http://oilprice.com/Energy/Crude-Oil/27-Billion-Barrels-Worth-Of-Oil-Projects-Now-Cancelled.html

The downturn in oil prices have hit projects all around the world, and Wood Mackenzie says that 68 major projects were scrapped in 2015, which account for around 27 billion barrels of oil and natural gas.

Its going to be interesting to see how quickly the oil price recovers when this one turns around. I've been through a few of these downturns, this one is differant. The amount of future supply being taken off the market is huge. When the current glut is cleared I suspect the price rise will be quick and large. There is a ton of money to be made if your timing is right.

Edited January 18, 201610 yr by canman

Its going to be interesting to see how quickly the oil price recovers when this one turns around. I've been through a few of these downturns, this one is differant. The amount of future supply being taken off the market is huge. When the current glut is cleared I suspect the price rise will be quick and large. There is a ton of money to be made if your timing is right.

Maybe.. it just shows that there is a lot in reserve to have it drop this low. Good for us consumers, i do feel for some friends that I have in the oil industry.

It does keep the oil boys on the forum down from looking down on others like digital nomads, teachers and others not making oil $ They are a lot less vocal right now. But its sad for the good ones who suffer too, don't wish anyone misfortune in their jobs.. that is real stressful especially when they can't influence the circumstances (like the oil prices going down)

...

And not long ago, they were telling us that the world was in danger of running out of oil.

Pundits…don't we just love them?

Its going to be interesting to see how quickly the oil price recovers when this one turns around. I've been through a few of these downturns, this one is differant. The amount of future supply being taken off the market is huge. When the current glut is cleared I suspect the price rise will be quick and large. There is a ton of money to be made if your timing is right.

Shale gas production and reserve numbers tell a different story. I think this is going to be a long drawn out slump in oil price, just like the 1981 crash. There is a lot of oil on the market, but of course eventually consumption will catch up with production.

Proved oil reserves are still increasing:

1994 = 1118.0 Billion bbls

2004 = 1366.2 Billion bbls

2014 = 1700.1 Billion bbls

Its going to be interesting to see how quickly the oil price recovers when this one turns around. I've been through a few of these downturns, this one is differant. The amount of future supply being taken off the market is huge. When the current glut is cleared I suspect the price rise will be quick and large. There is a ton of money to be made if your timing is right.

Shale gas production and reserve numbers tell a different story. I think this is going to be a long drawn out slump in oil price, just like the 1981 crash. There is a lot of oil on the market, but of course eventually consumption will catch up with production.

Proved oil reserves are still increasing:

1994 = 1118.0 Billion bbls

2004 = 1366.2 Billion bbls

2014 = 1700.1 Billion bbls

Shale oil reserves have been grossely over estimated, that little chicken is just starting to come home to roost. Just watch how many of these tight oil prodicers go to the wall this year. Once the banks realise how they have been taken they will not be lining up to re-finance or restructure debt.

Here's an example from 2014: http://www.theguardian.com/environment/earth-insight/2014/may/22/two-thirds-write-down-us-shale-oil-gas-explodes-fracking-myth

Also there is a big differance between proven reserves and technically/economicaly recoverable reserves.

Reserves also have to be compared to consumption. World wide crude consumption in 94 was 69 mill bpd; in 2014 it was 91mill bpd.

All that being said I fear you are correct in that this is going to be a long drawn out slump which usually means a world wide recession. 'Oil gluts' have historicly been a leading indicator of economic recessions.

Edited January 19, 201610 yr by canman

Its going to be interesting to see how quickly the oil price recovers when this one turns around. I've been through a few of these downturns, this one is differant. The amount of future supply being taken off the market is huge. When the current glut is cleared I suspect the price rise will be quick and large. There is a ton of money to be made if your timing is right.

Shale gas production and reserve numbers tell a different story. I think this is going to be a long drawn out slump in oil price, just like the 1981 crash. There is a lot of oil on the market, but of course eventually consumption will catch up with production.

Proved oil reserves are still increasing:

1994 = 1118.0 Billion bbls

2004 = 1366.2 Billion bbls

2014 = 1700.1 Billion bbls

Shale oil reserves have been grossely over estimated, that little chicken is just starting to come home to roost. Just watch how many of these tight oil prodicers go to the wall this year. Once the banks realise how they have been taken they will not be lining up to re-finance or restructure debt.

Here's an example from 2014: http://www.theguardian.com/environment/earth-insight/2014/may/22/two-thirds-write-down-us-shale-oil-gas-explodes-fracking-myth

Also there is a big differance between proven reserves and technically/economicaly recoverable reserves.

Reserves also have to be compared to consumption. World wide crude consumption in 94 was 69 mill bpd; in 2014 it was 91mill bpd.

All that being said I fear you are correct in that this is going to be a long drawn out slump which usually means a world wide recession. 'Oil gluts' have historicly been a leading indicator of economic recessions.

The billions of bbls of oil mentioned in The Guardian article are estimates and believed to be, so far only a couple of billion of bbls of proven oil reserved have been written off, which is a drop in the oil glut.

A large chunk of the new reserves are from the heavy tar sand which takes a long time to produce.

Even as we are burning our way through more than 1,000 bbls/second, there is now oil for more years than ever.

1994 = 1118.0 Billion bbls = 44 years

2004 = 1366.2 Billion bbls = 47 years

2014 = 1700.1 Billion bbls = 51 years

http://www.offshoreenergytoday.com/fitch-oil-at-30-per-barrel-not-sustainable/?utm_source=emark&utm_medium=email&utm_campaign=daily-update-offshore-energy-today-2016-01-22&uid=217924

Fitch Ratings has lowered its corporate forecast assumptions for oil and gas as follows due to recent weakening in supply and demand fundamentals:

2016 oil price base case: $45/bbl;

Long-term base case oil price: $65/bbl;

2016 oil price stress case: $35/bbl;

2016 natural gas base case: $2.50/mcf;

Long-term base case natural gas price: $3.25/mcf.