Covid-19 and Russia collusion to kill shale! Film at 11.

[Elderberry]

Watts Up With That? by David Middleton 3/9/2020

As the Democrat-media-fueled Covid-19 panic continues to batter the global economy, Russia thinks they see an opportunity to kill the evil capitalist “shale” players…

Mar 7, 2020, 09:58am EST
Russia Yanks A Leg From U.S. Shale’s Three-Legged Stool

David Blackmon Contributor
Energy

For the last two-plus years, the U.S. shale industry has been able to continue its oil boom thanks to the existence of a figurative 3-legged stool of support. Those three legs have been easily identifiable:

*The ability to legally export crude oil to other countries;
*An ongoing license to build pipelines and conduct fracking operations; and
*The continuation of the OPEC+ deal limiting exports by other oil producing nations.

So long as all three legs of that stool remained in place, crude prices have remained healthy enough to allow shale operators to continue drilling wells, increase overall U.S. production and for the most part remain fairly profitable. But, as with any stool, the removal of any one of the legs upsets an undeniably delicate balance, potentially spelling disaster for anyone sitting atop it.

On Friday, Moscow yanked one of the three legs from the stool by refusing to agree to additional export cuts that had been unilaterally proposed by the OPEC member nations on Thursday without Russian representatives in the room. Crude prices immediately collapsed, experiencing their worst day in more than 5 years with a drop of 10%.

More: https://wattsupwiththat.com/2020/03/09/covid-19-and-russia-collusion-to-kill-shale-film-at-11/

[Smokin Joe]

Prices will recover; every bust brings a boom. Low prices don't benefit the Russians nor the Saudis, even in the long run. Unconventional resources are here to stay, although the rate of development may slow for a little bit.

In the meantime, 'healthy' operators will continue to drill, although some will slow down. Lest we forget, the last time oil ran up to 100+/bbl, it was the companies which had oil to sell who made the real killing. Everyone else was behind that curve, and some have suffered as a result.
DUC wells will likely increase again, with production/stimulation costs being a major factor in how many will be brought on line. While speculative infrastructure development may stall, that for existing production may continue.
Those companies who are relying less than ideal plays or are trying to build a production base by using their IPs for cash flow to keep drilling and completions going are going to be hurt the worst.
The strongest and healthiest companies will get ready for the next price runup, taking advantage of a buyer's market in services to reduce costs even further. 

[TomSea]

Yes, this needs to be paid attention to.

Xi and Putin are shady characters.

I have a similar read I will post.

Though, I don't think China would unleash this hell on their own people and they, over there, some of the fringe will say the USA created this. CIA or someone.

[IsailedawayfromFR]

Prices will recover; every bust brings a boom. Low prices don't benefit the Russians nor the Saudis, even in the long run. Unconventional resources are here to stay, although the rate of development may slow for a little bit.

In the meantime, 'healthy' operators will continue to drill, although some will slow down. Lest we forget, the last time oil ran up to 100+/bbl, it was the companies which had oil to sell who made the real killing. Everyone else was behind that curve, and some have suffered as a result.
DUC wells will likely increase again, with production/stimulation costs being a major factor in how many will be brought on line. While speculative infrastructure development may stall, that for existing production may continue.
Those companies who are relying less than ideal plays or are trying to build a production base by using their IPs for cash flow to keep drilling and completions going are going to be hurt the worst.
The strongest and healthiest companies will get ready for the next price runup, taking advantage of a buyer's market in services to reduce costs even further.

Prices are so incredibly low am wondering about reserves being snapped up stealthily by Chicoms.

[Smokin Joe]

Prices are so incredibly low am wondering about reserves being snapped up stealthily by Chicoms.

Some might sell to them, and on other continent some of that is likely (Africa, especially).

Is the SPR full? Because now would be the time for the Government to buy (rather than when prices are up), and in doing so it might provide some price support.

In the long run (24 months, after the election), prices will recover. Chicoms may buy into distressed companies (a couple come to mind), and could even pursue controlling interests, but I think the pickings will be easier elsewhere besides the US. After all, they came up with the virus that is causing the panic (yes, it is a panic, I was just in Walmart and there was almost no toilet paper--as if that is a cure), so US interests might not be eager to sell to them.

[thackney]

Some might sell to them, and on other continent some of that is likely (Africa, especially).

Is the SPR full? Because now would be the time for the Government to buy (rather than when prices are up), and in doing so it might provide some price support.

In the long run (24 months, after the election), prices will recover. Chicoms may buy into distressed companies (a couple come to mind), and could even pursue controlling interests, but I think the pickings will be easier elsewhere besides the US. After all, they came up with the virus that is causing the panic (yes, it is a panic, I was just in Walmart and there was almost no toilet paper--as if that is a cure), so US interests might not be eager to sell to them.

US suspends 12 million barrel SPR sale due to drop in oil prices
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/031020-us-suspends-12-million-barrel-spr-sale-due-to-drop-in-oil-prices
10 Mar 2020

The US Department of Energy has suspended a sale set for later Tuesday of up to 12 million barrels of government-owned crude, due to the recent crash in global oil prices, an agency spokeswoman said.

"In light of the recent fluctuations in global oil markets, the US Department of Energy is suspending the recently announced sale of crude oil from the Strategic Petroleum Reserve," Jess Szymanski, a DOE spokeswoman, said in a statement. "Given current oil markets, this is not the optimal time for the sale."...

- - - - - -

U.S. Ending Stocks of Crude Oil in SPR
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCSSTUS1&f=M

Down to 635 Million barrels from a peak of 727 in 2010-2011.

[libertybele]

The U.S. is energy independent now, our economy is solid and the market was booming before corona, tariffs were imposed on China, Russia is a strategic ally of Iran.  Even before corona, China was struggling economically; I had read reports that China was building large numerous 'ghost' apartment buildings and office buildings with no occupants.  That kept people building and working and helped to keep their economy going. 

Is it feasible to theorize that the Chinese and Russia have colluded to impact the production of shale oil?  Both countries would have their own reasons but also consider, that would mean though that the Chinese would be purposefully infecting their own people.  That would purposefully also hurt their economy for the short term -- those that have survived are younger and the production portion of their population. 

In 2013 they relaxed their only allowing one child rule and are now allowing two children because of the decline in a youthful, productive population.  Perhaps in the long run the goal is to kill off their aging population to make way for an eventual younger more productive population; boosting their economy in two ways. They no longer economically have to support an aging population and they would soon have a much younger productive workforce. (The virus brings a higher mortality rate for each decade over 50).

IMHO this could be have been bio engineered to affect the aging population of the world -- here in the U.S. those on Social Security, Medicare and Medicaid are a huge economic drain on the country.  Trump has proposed to rid payroll taxes which would boom our economy.  You can bet though, that after a certain age bracket, the programs that are now in place; Social Security, Medicare and Medicaid will no longer be available to them.  The programs will eventually be phased out and those currently on those programs will eventually die off.

[thackney]

The U.S. is energy independent now, our economy is solid and the market was booming before corona, tariffs were imposed on China, Russia is a strategic ally of Iran.  Even before corona, China was struggling economically; I had read reports that China was building large numerous 'ghost' apartment buildings and office buildings with no occupants.  That kept people building and working and helped to keep their economy going. 

Is it feasible to theorize that the Chinese and Russia have colluded to impact the production of shale oil?  Both countries would have their own reasons but also consider, that would mean though that the Chinese would be purposefully infecting their own people.  That would purposefully also hurt their economy for the short term -- those that have survived are younger and the production portion of their population. 

In 2013 they relaxed their only allowing one child rule and are now allowing two children because of the decline in a youthful, productive population.  Perhaps in the long run the goal is to kill off their aging population to make way for an eventual younger more productive population; boosting their economy in two ways. They no longer economically have to support an aging population and they would soon have a much younger productive workforce. (The virus brings a higher mortality rate for each decade over 50).

IMHO this could be have been bio engineered to affect the aging population of the world -- here in the U.S. those on Social Security, Medicare and Medicaid are a huge economic drain on the country.  Trump has proposed to rid payroll taxes which would boom our economy.  You can bet though, that after a certain age bracket, the programs that are now in place; Social Security, Medicare and Medicaid will no longer be available to them.  The programs will eventually be phased out and those currently on those programs will eventually die off.

China is the largest importer of oil in the world.  No way they want to throttle oil production and reduce the number of producers.

[catfish1957]

China is the largest importer of oil in the world.  No way they want to throttle oil production and reduce the number of producers.

Don't give them any ideas on U.S. buyouts. 

[IsailedawayfromFR]

Some might sell to them, and on other continent some of that is likely (Africa, especially).

Is the SPR full? Because now would be the time for the Government to buy (rather than when prices are up), and in doing so it might provide some price support.

In the long run (24 months, after the election), prices will recover. Chicoms may buy into distressed companies (a couple come to mind), and could even pursue controlling interests, but I think the pickings will be easier elsewhere besides the US. After all, they came up with the virus that is causing the panic (yes, it is a panic, I was just in Walmart and there was almost no toilet paper--as if that is a cure), so US interests might not be eager to sell to them.

The wife warned me about the toilet paper run 2 weeks ago so I stocked up on 200 rolls while at Sams.

So blame me @Smokin Joe

[Smokin Joe]

The U.S. is energy independent now, our economy is solid and the market was booming before corona, tariffs were imposed on China, Russia is a strategic ally of Iran.  Even before corona, China was struggling economically; I had read reports that China was building large numerous 'ghost' apartment buildings and office buildings with no occupants.  That kept people building and working and helped to keep their economy going. 

Is it feasible to theorize that the Chinese and Russia have colluded to impact the production of shale oil?  Both countries would have their own reasons but also consider, that would mean though that the Chinese would be purposefully infecting their own people.  That would purposefully also hurt their economy for the short term -- those that have survived are younger and the production portion of their population. 

In 2013 they relaxed their only allowing one child rule and are now allowing two children because of the decline in a youthful, productive population.  Perhaps in the long run the goal is to kill off their aging population to make way for an eventual younger more productive population; boosting their economy in two ways. They no longer economically have to support an aging population and they would soon have a much younger productive workforce. (The virus brings a higher mortality rate for each decade over 50).

IMHO this could be have been bio engineered to affect the aging population of the world -- here in the U.S. those on Social Security, Medicare and Medicaid are a huge economic drain on the country.  Trump has proposed to rid payroll taxes which would boom our economy.  You can bet though, that after a certain age bracket, the programs that are now in place; Social Security, Medicare and Medicaid will no longer be available to them.  The programs will eventually be phased out and those currently on those programs will eventually die off.

If you are 80 in China, you may well recall the times before Mao, the 'glorious revolution', the slaughter--why, you might (in an ancestor worship type culture) even pass the seeds of such counterrevolutionary ideas on to your grandkids or great grandchildren.

This is much the same problem totalitarians worldwide are having, with elderly people who remember relative freedom. Even here in the US, where the people who did the early development of the technologies which led to the gadgetry of today are assumed to not be capable of using it or learning to, when in fact, many see these technologies for the data gathering devices they are.

The disrespect and disregard for our society's elders, programmed in at the public schools, exists to undermine the ages old passing of culture between generations. In our culture, especially, that includes (among other things) a reverence for individual liberty and its companion, responsibility.
Just eliminating that segment of the population would simplify the indoctrination of the young tremendously, and I have little doubt there are those who would like to eliminate that demographic and philosophical stumbling block to their totalitarian aims.

[Smokin Joe]

The wife warned me about the toilet paper run 2 weeks ago so I stocked up on 200 rolls while at Sams.

So blame me @Smokin Joe

Nah. I saw it coming, too. Got the Mrs, to pick up a couple of extra mega packs before the rush hit.
As soon as the CDC said to "stock up", the rush was on. It was just squatting in the starting blocks and waiting for the starter's gun.

[Smokin Joe]

Don't give them any ideas on U.S. buyouts.

They've been buying up assets across the globe with US treasuries, for a couple of decades, now. Africa, especially, and not just oil, but minerals as well.

Some US companies have already sold some https://www.reuters.com/article/us-sinopec-deal-chesapeake/sinopec-to-buy-stake-in-chesapeake-assets-for-1-02-billion-idUSBRE91O0GM20130225