• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 6 hours Satellite Moons to Replace Streetlamps?!
  • 1 day US top CEO's are spending their own money on the midterm elections
  • 3 hours EU to Splash Billions on Battery Factories
  • 3 hours U.S. Shale Oil Debt: Deep the Denial
  • 11 hours The Balkans Are Coming Apart at the Seams Again
  • 1 day OPEC Is Struggling To Deliver On Increased Output Pledge
  • 3 hours Owning stocks long-term low risk?
  • 11 hours The Dirt on Clean Electric Cars
  • 23 hours Uber IPO Proposals Value Company at $120 Billion
  • 13 hours 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 1 day A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day 10 Incredible Facts about U.S. LNG
  • 1 day U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

What The Shale Guru Told Me About Oil Prices

In 2009, I went to Houston to see one of the great minds of the oil world.

The personality is Stephen Holditch. Widely acknowledged as the godfather of shale gas engineering.

Stephen did a lot of the early reserves engineering for the Barnett plays. He played a pivotal role in unlocking U.S. shales. As a professor today at Texas A&M he's still talked about in hallowed tones around Texas.

At the time, crude was creeping back from its $30, post-2008 low. So I offhandedly asked him the question many investors were wondering: where was the oil price going?

Without blinking, he said, "At least $75."

Such an exact figure was unexpected. But he explained that it was quite a simple calculation. Pointing to charts on his walls he noted, "That's the price OPEC needs to balance its budgets."

And indeed, WTI traded around that exact level for much of the next 18 months. Before finally heading higher in early 2011.

The guru's words came back to me this week. When the International Monetary Fund released a report showing that Middle East governments have been on a development-driven spending spree.

To the point where the IMF now estimates $90 crude is needed for most OPEC members to balance their budgets.

A potentially important point of note, some people would say.

Here's to those in the know,

By. Dave Forest


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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