Here's the latest appraisal of the battle in the oil and gas patch:
The U.S. shale cowboys are back on their horses and leading a strong recovery in the oil patch that is not expected to falter even as WTI prices dropped last week below $50 per barrel for the first time in more than two months.
With lessons learned from the oil price crash and budgets streamlined and focused on the most prolific shale plays, U.S. drillers are giving OPEC a hard time by raising output and hedging future production. Meanwhile, the cartel members are trying to cut supply and fix the price of oil at such a range that would allow them to reap higher oil revenues, but not allow the shale patch to recover too much too fast.
Two and a half months into the supply-cut deal, it looks like OPEC is losing the campaign to prop up oil prices. The drop in prices that began last week saw them retreating to almost exactly the same level as on November 30 – just below $52/barrel for Brent - when the OPEC deal was announced, the International Energy Agency said in its monthly report on Wednesday.
At the same time, reduced break-even prices in many shale plays and forward locking-in of production is allowing the companies currently drilling in the U.S. to turn in profits even at a price of oil at $40 a barrel.
You can read the rest @
http://oilprice.com/Energy/Energy-General/Has-OPEC-Underestimated-US-Shale-Once-Again.html
Even if we win this "battle", it will be a Pyrrhic victory at best. Every well casing which penetrates the water table will be there forever, and to think they will never leak is delusional. Some day we'll be VERY sorry we traded our potable water for oil company profits and the ability to drive big SUVs.
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