out in just a few more years!
Now, despite a huge decline in active rigs, we are being given hockey-stick projections of production increases worthy of Fed economic forecasts. Really? Are we filling storage from 60% to 100% in just 2 months- and right as peak driving season begins? Right...
No, despite the popular narrative that we keep hearing, the U.S is not running out of crude oil storage. Yet there are those who are predicting that oil prices are going to fall to $20 or $30 a barrel, pointing to the crude oil storage numbers and suggesting that we are near maximum capacity and therefore a price collapse is imminent. (Although Goldman Sachs did some backpedaling on their forecast this week).
The argument goes something like this: US running out of room to store oil; price collapse next?
At first glance, the argument seems to be pretty straightforward. But let’s dig into the data a bit. Admittedly, if you look at the storage numbers in the nation’s most important oil storage hub (and the price settlement point for West Texas Intermediate on the New York Mercantile Exchange) in Cushing, Oklahoma, it’s easy to form the impression that storage is filling up and an oil price crash is inevitable:
Since early October, crude oil inventories in Cushing have increased each week by an average of 1.4 million barrels (and as noted above, over the past 7 weeks crude inventories have increased at 1 million barrels every day across the entire U.S.). But there is some important context missing from the graphic (and that’s not even considering that some are storing oil in anticipation of higher prices later this year).
Any time someone claims that we are nearly full on crude oil storage, I ask them to quantify that. “Highest levels in 80 years” isn’t quantified. You could be at the highest levels in 80 years and only 10% full. And in the graphic above, one thing that is missing is how much storage volume is actually available at Cushing. The answer is 71 million barrels (with more storage under construction). So even if inventories there continued to build at the recent pace, it would be nearly four months before Cushing would actually be full. But, there are several mitigating factors that minimize this possibility.
We are currently in the season when refinery utilization is lowest. Refiners take equipment offline in fall and spring to do maintenance, so they use less crude oil at this time of year. This maintenance usually peaks in March, and then crude oil demand picks back up as refiners gear up for the summer driving season. The difference in refinery demand between this time of year and summer is generally around a million barrels per day, so even if nothing else changes that storage build should start to flatten.
Further, two other variables are also changing that will impact the storage build. The first is that the budget cuts and cost saving measures that oil drillers are instituting in response to lower prices will start to dampen oil production growth relatively soon. In the Energy Information Administration’s latest Short Term Energy Outlook, the EIA forecasts crude oil production to peak in the second quarter of this year and then decline by 180,000 barrels per day in the third quarter.
Last but not least, demand is picking back up. Automakers have been reporting higher sales of SUVs and pickups as gasoline prices have fallen. In turn, the average fuel economy of the U.S. fleet has recently declined. As a result, seasonal demand for gasoline has risen to its highest level in four years:
These factors will all slow and eventually reverse the buildup of crude oil in Cushing. And of course Cushing isn’t the only place crude oil is stored. The EIA recently reported that across the nation, crude oil inventories are only at 60% of capacity:
The EIA reports that across the U.S., total crude oil working storage capacity was 521 million barrels as of last September, and as of March 6, approximately 320 million barrels of that volume was being used. (While theWeekly Petroleum Status Report currently lists crude oil inventories at 444 million barrels, the EIA states that about 120 million barrels of this is in pipelines, on ships, or oil that is locally stored and has not entered the supply chain.)
If Cushing continues to fill, oil producers will start looking at some of those other areas to store their crude. And with 200 million barrels still available, oil producers could continue to add a million barrels a week (which is about the average over the past year) for nearly 4 years before crude oil storage is actually full.
So in summary, the narrative being pushed that the U.S. is running out of crude oil storage is false, most likely repeated by those who haven’t bothered to actually check available crude oil storage.
It may also be pushed by those who have a vested interest in seeing oil prices fall, and some who have predicted $20/bbl oil seem to be pushing this notion the hardest. Not going to happen. That isn’t to say that the price is headed back above $80/bbl any time soon. The price is likely to be soft for a while as the inventory build continues. But it isn’t going to collapse to $20.
http://www.energytrendsinsider.com/2015/03/11/is-the-u-s-running-out-of-...
You can buy 55 gallon drums for less than a buck a gallon. If storage gets tight and the price falls then thousands of low production wells will simply pump their production into these barrels and stack them up across the Texas, Oklahoma, and North Dakota prairies. Lots of room to stack.
I don't care how low Oil goes, here in Germany we pay 3.5$(converted) per gallon of TAX, while a gallon costs 5.5$, even if Oil was given free I'd still pay 4$+ a gallon, fuck socialism!