Capitulation In Rig Count Collapse?
Submitted by Arthur Berman via OilPrice.com,
After last week’s moderate drop in rig count, the amount of horizontal oil rigs seems to implode this week.
The U.S. land rig count was down 37 this week and the land horizontal rig count was down 30.
The tight oil horizontal rig count was down by 20 and the key Bakken-Eagle Ford-Permian HRZ rig count was down by 14. The Bakken lost 3 rigs, the Eagle Ford, 4, and the Permian, 7.
Shale gas lost 8 HRZ rigs. The Haynesville lost 2, the Marcellus, 6, the Utica 1, the Fayetteville, 1. The Woodford and Barnett each gained 1 rig.
Is this capitulation? Hard to say but it's the biggest drop since March 2015.
And, the Fayetteville Shale play officially bit the dust this week with zero rigs for the first time since the play began in 2005.
Game Over!
(11 votes)
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Too little, too late...
1st week into the new year and this is what you get... I guess some decisions had to be made over holidays. By the way, how is that oil price "war" against Russia going for you ? :)
Oil? Rigs? Who cares.
It matters what Kyle Bass has to say about fiat money and fiat instruments to fiat a currency.
FYI, oil rigs matter more than fake money. So does gold...
Time to take a position in UCO. Too many possible events to trigger some upside. This isn't like a stock that can go to 0 and declare bankruptcy. Peak oil hasn't been repealed. It's a finite resource. They're just speeding everything up with this internecine war.
Actually it can go to 0 due to the contango effect on futures
True of an ETF. Not true of oil itself. I would not long a commodity ETF, but I would short a bear commodity ETF.
Yes, your truth is true :)
monk27: FYI, oil rigs matter more than fake money. So does gold...
Oil matters because once we starting running shorter of oil humanity is in a big boo-boo.
Gold will matter during the FINANCIAL-COLLAPSE. Worthless POST-COLLAPSE.
Thats not happening anytime soon. Did you vote for Obama?
He most probably voted for Dilma... which rhymes with Wilma (Flinstone, that is...). Otherwise it's inexplicable how he can utter such an enormity like "gold is worthless post collapse". But then Brazil is not exactly a succesful economic or financial world power by any means...
His Hedge fund hasnt done all that well last year. Overated.
The rig numbers... Are rigged!
well well well
These are crude jokes.
need to be refined
That and last I saw ND was claiming only 40 layoffs. At some point they had around 217 rigs so they lost at least 160. So what's that 1/4 of a man per rig? This new technology is kickass.
But these are just the US rigs.
The poor countries just go full retard to find any revenue left and pump like hell.
So the game is not over yet.
When you have a rig and it's paid for, you just add more pressure to the pumps and worry for the maintenance costs down the road.
http://thearchdruidreport.blogspot.com/2016/01/down-ratholes-of-future.html
I don't agree with the "Peak EROEI" thinking, but you have to give the ArchDruid credit for his prediction about shale oil.
Most shale oil rigs have a half-life of about 1 year. The guy knows that and has been spot on...
Plenty of people with basic math skills and physics knowledge said this would happen because it had to happen and now it is happening. No one listened. The "oil price war" meme is as absurd and pathetic as the "shale revolution" meme was - both are creations of the same banks and industry shills who are now trying to find one last crop of greatest fools to take all the bad debt and equity before the entire industry collapses. I still get the "invest in shale, guaranteed income" ads on ZH every day.
Damn, look how quick the rig count was dropping in the Fayettville while everyone else was booming hard. Why? Because it's a mature field and shale decline rates are ghastly... that bitch was starting to roll over. This will happen with all of them. They call it a miracle.
There's no excess oil out there. Not for sale by the Cabal anyway at these Prices.
There is oil out there, but not cheaply produced oil... Thus, at current prices, the producers are gonna get smashed to pulp until some sort of equilibrium (likely at higher prices) will ultimately emerge.
What happens if the cost of hedging goes way up or no one is willing or able to play the other side of the price game? Laws of economics say that at some point price, supply and demand will go to extremes before they return to in sync. As economies implode dropping demand, the producers and developers will shut down until demand once again exceeds supply and prices rise. Far easier to shut down than start up.
Oh, wait... laws don't apply anymore.
Someone in Riyadh is thanking Allah for small mercies.
Looking at the rig count chart, except for a few weeks in the middle of the year, every week in 2015 felt like the final capitualtion. On the other hand, it has to happen sometime, so maybe this is really it.
Oil bailouts in 3 - 2 - 1
They're going to nationalize shale production sooner or later.
We already subsidize them billions of dollars a year, even when oil was $140 a barrel.
Ha ha ha ha ha .. Thats a good one.
I read today that gasoline may hit a buck a gallon in parts of the US soon. Already as low as $1.42 in low tax states such as Missouri, Oklahoma, Arkansas, South Carolina. Never thought I'd see that coming. What a joke the Peak Oil thing was.
Peak Oil may be a joke, but I promise you "Peak Recession' won't be.
Think we for sure see oil in the $20s and that will be capitulation. But the question is, does it then flatline???
It's called Deflation. The only parts of the economy that are doing well are the financial parts, and they don't need much energy. All the rest is credit based speculation, so little real demand for energy. Cushing and all the other storage facillities are full, and there are more and more full tankers sitting at anchor waiting for a buyer. Billions in inventory that are turning into millions in inventory. I imagine that slipped decimal is gonna play hell with more than a few hedge funds, banks, and anyone else in the financial food chain. So, between Mr Market trying to crash now, and the 4thQtr numbers that will look like dog vomit, MAJOR BUYING OPPORTUNITY !!!!!
Sell the poop
Buy the vomit
The comments aren't crude enough yet... WTF?
The M/E markets are melting down, and the Vikings barfed up a "chip shot".
Ray Finkle wouldn't have missed that one. lol
A young man from here in town was in N Dakota for the past two years in the shale field, working on pipelines. I told him last summer things were about to get ugly and he should consider another job opportunity. He laughed and said his employer said there was no need to worry. Said the same thing at Christmas. Just saw him today. He's been laid off. No work in forseeable future and company could not keep him on. Said he was going to try to get a couple of part time gigs, which means in next months employment data he will be counted as two new hires lmfao. Insanity
So, does any analyist have an idea where the production for Fayetteville will be heading to now... It does seem like we are entering over reaction territory when oil provinces go dry, my bets will be on the end of 2016 showing some serious price increases in oil. pricing
Production has held relatively stable:
https://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_m.htm
But Bloomberg forecast 470k reduction this year. Don't count on it. Us will ramp up exports of WTI regardless of price because overseas refiners will desire a certain % for their operations.
http://www.oilandgasinvestor.com/us-crude-exports-tale-sweet-and-light-s...