• 4 minutes End of Sanction Waivers
  • 8 minutes California Politicians Hiked Gas Tax, Now Demand Investigation Into State's $4 Per Gallon Gas Prices
  • 11 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 15 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 2 hours Permafrost Melting Will Cost Us $70 Trillion
  • 5 mins California is the second biggest consumer of oil in the U.S. after Texas.
  • 4 hours Let's just get rid of the Jones Act once and for all
  • 22 mins Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 2 hours Saudi, UAE Overstate Their Oil Capacities?
  • 23 hours At Kim-Putin Summit: Theater For Two
  • 2 hours Robots And Emotions: Simulated Love Is Never Love
  • 23 hours NAFTA, a view from Mexico: 'Don't Shoot Yourself In The Foot'
  • 20 hours "Undeniable" Shale Slowdown?
  • 1 day UNCONFIRMED : US airstrikes target 32 oil tankers near Syria’s Deir al-Zor
  • 1 day Nothing Better than Li-Ion on the Horizon
  • 1 day New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 1 day Russia To Start Deliveries Of S-400 To Turkey In July
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…




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