What's going to happen to crude oil

There's a limit on gathering here and look how well that has worked out! I take it the mounties take enforcement a bit more seriously and robustly than the pathetic excuse for constabulary we currently seem to enjoy on this side of the pond...?
To address the question of pipeline construction however, a new pipeline from Alberta to Vancouver is under construction now. I haven't heard of any major protest problems with it this year.

The main problem though is going to be the new pipeline to the US. Large parts of it have already been built, but US candidate for president Biden has said he will stop it if he is elected. With Trump's re-election looking shaky, Alberta could could be in trouble when it comes to export capacity to their biggest market.
 

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To address the question of pipeline construction however, a new pipeline from Alberta to Vancouver is under construction now. I haven't heard of any major protest problems with it this year.

The main problem though is going to be the new pipeline to the US. Large parts of it have already been built, but US candidate for president Biden has said he will stop it if he is elected. With Trump's re-election looking shaky, Alberta could could be in trouble when it comes to export capacity to their biggest market.
If construction is already underway then the contracts must be in place - with penalties for reneging on them...? Biden could find himself in the same boat as Cameron did when it came to cancelling the carriers - Brown had had the terms written in such a way that it was cheaper for us to finish the build and then scrap them.

I gather we're going to use them until the F-35 is ready and then flog them off, or something. That episode was so all over the shop of ridiculousness that I lost track. Anyone know what the current plan is...?
 
If construction is already underway then the contracts must be in place - with penalties for reneging on them...? Biden could find himself in the same boat as Cameron did when it came to cancelling the carriers - Brown had had the terms written in such a way that it was cheaper for us to finish the build and then scrap them. (...)
Who's going to make the Americans pay if they don't want to? They get trade rulings against them all the time and just ignore them.
 
Biden could find himself in the same boat as Cameron did when it came to cancelling the carriers - Brown had had the terms written in such a way that it was cheaper for us to finish the build and then scrap them.
It wasn't Brown who had the contract written that way, it was the Carrier Alliance who didn't trust Brown not to cancel them on a whim. The pain and grief Brown put industry through before he approved the project was eyewatering.
 
The second biggest natural gas fracking company in the US, Chesapeake Energy, have just declared bankruptcy.
U.S. natural gas giant Chesapeake Energy goes bankrupt

There's not a lot of news in that story, so it's probably not worth reading further.

However, Chesapeake Energy were one of the pioneers and main companies driving the fracking boom in the US, at one point being the largest. They grew rapidly on a mountain of debt to become one of the biggest gas producers in the US.

They were in very shaky condition before the pandemic due to falling gas prices in the US. With the market cratering in the wake of the pandemic, their falling over was probably inevitable.
Chesapeake Energy have not declared bankruptcy, they have entered Chapter 11 Bankruptcy Protection. There is an important distinction between this and bankruptcy, which would be under Chapter 7, and they have certainly not yet fallen over.

By filing for Chapter 11, they have given themselves some breathing space from their creditors in order to refinance and restructure their debt burden. This is not an unusual procedure when companies are under financial pressure, and can be an effective measure for stiffing creditors before going back to business as usual. Indeed, the company that I work for did just this a few years ago following the 2014 price crash.

It is important to note that Chesapeake are continuing their operations.

Although it is not always successful, and may lead to Ch7 and liquidation, there is a fairly good chance that they will refinance and emerge with new shareholders.
 
Chesapeake Energy have not declared bankruptcy, they have entered Chapter 11 Bankruptcy Protection. There is an important distinction between this and bankruptcy, which would be under Chapter 7, and they have certainly not yet fallen over.

By filing for Chapter 11, they have given themselves some breathing space from their creditors in order to refinance and restructure their debt burden. This is not an unusual procedure when companies are under financial pressure, and can be an effective measure for stiffing creditors before going back to business as usual. Indeed, the company that I work for did just this a few years ago following the 2014 price crash.

It is important to note that Chesapeake are continuing their operations.

Although it is not always successful, and may lead to Ch7 and liquidation, there is a fairly good chance that they will refinance and emerge with new shareholders.
I expect that a lot of their assets will be sold off, and if they survive it will be as a much smaller company.
 
The Saudi attempt back in 2014 to bankrupt North America Shale just made it stronger.
That may have been good preparation for this oncoming storm
 
Oil analysts are saying that oil demand did not fall as much as expected, and the demand has started to rebound. Different oil analysts have made different projections, but as an example one expects prices of Brent crude to recover to $43 per barrel this year, $66 next year, and $83 in 2023.
Global oil demand rebound from pandemic's lows prompts price spike forecasts
Oil analysts say a rebound in the world's hunger for oil has already started after demand destruction caused by the COVID-19 pandemic fell far short of what many experts had expected.

Amrita Sen, co-founder and director of research for international consultancy Energy Aspects, says the bounce in demand will outstrip the ability of producers to restore supply, resulting in average Brent oil prices rising from about $43 US per barrel this year to $66 next year and $83 in 2023.
 
How can “the bounce in demand will outstrip the ability of producers to restore supply,” if we predict the problem now (July 2020)?
I’m not trying to be difficult but... demand didn’t fall as much as predicted, just about all options for long term storage were exhausted, (ie there was (is) no more storage capacity) and the producers didn’t all die of starvation and stop production as predicted. The capacity is there. Is this not just another way for OPEC (&the others) to keep screwing money out of the system?

I think this is a rhetorical question, but if you have a reason...
 
How can “the bounce in demand will outstrip the ability of producers to restore supply,” if we predict the problem now (July 2020)?
I’m not trying to be difficult but... demand didn’t fall as much as predicted, just about all options for long term storage were exhausted, (ie there was (is) no more storage capacity) and the producers didn’t all die of starvation and stop production as predicted. The capacity is there. Is this not just another way for OPEC (&the others) to keep screwing money out of the system?

I think this is a rhetorical question, but if you have a reason...
A number of oil producers have gone tits up and most of the remainder have taken a chainsaw to their investment plans. The same is true of the companies that are subcontracted to drill and service the oil wells.

It takes continuos investment just to keep production at current levels, let alone expand it. An oil well goes through a lifecycle after which it is no longer economical to operate. As a result there are older wells which are continually being retired which must be replaced with new ones in order to keep production the same. This is especially true for fracking, as most of the production comes right after fracking, after which production trails off rapidly.

This sort of price swing is normal in the oil industry, and also in mining as well. Generally speaking, the further "upstream" you area away from the consumer, and the closer to digging or pumping the resource out of the ground, the more exposed you are to boom and bust cycles with high and low prices.
 
Gas here is still under $2 a gallon, So hey WGAF? :-D Anything else is way above my pay grade
 
A number of oil producers have gone tits up and most of the remainder have taken a chainsaw to their investment plans. The same is true of the companies that are subcontracted to drill and service the oil wells.

It takes continuos investment just to keep production at current levels, let alone expand it. An oil well goes through a lifecycle after which it is no longer economical to operate. As a result there are older wells which are continually being retired which must be replaced with new ones in order to keep production the same. This is especially true for fracking, as most of the production comes right after fracking, after which production trails off rapidly.

This sort of price swing is normal in the oil industry, and also in mining as well. Generally speaking, the further "upstream" you area away from the consumer, and the closer to digging or pumping the resource out of the ground, the more exposed you are to boom and bust cycles with high and low prices.
Don't forget the bit before "pumping the resource out of the ground". Oil company exploration budgets have been bumping along the bottom of the graph since 2014. This is building potential for a supply shock eventually.
 
Don't forget the bit before "pumping the resource out of the ground". Oil company exploration budgets have been bumping along the bottom of the graph since 2014. This is building potential for a supply shock eventually.
Not just upstream, downstream is due a shocker too

Said before, when September ends/first chilly night, lots of oil industry problems are going to become national scale crises
 

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