How high will Brent crude go?

[Value Buy]

Gartman: Brent Versus WTI Spread to Increase

[tyfighter3]

VB, your looking at Libya at 50% right now at -1.2 million a day off the market. Iran is starting to blow up which the Saudis wouldn't be able to make up much of their shortfalls. This is going to last for months. You might want to pick up some USO and start picking up USA Oil Stocks. Oil will go higher, how much is anybodies guess. National Security tells us we should be getting off ME oil as soon as we can. That's still years away too but we could cut it down a lot in just a few years. Their is starting to be a bottle neck at Cushing Ok. Need another pipeline built to the Gulf.

[livinincali]

There's currently protested planned in Saudi on 3/11 and 3/18. I don't know if/how they'll play out, but if the contagion spreads there it could get ugly for oil really quickly. I think you may see an iron fist response from the government in Saudi though and I'm guessing based on oil the west will probably stay quite.

[Value Buy]

Well, Brent did not climb as much as our oil did today.
Surprisingly, it was reported that Libyan planes were attacking an important port city that is tied to the oil distribution to Europe, and Brent did not climb p bigtime on the news.....
Our crude closed at $102.23 today
I think oil futures might hit $125 by the end of the month, with the momentum staying strong .
Brent should push toward $135 to $140. Surprisingly, Exxon and Chevron stock prices seem to have plateaued, with oil still climbing.
If it happens, look for our economy to get pretty shaky this summer.
It will not be pretty, as the difference between the 2008 oil price spike, and now, is we did not have high unemployment and inflation hitting us.

[Value Buy]

Today's market in oil, is why I cannot play the commodities. I just cannot get it correct. Brent and American oil futures both down, the Euro way up.
I know it might swing the other way within an hour, but I would get crushed, playing them......

[tyfighter3]

Here is some good reading.
www.feedthebull.com/article/bakken-or-bunk?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+feedthebull+%28FeedTheBull.com+-+Stock+Market+News+with+a+Voice%21%29

[Deleted]

just paid $3.75 per gal. for diesel today.
i sure don't like paying the new higher prices....
however, if country would only listen to T Boone Pickens we could immediately reduce our need for imported oil....
many if not all homes here in the midwest have natural gas plumbed to them, all cars can be converted, homes will need their own CNG compressor and problem solved.... this may only be a temporary problem solver but still we have at least a 100 year supply of natural gas available....
in this part of the county all UPS local delivery trucks use CNG...

[lovetobike]

I don't mean to deter from the focus of this board but I have to comment on MajEasy's comment about CNG. It is touted as the "clean energy" but it is also at the expense of our water supply. I live in PA, in the heart of NG well exploration and it is amazing the amount of water they use for hydrofracking. I know some small towns and even Universities are getting paid to give them part of their water supply. Other sources of water are coming from the Susquehanna (sp?) river. The problem with this is they use diesel trucks that have to make several trips a day to get the millions of gallons of water to frack a well pad. My DH did a rough calculation and he estimated we are basically using 40% of the energy we will get from the NG in oil to run the trucks that haul the water back and forth. In addition to ruining the water supply, it is also ruining the roads. The trucks are over the weight bearing limit for the highways the NG companies are using and the roads are a mess. Unfortunately our current Govenor is trying to get a law passed that will allow the NG companies to drill the state forest and game lands. All of this for a short-term supply of energy, and the way we are getting that energy is using a ton of oil to run the diesel trucks just to get the wells set up. This process has made a lot of poor people very rich overnight. It is causing small, poor communities to become boom towns. Once the wells are set up, the "boom" towns will go back to what they once were. It really makes me sad to see what is happening to the land here. All because no one wants to make the serious changes that need to occur in order to reduce their energy consumption.

[spartan7886]

Lovetobike, are you sure they are using diesel trucks to get that water? That would be horribly stupid on their part unless they either have to transport the water over 15 miles or are worried about unhappy locals sabotaging the lines. I don't work that field, so I don't know what they do up there, but in my field, we run water lines from ponds to the sites that can transport up to 40 bbl/min (1680 gal/min) with just small pumps every half mile or so. Trucking water in is extremely expensive. Most of the trucks you see traveling to location are either carrying brine for other operations (to prevent clay swelling and generate a higher hydrostatic pressure to control the well easier) or frac sand.

[Deleted]

Love to bike,
CNG for cars will never happen because it simply makes too much sense.... sorry about the drillers in PA, they seem to be very stupid... within 5 miles of my house there are at least a dozen wells.... one well is in front of our state capital.... one well near by is in the median of an interstate highway..... here in oklahoma horizontal drilling is a big deal... wells around 12000 ft pose no problems to the ground water... royalties paid to our land owners and mineral owners help our state, they don't hurt us in anyway....
excerpt:
(great read and educational, link at the bottom)
NATURAL GAS IS THE BEST SUBSTITUTE FOR FOREIGN OIL
The U.S. imports approximately 60% of the oil that we consume — a dangerous addiction that costs our country $1 billion per day. This percentage will likely rise in the years ahead as oil prices inevitably increase to choke off demand in the industrialized countries to make room for burgeoning oil demand from rapidly developing countries in Asia, the Middle East and in South America. This is an addiction America cannot afford in good economic times and certainly not in the tough economic times the nation is facing today.

Once truck fleets have been converted to natural gas (in the form of liquefied natural gas, or “LNG”) and natural gas refueling pumps have been added to many of our nation’s truck stops, we can then begin converting passenger cars to natural gas (in the form of compressed natural gas, or “CNG”). This conversion process would save American consumers billions of dollars because natural gas is 70% cheaper than oil. Americans also would enjoy the added benefits of cleaner air and water and greater national security.
www.chk.com/NaturalGas/Pages/default.aspx

Attachments:

[lovetobike]

Yes, they are definitely driving diesel trucks. I drive a TDI, I grew up driving tractors, I know what a diesel engine sounds like. I agree that it doesn't make any sense to haul that much water but it is being done.

According to the Susquehana River Basin Commission, "an average of 84% of the water used to frack a well is brought onsite. An average of 10% comes from injected water that has been recovered. It takes ~4-8 million gallons of water to frack a horizontally drilled well. 29% comes from the public water supply, the rest is from surface ground water supplies. These values are from data reported from June 1, 2008 thru May 21, 2010. Based on the experience in other major US shale fields, some Marcellus shale wells may need to be hydrofractured several times over their productive life (typically 5-20 years or more)." here is the link to the entire article. It was published by the Penn State Cooperative Extension. pubs.cas.psu.edu/FreePubs/pdfs/ua460.pdf. Even if some of the water is piped in (I've never seen it around here), diesel trucks are the only way they are hauling the used water out of the well site.

It'll be interesting to see if, over the long term, this creates a conflict of interest for the use of our water. I'm thinking that investing in "water" may be a way to make some serious money in the future.

Somewhere there is a picture that someone took of the trucks they use to haul the water and the damage being done to the roads here. When I find the blog I'll post the link.

[tyfighter3]

Lovetobike, The water they use still goes back into the ground in some form or another.

[lovetobike]

True, it does go back into the ground but first they haul it out in 18 wheeler sized tanks to a site where it sits until it can undergo treatment at a water treatment facility.

Evidence they use diesel trucks to haul fresh water in northern PA at least.
www.tiogapublishing.com/articles/2010/03/31/news/doc4bb3928b56b58296910288.txt

Here is a nice pic of the water tanks:
www.pbase.com/cwphoto/image/114868143

Road closed due to heavy truck traffic
www.pbase.com/cwphoto/image/120905063

Hit the back button and you can see a lot more photos of what is going on in this region.

[tyfighter3]

What is your point, it's under construction. Show me some pictures 6 months after they get done, then we can talk.

[lovetobike]

relax Ty...people were questioning me about the use of diesel trucks to haul water to and from the well sites for fracking. I'm providing the pictures that show that in PA at least, they are using diesel trucks to haul the water to and from the well sites. Is it a big deal? No one really knows. What I do know there are currently 1800 wells drilled, if the trend continues it would go up to 60K wells. But hey, what most people care about is "out of site out of mind. If I don't see it, it doesn't affect me." I will close my end of this conversation now.

[spartan7886]

Sorry if you misunderstood me, lovetobike. I wasn't questioning your ability to identify a diesel truck, just your ability to identify the contents. I reread my comment, and I wasn't as clear as I could have been. I stand corrected. It's just surprising to me, because it is as stupid from an economics standpoint as from it is from an energy conservation standpoint, and most shale gas wells are operating on very slim economics. Maybe pumping is just not feasible with your terrain.

Unfortunately, ty, while the water goes back in the ground, it will never return to the water table and to the water cycle (at least not on a human timescale, maybe on a geologic one). When we use that water to frac a shale gas well, it is gone for good. If there was a way for the water to escape, the gas would have escaped and we wouldn't be drilling there.

[bimetalaupt]

Mar 4, 2011 19:53:59 GMT -5 lovetobike said:

relax Ty...people were questioning me about the use of diesel trucks to haul water to and from the well sites for fracking. I'm providing the pictures that show that in PA at least, they are using diesel trucks to haul the water to and from the well sites. Is it a big deal? No one really knows. What I do know there are currently 1800 wells drilled, if the trend continues it would go up to 60K wells. But hey, what most people care about is "out of site out of mind. If I don't see it, it doesn't affect me." I will close my end of this conversation now.

NO!!! it is 98% sand and then Water...(WT/Vol)...

WHEELING - Most natural gas companies note that between 98 and 99 percent of the 5 million gallons of fluid used to hydraulically fracture a Marcellus Shale natural gas well consists of water and sand.

However, what concerns some residents - and even state agencies - when it comes to the fracking process are the chemicals that make up that remaining 1 to 2 percent of the mixture.

Think of it this way: if 1.5 percent of a fracking mixture is something other than water and sand, then 75,000 gallons of chemicals found in products such as antifreeze, laundry detergent and deodorant are being pumped deep into the ground. Some are concerned that these chemicals will contaminate the water supply, while the natural gas companies say each of the chemicals has a role in ensuring the fracking process goes as planned.

According to the Marcellus Shale Coalition, "hydraulic fracturing has been effectively used to safely stimulate job-creating domestic energy resources over 1.1 million times."

A typical Marcellus Shale well can be fracked numerous times during its production life. The wells travel thousands of feet into the earth before turning horizontally to reach gas pockets. After the wells are drilled and the protective casing put in place, the fracking process begins.

Petroleum services titan the Halliburton Co. pioneered the fracking process in 1947, and company officials note the firm has performed work in both West Virginia and Pennsylvania.

In fact, fracking has been a common occurrence in Wetzel and Tyler counties for years - with no reported incidents of groundwater contamination.

According to Halliburton, 98.47 percent of the material its workers use for fracking consists of water and sand, leaving just 1.53 percent for other materials. Some of the chemicals found in Halliburton's fluid mixture include formaldehyde, ammonium chloride, acetic anhydride, methanol, hydrochloric acid, and propargyl alcohol.

Halliburton officials note that almost 90 percent of onshore gas wells require fracking. The company notes the fracking technique "starts with a good bit of water and a lot of sand. Mix those two together, apply a couple thousand pounds of pressure, and introduce them to a reservoir several thousand feet below (ground), often with the help of a small percentage of additives that aid in delivering that solution down the hatch."

Halliburton notes that the force of the water being pumped into the earth - which can be as high as 10,000 pounds per square inch - creates tiny fissures in the Marcellus Shale formation. The sand portion of the mixture then flows into these fissures and keeps them open. This creates pathways for the previously trapped natural gas to escape. The entire fracking process takes, on average, three to 10 days to complete.

The role of chemicals in the fracking process varies. According to Chesapeake Energy, which says its most common fracking solution contains 0.5 percent worth of chemicals, the chemicals and their roles in the process include:

* hydrochloric acid - found in swimming pool cleaner, and used to help dissolve minerals and crack the rock;

* ethylene glycol - found in antifreeze, and used to prevent scale deposits in the pipe that lines the well;

* isopropanol - found in deodorant, and used to increase the viscosity of the fracture fluid;

* glutaraldehyde - found in disinfectant, and used to eliminate bacteria that can create corrosive by-products;

* petroleum distillate - found in cosmetics, and used to minimize friction;

* guar gum - found in common household products, and used as a gel to thicken the water and suspend the sand;

* ammonium persulfate - found in hair coloring, and used to delay the breakdown of guar gum;

* formamide - found in pharmaceuticals, and used to prevent corrosion of the well casing;

* borate salts - found in laundry detergent, and used to maintain fluid viscosity under high temperatures;

* citric acid - found in soda pop, and used to prevent precipitation of metal;

* potassium chloride - found in medicine and salt substitutes, and used to prevent fluid from interacting with soil;

* sodium or potassium carbonate - found in laundry detergent, and used to balance acidic substances.

However, not every company uses the same fracking formula, emphasized Pennsylvania Department of Environmental Protection spokeswoman Jamie Legenos. She said her agency maintains a list of every chemical ever used by a company that has performed fracking in the Keystone State.

In addition to the materials used by Chesapeake, some of the 85 fracking chemicals listed by the Pennsylvania DEP are xylene, toluene and tetramethylammonium chloride - chemicals that can lead, with prolonged exposure, to liver damage in humans and can even be fatal.

None of these chemicals appear to be used in fracking in West Virginia.

Marcellus Shale Coalition spokesman Travis Windle said of the fracking formulations, "The small amount of other additives, used to kill bacteria and reduce friction, are all listed on the (Pennsylvania Department of Environmental Protection's) website. This long and clear record of environmental safety is testament to the common-sense regulations in place coupled with the industry's unwavering commitment to protect the environment."

Much of the concern with fracking is that the chemicals are being pumped underground, and that they could contaminate the water supply. Drilling companies contend that they take adequate safety precautions to ensure that doesn't happen, and note that the aquifer is at about 1,200 feet below the Earth's surface while fracking takes place a minimum of 5,000 feet below that 1,200-foot depth.

Chesapeake, for example, notes workers install the following layers of protection in each well to prevent chemical leaks:

* surface casing

* cement to seal this casing in place

* production casing

* cement to seal this casing in place

* production tubing

* an additional string of casing and cement for some wells.

To date, it appears that most problems encountered with drilling seem to come from inadequate casing during the initial phases of the operation.

Ken Weir, spokesman for the Pittsburgh-based group marcellusprotest.org, advised residents to look at the full picture when considering any drilling proposal.

"If they tell me, 'If we don't drill this hole here, you won't have any heat in your house next year,' that is ridiculous," he said.

"With all the problems (coal) mining has caused in this area, are we willing to repeat that for a dollar bill?" Weir added.

[lovetobike]

BiMetal - I'm a little confused. You posted:

"NO!!! it is 98% sand and then Water...(WT/Vol)..."

"Most natural gas companies note that between 98 and 99 percent of the 5 million gallons of fluid used to hydraulically fracture a Marcellus Shale natural gas well consists of water and sand." This statement doesn't say that 98% of the water/sand mixture is sand, it just says that out of the entire fluid pumped into the ground, 98% is sand AND water

It doesn't seem like a company could pump a fluid that was 98% sand, it wouldn't be a fluid - it would be sand cake. Can you verify your initial statement?

I know I said I'd shut up but I can't. I know that there haven't been problems so far, but the drilling has been minimal to this point.

In '07, there were only 27 wells drilled, and the number off wells drilled per year has increased to the latest numbers of 1445 wells drilled in 2010.
My source is the Penn State Marcellus Shale Outreach and Research Center. If anyone wants the link, send me a PM, I'll send it to you.

I guess we'll wait and see what the future impact will be. I hope for the citizen's sake, the gas companies are correct; that there is no impact on the water supply from the fracking fluid.

I seriously think that water will be the next "oil" investment in the future.

[lovetobike]

I've been talking with DH about this and decided that perhaps this discussion, my points of what I'm seeing for the Natural Gas Play in PA could turn into considerations for future investments in relation to the Natural Gas play.

1. Water (purification; suppliers etc) - I've already talked about this.
2. Use of diesel trucks to haul the water (either to or from the site) - with the rise in fuel, the companies need to figure out a way to convert those engines to NG; are their companies that are doing that now? Keep in mind there are 4-8 wells per "pad", it take 4-8 million gallons of water to frack each well. It is estimated that it takes about 12000 truck trips to frack a "pad". If diesel continues to rise as it has in the past, the NG companies can't sustain this mode of transportation using diesel trucks.
3. Companies that make the equipment for the drills.
4. Pipeline companies - once this gas is ready to be used or demand catches up with or exceeds supply (right now we have an oversupply); the need to expand the pipelines to transport the gas will be great.

Any other thoughts?

[tyfighter3]

Go to post #4. Very funny and how so true.
notmsnmoney.proboards.com/index.cgi?board=stocknovavax&action=display&thread=692

[tyfighter3]

Lovetobike, all of our trucking should be on NG. Maybe we all should ask our Energy Department why it isn't so. You could also look at HP. It does make Flex Rigs, one of the first Company's that did.

[Value Buy]

Natural gas is cheap now.
Four or five years ago, it was expensive.
If we convert 50% of our car and truck fleet to natural gas, you can be assured the cost will be very comparable to gasoline.
The Feds will probably even put in a hefty road tax schedule on it.
Simple law of econoics, if the people need it, we scalp them.

[tyfighter3]

Here is a good read on NA oil Reserves.
seekingalpha.com/article/256403-how-much-oil-does-the-u-s-have-in-the-ground-what-does-it-mean-for-investors?source=aal_1_sc51

[tyfighter3]

Lovetobike, Here is some more information on HP.
www.thestreet.com/story/11062107/1/helmerich-payne-stock-hits-new-52-week-high-hp.html?puc=msn&cm_ven=msn

[Value Buy]

Brent crude traded at $119.10 a barrel today.
Our crude was $107.94 a barrel today.

Tonight, the evening news in Chicago reported retail gasoline will be at $5 a gallon by Memorial Day.

[yclept]

Lordy, lordy, if oil gets much more expensive, it'll be right up there with bottled water. But the market for oil is broader. A lot of folks have to buy fuel; only stupid folks buy bottled water.

[Aman A.K.A. Ahamburger]

Need another pipeline built to the Gulf.

The keystone XL is looking better all the time, eh Ty?

Also nice article on the Bakken. C0₂ injection is key.

Brent is looking to go higher, Libya is a mess right now.

[TD2K]

The Feds will probably even put in a hefty road tax schedule on it.


Definitely. WA and OR are both talking about additional taxes on electric cars to make up the loss of gasoline taxes from them. I can't disagree, why should those vehicles essentially get a free ride.

CNG makes a lot of sense to me since the infrastructure is already in place. However, whether the excess capacity is there is one question I have. Also, the long term cost of home compressors is another thing that would worry me. Home 220V charging stations are not inexpensive to put it and a home compressor would be even more I'm thinking.

[tyfighter3]

It would just depend on if you could get your cost back over a 5 year period in putting your own pump in and it the price would be cheaper through your gas company or not.

[Value Buy]

Brent trading at $123.23
Texas crude $108.90

Chevron pushing $109 a share. At least I have that one in the win column.......
Local retail gasoline pricing now around $3.95 a gallon........will have to see if the retail gasoline suppliers want to push the $4 mark this week, or let it sit here. Prices at retail are climbing faster than the futures right now, imo.