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Old 06-22-2022, 05:35 PM   #221
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The oil price bubble is about to collapse. It has been driven up by speculators not supply/demand and market price fundamentals. We have Russia now selling their oil below $70 to the second and third largest consumers of oil (China and India). Iran which normally ships oil to China is being squeezed out by discounted Russian oil and is forced to discount their oil. You can't have a market where large producers are discounting oil by a wide margin and expect buyers not to be lured by the lower prices. That defies market economics. Eventually the speculative oil trade will unravel and oil will collapse down to the $60-70 range by the end of the year.
I wouldnt call $70 by year end a "collapse". That is still enough for every domestic driller to still make a profit and would be equvalent to a roughly $10/bbl crack
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Old 06-22-2022, 05:37 PM   #222
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I always am just amazed at the price difference across the country, on my May roadtrip, Georgia was way cheaper.

Here in NC I'm grateful we are well below the national average. Filled up over the weekend was $4.55 at Exxon (using Discover cards quarterly category w/ 5% cash back, saving another 22 cents).
Mostly taxes, although transportation/demand factor in as well.
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Old Today, 08:32 AM   #223
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I wouldnt call $70 by year end a "collapse". That is still enough for every domestic driller to still make a profit and would be equvalent to a roughly $10/bbl crack
Until this year, $70 a barrel would have been considered within the "boom" part of the boom-bust oil price cycle.
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Old Today, 08:57 AM   #224
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Until this year, $70 a barrel would have been considered within the "boom" part of the boom-bust oil price cycle.
I know little about O&G but I assume the per bbl price is just one factor in whether it is economic to go after oil. If you have an idle pump jack with relatively low production capability that has been shut down, $70/bbl is probably a good price to turn it back on. If you're thinking about drilling, $70 might not be enough to take the chance. Other big factors that I've heard of: Ability to transfer oil (pipeline or truck or rail.) Quality of oil (tar sands to light-sweet.)

IOW It's complicated.
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Old Today, 09:38 AM   #225
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Today I received an email reminding me to activate my Chase Freedom
flex card's third quarter 5% bonus. The big one in the third quarter is gasoline.

So, 5% bonus points April through June with the Discover card. The same 5% bonus July through September with the Freedom Flex card.

The best deal near me is still buying at Costco with the Costco 4% bonus. But, there are times I am not near a Costco, or I may not have time to wait in the lines. (Though they seem to be shortening quite a bit in the last two weeks.)
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Old Today, 09:59 AM   #226
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I know little about O&G but I assume the per bbl price is just one factor in whether it is economic to go after oil. If you have an idle pump jack with relatively low production capability that has been shut down, $70/bbl is probably a good price to turn it back on. If you're thinking about drilling, $70 might not be enough to take the chance. Other big factors that I've heard of: Ability to transfer oil (pipeline or truck or rail.) Quality of oil (tar sands to light-sweet.)

IOW It's complicated.

35+ years in oil & gas here. There are probably more idle pump jacks throughout the oil fields than running. When formations go dry, lots of wells sit unproductive. There are many reasons for letting existing well bores sit inactive, more so that I can discuss here. Don't be surprised if you see a not operating pump jack.
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Old Today, 10:12 AM   #227
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35+ years in oil & gas here. There are probably more idle pump jacks throughout the oil fields than running. When formations go dry, lots of wells sit unproductive. There are many reasons for letting existing well bores sit inactive, more so that I can discuss here. Don't be surprised if you see a not operating pump jack.
Yes, I understand that. That come up (idle pump jacks) in Oil Shock 1 & 2 - and I'm an old guy - old enough to know and still (just barely) young enough to recall.

But there are also pump jacks that could pump some more oil, but it could cost more than it's worth at lower bbl price. IF the pump can still pump some oil, there is SOME price that would likely make it worth turning it on. YMMV
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Old Today, 10:40 AM   #228
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Today I recieved an email reminding me to activate my Chase Freedom card's third quarter 5% bonus. The big one in the third quarter is gasoline.

So, 5% off April through June with the Discover card. The same 5% July through September with the Freedom card.

The best deal near me is still buying at Costco with the Costco 4% bonus. But, there are times I am not near a Costco, or I may not have time to wait in the lines. (Though they seem to be shortening quite a bit in the last two weeks.)
Also worth checking other credit cards to see if their Merchant Offers include any deals. I have some $10 off one time use deals from BP and Exxon that expire at the end of the month. (In addition to the rewards you can get for using their phone apps)
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Old Today, 10:48 AM   #229
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But there are also pump jacks that could pump some more oil, but it could cost more than it's worth at lower bbl price. IF the pump can still pump some oil, there is SOME price that would likely make it worth turning it on. YMMV

With a producing well, it really depends on the oil/water cut to see if it's worth it at the well head. There is a cost associated with disposing of produced water. Say the water/oil cut is really bad, like 2%. Then getting rid (paying to) of 98 barrels of produced water at a nearby licensed disposal facility and selling 2 barrels of oil may not be profitable.

Also, some old fields may produce low quality crude oil (heavy, high sulfur, may contain lots of solids, etc) and that production may be shut in until better times.

Another factor is plugging and abandonment costs. To properly close a drilled well (natural gas or oil), the rods and pump need to be pulled, the well bore has to plugged and the casing cemented to the top of the well, and that can cost $50 - 100 K, depending on well bore configuration. What some operators do is wait until the field has no further value and P & A all the wells at the same time, saving some costs. So you may see wells sitting idle in that case.
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Old Today, 11:03 AM   #230
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With a producing well, it really depends on the oil/water cut to see if it's worth it at the well head. There is a cost associated with disposing of produced water. Say the water/oil cut is really bad, like 2%. Then getting rid (paying to) of 98 barrels of produced water at a nearby licensed disposal facility and selling 2 barrels of oil may not be profitable.

Also, some old fields may produce low quality crude oil (heavy, high sulfur, may contain lots of solids, etc) and that production may be shut in until better times.

Another factor is plugging and abandonment costs. To properly close a drilled well (natural gas or oil), the rods and pump need to be pulled, the well bore has to plugged and the casing cemented to the top of the well, and that can cost $50 - 100 K, depending on well bore configuration. What some operators do is wait until the field has no further value and P & A all the wells at the same time, saving some costs. So you may see wells sitting idle in that case.
Thanks. I enjoy learning about the science, technology and business of oil. Oil is one of the most critical factors in our way of life.
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Old Today, 11:13 AM   #231
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Thanks. I enjoy learning about the science, technology and business of oil. Oil is one of the most critical factors in our way of life.
One thing I forgot to mention about old oil fields is that once they start losing their ability to keep well bores full enough to pump continuously, the well tender (guy who keeps things going on a daily basis) will put well pump jacks on timers so that the wells stay "off" until a sufficient amount of oil collects at the bottom of the well bores. Then the timer kicks in and the well gets pumped until all the oil is topside in the storage tanks.

He does this by trial and error process util he get the on/off/on timing down right. So when you drive by an old oil field you may see some units pumping while other sit idle and in most cases, this is why.
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Old Today, 11:50 AM   #232
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One thing I forgot to mention about old oil fields is that once they start losing their ability to keep well bores full enough to pump continuously, the well tender (guy who keeps things going on a daily basis) will put well pump jacks on timers so that the wells stay "off" until a sufficient amount of oil collects at the bottom of the well bores. Then the timer kicks in and the well gets pumped until all the oil is topside in the storage tanks.

He does this by trial and error process util he get the on/off/on timing down right. So when you drive by an old oil field you may see some units pumping while other sit idle and in most cases, this is why.
Well, doggonit aga8888! So we can't just flip a switch and get more oil out of an oil field. You are confusing us with facts. We can no longer pontificate - while living in blissful ignorance - on what should be done to produce more fossil fuel enerty. It sounds to me like you are a candidate for my list of Dangerous Radicals Who Infest This Site.
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Old Today, 11:56 AM   #233
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Well, doggonit aga8888! So we can't just flip a switch and get more oil out of an oil field. You are confusing us with facts. We can no longer pontificate - while living in blissful ignorance - on what should be done to produce more fossil fuel enerty. It sounds to me like you are a candidate for my list of Dangerous Radicals Who Infest This Site.
Haha, and I am a DRWITS ........and what makes things even more mysterious is that there are wells without pump jacks can produce oil and gas also! But that's another story for the few here that are interested.

And some pump jacks can pump without electricity!
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Old Today, 12:10 PM   #234
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Haha, and I am a DRWITS ........and what makes things even more mysterious is that there are wells without pump jacks can produce oil and gas also! But that's another story for the few here that are interested.

And some pump jacks can pump without electricity!

I dunno. I recall seeing some B&W movie clips, where crude oil came shooting out of the well that was being drilled, and coating the drill crew with black gunk. Maybe an exaggeration, but I thought it was based on some truth.

And now, they have to drill who knows how many miles to get it.
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Seeing we are talking about pump jacks.....
Old Today, 12:13 PM   #235
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Seeing we are talking about pump jacks.....

One of the oldest type of pump jacks can be found in California from the early days of drilling the Kern County field in Bakersfield, Ca (1920's or so). I actually found one of these still sitting on the well site (not producing) in the late 1980's. I did take a photo of it, but I can't find it now.

This pump jack was made out of wood, even the flywheel. And most likely driven by a once cylinder IC engine running on casing head gas.

On some wells, they hung a box of rocks in the counter-shaft as help to keep this pump jack running.Is he making any money on those?

kcmuseum_pumpjack-AOGHS.jpg
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Old Today, 12:14 PM   #236
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I dunno. I recall seeing some B&W movie clips, where crude oil came shooting out of the well that was being drilled, and coating the drill crew with black gunk. Maybe an exaggeration, but I thought it was based on some truth.

And now, they have to drill who knows how many miles to get it.
I'm sure aja8888 can explain it better, but I think drillers have learned how to prevent most of those blow outs (that waste a lot of oil and gas.) True you have to go deeper, but that doesn't mean the pressures aren't just as high as the old oil derricks you saw blowing out. YMMV
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Old Today, 12:22 PM   #237
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I'm sure aja8888 can explain it better, but I think drillers have learned how to prevent most of those blow outs (that waste a lot of oil and gas.) True you have to go deeper, but that doesn't mean the pressures aren't just as high as the old oil derricks you saw blowing out. YMMV
Blowouts are caused by gas under pressure in the formation. When drilling a well, the bore pressure in monitored and watched carefully. They can set a plug in the bore to hold back any gasses until they set a wellhead over the cemented casing and control, output through valves in the wellhead. Also, most gas wells under high pressure are choked down.

It's very uncommon to have a well blowout. I have been to one such well that was a gas well in Alvin, Texas about 10 years ago that blew out after completion and wellhead installation. A valve failed and gas, water and solids were blowing out at 2,000 PSI a couple of hundred feet in the air. It took two days to get this stopped, but no fire was initiated.
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