Oil Prices

[HitandRun]

Thanks to Specuvestor for pointing out the PROJECTION/ESTIMATES by EIA. If anyone is interested, this is the report by EIA:

EIA Drilling Productivity Report

P.S. Do note that the month on month legacy decline for oil production without any new additions is projected to be ~ 300k+ bpd.

P.P.S. Actual data typically takes a long time to come in, up to 2 years AFAIK.....

[specuvestor]

Ya it's projection that's why it's DATED March / April

And they have been revising downwards their projection as per below, which I said their estimate was optimistic

Like any statistical numbers or projections, actual figures and adjustments will occur but will not be significant 3 months forward ex-post, unless it is done by some developing countries. After 3 months they can adjust for historic accuracy purpose but not going to move the needle.

(Vested in WTI futures)

The looming threat to American oil output

Tom DiChristopher
Thursday, 12 Feb 2015

http://www.cnbc.com/id/102419892

Boon san

Thanks for the link. However, I cannot understand what this analyst, Michael Cohen from Barclays is saying.... He said that rig count fell by 600 in 2008/2009 period in Texas but oil production only fell by 50,000.

I cannot believe how slip shod his analysis is!

Baker Hughes Rig Count

If one bothers to look closely at the data, the overall rig count dropped something like 1155 rigs from peak to trough in 2008/2009. BUT, most of the drop in rig count is due to gas rigs! If one looks only at oil rigs, the total drop in 2008/2009 period is a mere 263 rigs for the whole country, i.e. USA!

I wonder whether he understands anything about rig count in the first place.....

P.S. I'm not even a professional analyst. The only analysis I do is for my own portfolio...

Based on the link, the highest number of oil rig count during 08-09 was 429 in oct 2008, down mere 263 for the whole country of USA. Do you consider that as significant?

That said, the oil rig count rise from 09 is primarily from shale and this drop past 6 months will curb US production significantly. I continue to believe US oil production will peak/plateau/inflexion sometime next month or so. ie i think EIA estimate might be too optimistic for rising US production this year. Let's see.

PS EIA forecast is oil production will peak in 2Q15 at 9.41m until 2Q16, which I think is optimistic after cutting 1Q15 from 9.35m to 9.26m. I don't know about 2016.

[HitandRun]

Ya it's projection that's why it's DATED March / April

And they have been revising downwards their projection as per below, which I said their estimate was optimistic

Like any statistical numbers or projections, actual figures and adjustments will occur but will not be significant 3 months forward ex-post, unless it is done by some developing countries. After 3 months they can adjust for historic accuracy purpose but not going to move the needle.

(Vested in WTI futures)

Eh bro, if you track EIA's projection from month to month, you will realise that they keep revising their data.... because the actual data only come in, in dribs and drabs...

Have said that, the precise month isn't really important to me. I just need to be approximately correct.

[specuvestor]

Eh bro you seemed to have a perception you are the only one tracking EIA. The spreadsheets are there for all to see. The actual figures stabilizes within 3 months. One can start monitoring how the dec 2014 figures change going forward. That's the nature of statistics; that's not the nature of oil production

Someone who focuses on approximately right rather than precisely wrong doesn't talk about minute adjustments 2 years later. Even complex GDP or CPI data are adjusted 2 years down but of insignificant changes. Like I said don't wait to weigh a fat man before concluding he is fat

To each his own, as long facts and temperament are reasonable

[HitandRun]

Eh bro you seemed to have a perception you are the only one tracking EIA. The spreadsheets are there for all to see. The actual figures stabilizes within 3 months. One can start monitoring how the dec 2014 figures change going forward. That's the nature of statistics; that's not the nature of oil production

Someone who focuses on approximately right rather than precisely wrong doesn't talk about minute adjustments 2 years later. Even complex GDP or CPI data are adjusted 2 years down but of insignificant changes. Like I said don't wait to weigh a fat man before concluding he is fat

To each his own, as long facts and temperament are reasonable

Ha ha....good to know that you have been studying EIA reports closely. Personally I don't, I'm lazy and I only rely on clever analysts who studies them. Do you track TRRC reports too? Just a word of caution since I'm not the one trying hard to predict the plateau/ peak/ inflexion.

[Curiousparty]

Does anyone have any idea how often EIA update their oil price projection ? Tks

[specuvestor]

Eh bro you seemed to have a perception you are the only one tracking EIA. The spreadsheets are there for all to see. The actual figures stabilizes within 3 months. One can start monitoring how the dec 2014 figures change going forward. That's the nature of statistics; that's not the nature of oil production

Someone who focuses on approximately right rather than precisely wrong doesn't talk about minute adjustments 2 years later. Even complex GDP or CPI data are adjusted 2 years down but of insignificant changes. Like I said don't wait to weigh a fat man before concluding he is fat

To each his own, as long facts and temperament are reasonable

Ha ha....good to know that you have been studying EIA reports closely. Personally I don't, I'm lazy and I only rely on clever analysts who studies them. Do you track TRRC reports too? Just a word of caution since I'm not the one trying hard to predict the plateau/ peak/ inflexion.

Like I have said categorically before I am not an expert. But I read and understand how the real world works. By the tone of your posts past few months you should be the expert or industry-insider in oil since you done better job than clever analyst like Michael Cohen.
http://www.valuebuddies.com/thread-5541-...#pid107153

And of course better than VBs here who probably don't come from the oil industry either, but probably also not stupid in their own field of competence.

CF

Is it just me or are forumners really uninformed?

IMHO, forumners' understanding of the fundamentals of oil is "lacking" too.

My previous assertion is that it will take ROUGHLY 6-9 months for oil production to be hit, so ROUGHLY will be around March or 2Q period. But you seemed more interested in the exact meaning of plateau vs peak vs inflexion. I wasn't even trying to be exact... but it doesn't take a prophet to see what's coming
http://www.valuebuddies.com/thread-5541-...#pid105254

And not so different from the approximation you wrote for year end decline, except we differ in timing:
http://www.valuebuddies.com/thread-5541-...#pid104659

The next Act that hasn't happened prominently yet which I discussed late last year is the credit downgrades and tightening for the shale producers.

You are a smart guy like Freedom with a better-than-thou attitude, and I'm not ashamed to say that I have learnt info from your posts in oil, that's why I come to this forum. Maybe that's why others come to... you know, exchange ideas even though they are not experts? But in my books you guys are academics, both of you will do well in your area of competence.

I can learn from anyone as long as facts and temperaments are reasonable.

[HitandRun]

Does anyone have any idea how often EIA update their oil price projection ? Tks

Wah.... that's a difficult question to answer, especially since they publish so many reports. One of the reports that you may wish to refer to is the STEO, short term energy outlook. It is published on a monthly basis....

But hor, EIA is just one of the many energy agencies/forecasters. If you look back at their track record, I think it is a bit iffy, whether one is looking at production volume or price....

[HitandRun]

You are a smart guy like Freedom with a better-than-thou attitude,

Ouch! It hurts to be compared to Freedom. I thought that maybe I'm a bit taller and more handsome.

The next Act that hasn't happened prominently yet which I discussed late last year is the credit downgrades and tightening for the shale producers.

Well, some of these guys are not waiting for the next shoe to drop. OAS, GDP, BCEI have all conveniently issued new shares in rapid succession to boost their balance sheet. WLL is putting itself up for sale, after getting drown on all that debt from Kodiak. I suspect that HK and TPLM might be drowning soon.... if the oil price doesn't recover quickly...

[HitandRun]

HAR Oil Patch Update

First, a study revision.

Q: Why are the Bakken and Eagle Ford regions the key areas in USA to watch?
A: Because on an aggregate basis, they produced approx 3 million barrels a day. This makes up the bulk of LTO (shale oil) in the US, which is of course the only reason why US oil production (and the world's oil production) went up in the past 5 years.

Q: What is happening at the Bakken region? Are declining rig counts contributing to increasing oil production too?
A: Ha Ha. Clever analysts like this one appear to suggest stuff like that: Oil Should be at $20 However, I think these clever analysts are probably overpaid, i.e. their analysis is not worth the paper it is written on. I mean, if declining rigs can contribute to a higher oil production, why have any rigs at all? Oil production might even go to infinity. But seriously, for a more nuanced analysis, please read this: Bakken oil production might be declining already lah...

And the fact that the analyst also complained about accuracy of data (à la this pompous oil non-expert) , "the data on Texas is a mess, and even the EIA’s “historical” data for Texas involves extrapolations, which are particularly large for the most recent months of data available at any time. If Eagle Ford production is now declining , it may take several months to become clear that’s actually happening.", I think that it is priceless!!!

[yeah, yeah, I've heard of the fools don't differ quote too]