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The big Roll Over no one is talking about September 4, 2015

Posted by hslu in Oil.
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Last year, many enthusiastic U. S. media houses couldn’t hold back their excitement over the possibility that the United States would be the king of black gold in the world.

Back then. the headlines on every national TV company and print media, as well as many websites on the Internet, talked about how this new found wealth from shale oil formations would change the landscape of crude oil production and how the United States would soon be exporting oil to other nations.

Some even declared that the United States would soon be oil independent and this would change American’s Middle East policy. Politicians of all stripes and activists urged lifting the decades long oil export ban so that America could sell shale oil to Europe, exert political pressure on Russia and China and influence the oil market in the world .

Slide1

 

 

In essence, the U.S. media gave Saudi and Russia a collective middle finger and announced that a new king of the world oil market has been crowned.

Fast forward a year or so to the summer of 2015.

Price of WTI has tanked by about 60%. US rig count has dropped by about half. Layoffs in the oil patch numbered in the thousands and more pink slips are sure to come in the months ahead. Some shale oil companies has declared bankruptcy. M&A activities have picked up. CAPEX of every U.S. oil company has been slashed. Dividends of oil company stocks have been cut. Some companies have eliminated the dividends all together.

And what did the new king in the oil market do to protect its crown?

Well, American oil production promptly rolled over and the U.S. handed the crown back to Saudi on a sliver platter as we speak.

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But strangely enough, not very many new media companies pick up this event probably because they want to forget the articles they wrote a year ago.

Well, you might not believe the small drop in oil production this week amounts to a roll over because the level of reduction was very small.

That 200,000 bbls/day reduction qualifies as a rollover alright。

That 200,000 bbls/day reduction qualifies as a rollover alright。

Boom and bust.

Boom and bust.

Well, come back next month and you’ll see the decline accelerates. Don’t look for this news on CNN, WP, NYT or LAT. This event is not news worthy to them. They have better things to report, like Obama vacation, gay marriage, Planned Parenthood, cop killing, and Ferguson, these days.

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