The price of oil and natural gas have taken hits in the last few weeks.  Oil is down below $45/bbl and natural gas is hanging out around $3.00/MMBtu.  It’ll be interesting to see where things go as the summer progresses.

This article at Energyfuse.org suggests that shale drilling is hitting a ceiling as far as productivity per well is concerned.

Some drillers are ready to slow down activity if prices continue to decline.

Wind and solar electricity generation exceeded 10% of U.S. total for the first time in March, according to the EIA.  We expect that growth trend to continue for the next few years at least.  It seems that renewable power generation has reached a critical mass of sorts, and will continue to grow regardless of the price of fossil fuels.

Russia believes that oil markets will rebalance by the time the current OPEC/Russia production cut agreement is over.

OPEC says rebalancing is happening slower than expected.

Fracking technology has improved significantly over the last few years.  Companies are getting more product from each foot of lateral than they used to.  Now they are going back and using current techniques on older wells and getting increased production.  It’s called refracking, and it’s going to add significant supply at very little additional cost in the way of money, time, and environmental impact.

One reason oil prices are declining is that Libya and Nigeria have begun producing more oil.  They are excluded from the OPEC/Russia production cut agreement because their production has been tiny due to civil war.

West Virginia Senator Capito has introduced a bill that would expedite permitting for a gas storage hub, and Senators Capito and Manchin have introduced a bill that would make it possible for West Virginia to get a loan guarantee from the federal government for the project.

Whew!  Five days later than usual.  I’ll stick with the “business is booming” story for now.

Libya says it has exceeded 800,000 barrels of oil per day recently, with the possibility of hitting 1MM in the near future if they can get some contractual issues ironed out.

The EIA expects the U.S. to produce more gas this year than it previously thought.

A new study suggests that re-fracking can bring so much new production online from an old well that it’s just like drilling a new well.  It doesn’t mention whether re-fracking makes it possible to extract gas that otherwise would remain trapped in the formation, or just speeds up the extraction of gas that would come out anyways.

Sabine Pass continues to increase exports of LNGs.  The plant took in 2.3 Bcf per day in the second week of May, up from 2.1 Bcf per day in the first week.

A recent trade deal will make it possible for the U.S. to export LNGs to China.  Nice.

Some think that OPEC can’t just extend their production cuts, they need to double down on them.  There’s no other way to chew through the surplus.

Mexico has been increasing its reliance on natural gas.  Interestingly, it has a shockingly small number or drilling rigs running.  Good for the U.S., weirdly bad for Mexico.

This article discusses what OPEC is trying to accomplish by cutting production.  It’s pretty interesting, but even more interesting is the fact provided in the article that U.S. oil production is expected to hit 9.3 million barrels per day this year, and 10 million barrels per day next year.  That’s a lot of new production, and all thanks to OPEC and Russia cutting production.  They’re playing a dangerous game, and at some point they’ll probably have to start producing at full speed or they’ll just create a behemoth in the U.S.

This article goes into just how much money OPEC has “lost” since their announcement in November of 2014 that they would flood the market with cheap oil.  It also briefly mentions that Saudi Arabia has explored using fracking in its own oil fields, with little success.

There aren’t enough frack crews.  This was one of the factors that I thought might slow down the growth of the oil and gas industry when the price of oil and gas started to recover.

On top of that, somebody crunched the numbers and decided that the Marcellus/Utica region needs an additional 45 drilling rigs (and corresponding frack crews, of course) to fill the new pipelines that are going to be completed in this area.  There are only about 50 rigs running in this area right now.  There used to be a lot more than those two number combined, back in the boom before 2014, so if the crews could be found the rigs could be run and the gas produced.

Both oil and gas prices are down again.  Oil is down in spite of OPEC and Russia extending the production cuts for another nine months.  This article says the extension is going to have the desired effect and oil prices will go higher again.

Natural gas prices have gone down in part because some power producers are switching back to coal.  This leads me to think that we’ll probably be pushing the limits of natural gas storage at the end of injection season this year, just like last year, with the associated low price of natural gas.

Marcellus drillers aren’t drilling a lot of new wells compared to other oil or natural gas plays.  They’re completing DUCs.  There’s a lot of drilling that needs to be done in the near future, and they’ll have to bring on some new rigs soon.