News and Commentary From OilSlick.com


Russia Holds the Key to Prices
You probably witnessed the short squeeze in crude oil twice in the last three days. With fundamentals becoming increasingly bearish nearly every commodities trader was bearish. Continue reading
Capitulation
You know it is time to buy energy stocks when analysts begin to capitulate on the entire sector. Barrington analyst Rudolf Hokanson said current fundamentals are so badly flawed that any investment in the sector would be purely speculative. Continue reading
Oil or Water?
How far can you go on a bottle of water? If you do not have any water, your travel distance on foot is pretty limited. On a gallon of water, the average individual should be able to walk 25 miles in one day or about the same distance as you can travel on a gallon of gas in 30 minutes today in a modern car. Continue reading
Iran War with Saudi Arabia?
Last week Saudi Arabia executed 47 "terrorists" and enemies of the state. One of those enemies was Nimr al-Nimr, a leading Shiite cleric. Iran is not happy! Continue reading
OPEC Propaganda Scheme
Don't believe everything you read in the headlines. That is especially true if the source is OPEC or Saudi Arabia. Continue reading
Head Fake
Crude prices rallied +4% on Wednesday after the EIA inventory report showed a decline of -5.9 million barrels. That was the biggest decline in months but it does not represent reality. Continue reading
Worst Case Scenario
If you are an oil producer, you are facing a worst-case scenario today. Crude oil has declined to $35 and the outlook is worse than it has been in months. If you are bleeding cash at $40, you are not going to like the picture at $30. Continue reading
19 Million Barrels Missing
Energy investment bank, Tudor, Pickering, Holt & Company said the oil industry has deferred or cancelled about 150 projects that could unlock 125 billion barrels of oil over their lifetime. Continue reading
A Production Climax is Approaching
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