http://www.sandiegouniontribune.com/new ... y-dollars/
Robert Rapier (an EPG member) and I were interviewed on 5/26 for the article at the link above. Rob Nokolewski is a reporter based in New Mexico.
Where to oil prices go from here?
Where to oil prices go from here?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Where to oil prices go from here?
I have gotten several calls this week asking me if I think the upstream companies will ramp up drilling and completions with the rise in oil prices. My answer is NO.
Upstream companies do not move quickly. They don't run into the office and say, "Hey, oil is up a few bucks today, let's contract some rigs and drill more wells!"
Just like they did not move quickly to reduce their drilling activity when oil prices fell, they will not increase them with this latest run up in oil prices. Capital expenditure budgets for the year are set in stone. It will require board action to increase those budgets. The boards are cautious and they need to shore up balance sheets first. IMO it will take a sustained period of WTI over $60/bbl before we see announcements for increased drilling.
Of course there will be a few exceptions.
Keep in mind that REGARDLESS OF HOW HIGH OIL PRICES GO THIS YEAR, U.S. production will keep falling well into 2017. The active rig count will need to double to increase production.
Read: http://www.investors.com/news/oil-toppe ... &ven=yahoo
Upstream companies do not move quickly. They don't run into the office and say, "Hey, oil is up a few bucks today, let's contract some rigs and drill more wells!"
Just like they did not move quickly to reduce their drilling activity when oil prices fell, they will not increase them with this latest run up in oil prices. Capital expenditure budgets for the year are set in stone. It will require board action to increase those budgets. The boards are cautious and they need to shore up balance sheets first. IMO it will take a sustained period of WTI over $60/bbl before we see announcements for increased drilling.
Of course there will be a few exceptions.
Keep in mind that REGARDLESS OF HOW HIGH OIL PRICES GO THIS YEAR, U.S. production will keep falling well into 2017. The active rig count will need to double to increase production.
Read: http://www.investors.com/news/oil-toppe ... &ven=yahoo
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Where to oil prices go from here?
Oil price down a bit on Friday because U.S. dollar index is up. See: http://www.marketwatch.com/investing/index/dxy/charts
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group