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The Forum > Article Comments > This is what needs to happen for oil prices to stabilize > Comments

This is what needs to happen for oil prices to stabilize : Comments

By Dan Doyle, published 21/9/2015

But overall, rising global demand and shrinking U.S. production (and other areas as well) will begin to eat away at inventory. It just requires some patience.

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Taswegian,
Well it certainly looks like 2015 is the all liquids peak.
Maybe there will be a short term spike in production but long term it
has only one way to go.
Withe large number of drilling rigs put into mothballs it might be as
late as 2017 before a large fall becomes apparent. There are a lot of
drilled wells that are yet to be completed and put into production.

What a lot of people do not seem to realise is that the tight oil does
not have the same production output of diesel and petrol per barrel as does crude oil.
I gather the value at the well head is something like $10 less than
crude oil. On top of that because the lifetime of the wells is so
short, the pipeline companies will not extend their pipelines to
the individual fields. The result is they have to get the oil into
trucks and then to a railhead.
Also not all refineries can use the tight oil. That probably means
longer transport.

I suspect what is happening is the end users are splitting.
Those than put off buying fuel, or it being worthwhile to spend
money on economic use methods.
Then others such as farmers who have no choice but to pay and pass it on.
Posted by Bazz, Monday, 21 September 2015 1:41:56 PM
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