• 4 minutes Why Trump will win the wall fight
  • 8 minutes Cuba Charges U.S. Moving Special Forces, Preparing Venezuelan Intervention
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 1 min is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 1 hour Solar and Wind Will Not "Save" the Climate
  • 4 hours Some Good News on Climate Change Maybe
  • 5 hours Ayn Rand Was Right
  • 13 hours students walk out of school in protest of climate change
  • 5 hours Expected Breakdown: Israel-Central Europe Summit Canceled After Polish Pullout
  • 1 hour Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 1 day Prospective Cause of Little Ice Age
  • 23 hours L.A. Mayor Ditches Gas Plant Plans
  • 1 day *Happy Dance* ... U.S. Shale Oil Slowdown
  • 4 hours IT IS FINISHED. OPEC Victorious
  • 1 day And for the final post in this series of 3: we’ll have a look at the Decline Rates in the Permian
Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

How To Play The Imminent Rebound In Oil Prices

Oil

In my last column, I pointed out the lockstep insanity being followed by US oil companies in increasing production, no matter whether or not the end product was profitable in today’s depressed oil market. Happily, I was also seeing an end to that destructive strategy, with several independent E+P’s guiding lower on production and cutting capex yet again.

I won’t replay last week’s column in its entirety. But now that oil is showing real signs of being ready to break out of its 2017 range, what oil companies do now will really matter for our investments. Will they turn open the spigot again at the first sign of recovering prices? Or have they been cowed enough (or just plain out of leveraging options) and will stop trying to forecast oil prices and just let the market dictate their plans?

There are signs that the oil companies will be more conservative if oil does reach $60 or even $70 later this year. This story outlines the plummeting use of sand, a major input cost for frackers. This is important particularly because ever more efficient drilling technologies, which maximize acreage and initial volumes of oil from fracked wells, all rely on ever larger volumes of sand.

The sudden drop in sand orders could mean that oil companies are taking a real break on breakneck drilling. Or, it could mean that they’re just fed up with rising sand costs. Or, it’s possible they are experimenting with other (cheaper?) compounds.

What…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



Oilprice - The No. 1 Source for Oil & Energy News