Oil Price - Nov 16

[dan_s]

Bloomberg: Shale King Hamm Wants to Give Oil Forecasters a Reality Check.

The boom in U.S. shale-oil production requires "more sophisticated" forecasting than ever, billionaire oilman Harold Hamm said in an interview.

Hamm, who is set to speak Thursday during a U.S. Energy Information Administration event, blames overly optimistic government production predictions for depressing U.S. oil prices. "It just disadvantages the U.S. market," said Hamm, the founder and chairman of Continental Resources Inc. The EIA is "a very powerful market mover, and so it’s necessary they understand all of these things." Hamm, who also serves as the head of the Domestic Energy Producers Alliance of oil producers and industry trade groups, is slated to appear alongside an EIA analyst and outside forecasters during a webinar examining the agency’s crude forecasts. "EIA is on that world stage with us, as the swing producer in the world, and so it’s going to require better, more sophisticated methods of forecasting -- more so than ever before," he said.
-----------------------
IMO Harold is right about this. I have been looking at EIA reports for decades. Their production forecasts have been off for decades. They put too much weight on the trends, so they always miss the changes in the trends.

EIA is part of the grossly overfunded Department of Energy. Like most of the Federal Government's agencies, the people who work there have an agenda. Their primary goal is to keep their jobs and keep getting lots of funding. If I was "King for a Day", I would slash their funding by at least 50%.

[dan_s]

Video interview with Harold Hamm here:
https://www.bloomberg.com/news/articles ... lity-check

[dan_s]

From Bloomberg:
Oil held near $55/bbl as traders who were once certain OPEC and Russia would extend their output cuts beyond March aren’t so sure anymore. Futures were little changed in New York after falling 2.5% the previous two sessions. U.S. crude output climbed for a fourth time to 9.65 million b/d, the highest in more than three decades, according to the EIA. Nine out of 11 analysts surveyed by Bloomberg had forecast a stockpile decline.

My Takes:

1. OPEC and Russia must have higher oil prices to survive. I will be stunned if they don't extent the production cuts when OPEC meets on November 30. They may only extend them until June 30, but that should do the trick since demand for oil ALWAYS ramps up in Q2. For example, in Q2 2017 demand for oil increased by 2.3 million barrels per day over Q1 2017. If that happens again in 2018, this world will need every drop of oil that OPEC and Russia can produce.

2. Harold Hamm and I believe that EIA is still over-estimating U.S. oil production growth. When the actual U.S. production for September comes out it will show a decline from August because of Hurricane Harvey.

So... and OPEC / Russian extension of the production cuts on 11/30 and actual U.S. oil production going down in September just might push WTI up to $60.

[dan_s]

This is interesting.

Bloomberg: Mexico is scouring the earth to stock up on diesel fuel before market-liberalization measures take effect. Pemex has been on a buying spree of about a tanker load of diesel a day from the U.S. alone this year and recently purchased it as far afield as the U.A.E. and China. Mexico is set to lift price limits on the fuel, used to run heavy trucks and generate electricity, making 2018 prices uncertain.