News and Commentary From

13 Weeks
Active rigs declined -13 to 744 and the 13th consecutive weekly decline. Active oil rigs declined -9 to 555. Keeping production at the current level is going to become progressively harder as active rigs drop to a 15 year low. Continue reading
US Facing Oil Tsunami
There is a veritable wave of oil headed for America and it will push crude prices significantly lower. Middle Eastern countries are in a bidding war about who can sell oil the cheapest. Continue reading
Costs Down, Production Up
Oil producers are continuing to slash costs every quarter but they are still raising production. This has got to be OPEC's worst nightmare. Continue reading
Crude Prices Lower for Longer
Investors betting on a rebound in the price of oil better have a very long time horizon. Companies are still reporting increases in production despite slashing drilling expenses and laying off thousands of workers. Continue reading
Rusting Dinosaurs
When oil was $100 a barrel it barely made sense to spend billions of dollars to drill multiple wells and build a production platform to set on top of them. At $45 oil it makes zero sense. Continue reading
New Record Ahead
It is only a matter of time before U.S. oil inventories set a new 40-year high. Inventories increased last week by 7.8 million barrels and we are just getting started in the inventory season. Continue reading
LNG Disaster
The LNG explosion is going to cause ripples felt all around the world. Five years ago, there was a race to build LNG export facilities worldwide. Today 75% of them may never be completed. Continue reading
Trillion Dollar Disaster
The sharp decline in crude prices is on the verge of causing a trillion dollar disaster. Low prices do not just mean lower profits but in many cases higher losses and cancelled projects. Continue reading
Low Gasoline Prices Will Not Last
The price of gasoline is directly related to the price of oil and crude is cheap today and will be getting cheaper. However, this is a short-term event and the price cycle will eventually repeat. Continue reading
Goodbye Shale Producers
The U.S. shale revolution is over. Very few companies can still produce at a profit and the rest are heading into the abyss as production declines and cash burn accelerates. Continue reading
Pumping Red Ink
Shale producers drill $12 million wells with production that declines 95% over the first three years. Are they really making money? Continue reading
Running out of Cash
Several weeks ago, I wrote an article on the cash drain for Saudi Arabia. The kingdom was returning to the bond market to raise $27 billion because of falling oil revenues. Qatar has joined in that hunt for cash. Continue reading
Trouble Ahead
I am sure you have heard the saying that you can put a frog in a pot of cold water and then turn up the heat and the frog will die rather than jump out as the water warms. The change is so subtle that the frog does not realize he is in trouble. Continue reading
Walking a Tightrope
The $40 level on WTI is holding but the margins are razor thin. This is the equivalent of walking a tightrope between two skyscrapers. One misstep or one headline could lead to a fall to much lower levels. Continue reading
Rigs Up, Oil Down
Active oil rigs are up +42 rigs since the low at the end of June. Over the same period, oil prices have declined more than -30%. What is wrong with this picture? Continue reading
Saudi Arabia Going Broke?
Saudi Arabia may have declared war on U.S. shale producers in hopes of running them out of business but they may have waited too late. Continue reading
Lookout Below
With all the major oil companies warning of tough times ahead for oil prices the energy sector plunged to new lows last week. If enough credible people warn you of a coming disaster maybe we should believe them. Continue reading
Who is Winning the Oil War
OPEC is pumping at 100% of capacity and prices are still going down. They have run out of additional production capacity to bring online to offset the lower prices they are receiving. While Saudi Arabia can still make a profit at $50 oil that is not true for other producing nations. Continue reading
Offshore Drilling Crash
With the price of crude oil rapidly declining and approaching $50 again the cost of offshore drilling is forcing some companies to reconsider their programs. Some of them will pay huge penalties to reduce E&P expenses. Continue reading
World Massively Oversupplied with Oil
The IEA claims oil prices may fall further before prices firm in 2016. The IEA claims there will not be any non-OPEC production growth in 2016 for the first time since 2008. Continue reading