July 30, 2015

#Oilprices still struggling and will continue to do so

Yes, they took a brief swing up on Wednesday, after news that inventories had dropped, and more than expected. But, that's still small relief.

We're almost to August, moving past the peak of summer vacation season. That story above notes the world still has a large oversupply and the Chinese economy still looks mushy.

No wonder major oilfield service companies continue to lay off people. As is Chevron.

From that second link:

"We are not expecting a meaningful activity increase until sometime in 2016, depending on the pace of production declines and where commodity prices settle out in the coming quarters," Halliburton Chairman and CEO David Lesar said. "We are aggressively lowering our input costs, eliminating discretionary spending, managing our business within our cash flows and protecting our market position."
Basically, restarting work on most U.S. shale oil is predicated on a $65/bbl price. And, we're not going to get there until 2016.

If then. Lesar's Halliburton and others may get their overhead down to being able to work a certain number of wells at $60/bbl, but not lower than that.

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