oil prices

As the coronavirus pandemic hammers oil prices, the number of "orphaned" or abandoned oil wells could grow. A group wants to enlist newly unemployed oilfield workers in addressing the problem.

 


Cooper McKim


The sun is beating down on a nearly empty gravel plot. Just a few weeks ago, trailers owned by oil field and pipeline workers lined this man camp.

A 5-day look at WTI pricing
Market Watch

On Monday, domestic oil prices dropped more than 200 percent, settling at -$14.05 by day's end; the West Texas Intermediate (WTI) crude oil price benchmark momentarily hit -$40.32. This marks the first time oil prices have ever dropped into the negatives.

FY 2019-2020 Biennium General Fund and Budget Reserve Account Revenue Forecast Comparison (M = millions).
CREG

Following a bout of weak oil prices, state revenue from the industry is expected to go down dramatically, according to a Consensus Revenue Estimating Group (CREG) report. It predicts the state will collect about $67 million less this biennium than forecast in October of last year. The overall contribution of severance taxes, investment income and royalties are still forecast to be higher than in the last biennium.

OPEC and other foreign oil producers said Friday they’re scaling back production by about 1.2 million barrels a day. That could be good news for oil producers in the Mountain West but perhaps not so good for consumers.

Wyoming State Geological Survey

The North American benchmark price of oil dropped this week to its lowest since 2017. It pulled down share prices of major producing companies with it - many that operate here in Wyoming. Wyoming Public Radio's Cooper McKim speaks with Refinitiv market specialist Carl Larry on what the drop means and how it happened.

WTI Crude (Jan'19) (@CL.1:New York Mercantile Exchange)
CNBC

Since early October, the U.S. benchmark for oil prices has been down around 32 percent. Benchmark prices are set by a grade of crude oil called West Texas Intermediate, which hit its lowest price in over a year at just above $50.

Stephanie Joyce

A surge in oil prices has led to the best revenue report for Wyoming in a few years. The Consensus Revenue Estimating Group (CREG) is calling for Wyoming's general fund to see an increase of roughly $212 million in the next fiscal year and other sources of revenue are also expected to increase.

Stephanie Joyce / Wyoming Public Media

With a record increase in U.S. crude stockpiles this week as well as increased production from OPEC, it is looking more and more unlikely oil prices will rebound in the near future.

Oil opened November back below $50 a barrel, after spending much of October above that threshold, and analysts are increasingly forecasting the coming year will not bring much improvement.

Stephanie Joyce

The price of oil has climbed up from its winter low, but once again fell below $50 a barrel on Friday.

Dan Boyce

Bruce Friest asks himself if he would have done it again, knowing what he knows now – move from Minnesota to start a small trucking company during the peak of North Dakota’s oil boom.

“I don’t know if I would, I really don’t,” he said. “It was hard on me, it was hard on my kids, I was married and my marriage fell apart.”

A couple of years ago, his trucks were sub-contracted to haul oil by a larger trucking company. Then that company, Montana Midwest, went bankrupt, still owing Friest more than $200,000.

North Dakotans Reel From Low Oil And Ag Prices

Feb 5, 2016
EMILY GUERIN / INSIDE ENERGY

On the surface, North Dakota doesn’t seem like a state full of risk-takers. It’s conservative, faith and family-oriented. Yet many people here are constantly making big bets on how much money they’re going to make next year, or whether they’re going to have a job in a  few months.

In the budget deal announced Tuesday night, Congress agreed to lift the decades-old crude export ban.

The export ban dates back to the 1970s, when there were fears about oil shortages, but in the last few years, producers in North Dakota, the Rockies and Texas have been pumping huge amounts of oil. That, in turn, has driven down prices.

Although few expect to see significant exports in the short-term, lifting the ban could help reverse that price trend—and keep some struggling companies in business.  

Stephanie Joyce / Wyoming Public Media

Oil prices hit new lows Monday, after the news Friday that OPEC would not cut production. But several proposals for oil and gas projects in Wyoming are moving forward despite the price slump.

The Bureau of Land Management is beginning to assess the environmental impacts of a proposed 1500 well project that would straddle the border between Converse and Campbell counties. EOG Resources is behind the Greater Crossbow project. If it were to move forward, the company would drill the wells over the course of a decade—but that’s a ways off. 

Geof Wilson / Flickr

The likelihood of rising oil prices dimmed after OPEC declined to put a cap on production at its latest meeting in Vienna on Friday.

 

Oil prices fell below $40 a barrel on the news that OPEC couldn’t come to an agreement on a production cap. Led by Saudi Arabia, the oil cartel has declined to cut production in the last year, even in a market flooded with oil. The strategy is intended to squeeze out higher-cost competitors, like U.S. shale producers. And it appears to be working.

 

Lorne Matalon / Marfa Public Radio

The price of a barrel of U.S. crude oil has plummeted by more than 50 percent since June 2014. U.S. producers claim that they're at a competitive disadvantage because they're restricted to selling their oil domestically at a time when they desperately need new markets to sell their expanding inventories.  

Leigh Paterson / Inside Energy

With oil hovering around $45 a barrel these days, oil workers can go from making a six-figure salary, including overtime, to being unemployed and broke. When business is good, a $60,000 dollar truck, for example, might be a reasonable purchase and maybe even a business expense. But the oil industry isn’t like most businesses. Work can go away overnight.

Despite the recent downturn in prices, oil production in the US has continued to climb.

The Energy Information Administration's most recent figures, from April, show production that month reached 9.7 million barrels a day—the most oil the US has produced since 1971.

Federal Reserve Bank

The "breakeven" price for oil has fallen in step with oil prices, according to new data from the Federal Reserve Bank of Kansas City. The "breakeven" price is when producing oil is no longer profitable for companies. 

The Bank periodically surveys oil and gas companies in seven Western and Midwestern states. When oil prices started to slide, those companies reported an average breakeven price of $79. Now, those same companies report it's down to an average of $62. 

Leigh Paterson / Inside Energy

Over the last few years, Wyoming's African American population has grown faster than in any other state. According to census data, between 2010 and 2013, the number of black residents doubled. In some counties, especially those with a lot of energy development or tourism, that increase was more like 300, 500 or even 800 percent. Other rural Western states, all with unemployment rates well below the national average, are experiencing a similar trend.

Flickr user Geof Wilson

The oil and gas industry pays a ton of money in severance taxes to energy producing states like Colorado, Wyoming and especially North Dakota. When oil prices were high, North Dakota took in about $10.5 million a day. But as prices have fallen, so has revenue. In the midst of this, North Dakota lawmakers have passed a bill to stabilize and lower the state’s oil and gas tax rate.

 

Very few people in the state capitol of Bismarck support the state's current tax system. Representative Al Carlson, the House Majority Leader, put it this way:

 

The super bowl of energy conferences, called CERAWeek, wrapped up in Houston on Friday. Industry executives, analysts, and policy makers were all there to talk about the current state of the industry and where it's headed. Panels and keynote speakers talked about everything from natural gas, to coal, to of course, oil prices.

Leigh Paterson is a Wyoming-based reporter for Inside Energy. That’s a public media collaboration focused on America’s energy issues. She was at the conference all week and joined Wyoming Public Radio's Caroline Ballard to talk all about it.

Leigh Paterson / Inside Energy

With oil prices now at a six year low, oil companies have been idling hundreds of drilling rigs. For the wells that remain active, the key is getting more out of less...which is tricky because when you drill for oil, only around 5 percent of what’s underground is actually recovered. That’s according to the U.S. Energy Information Administration. Inside Energy’s Leigh Paterson reports on how these days - with prices so low -  producers are using technology to chase oil thousands of feet below the earth’s surface. 

Leigh Paterson / Inside Energy

The American landscape is dotted with over 100,000 deep injection wells. They’re a key part of our energy infrastructure. Without them, you probably wouldn't be able to fill up your tank. Because for every barrel of oil that comes out of the ground, salty and sometimes chemically-laced fluid comes up with it. This so-called produced water has to go somewhere - and much of it injected back into the earth. In the first of a 2 part series, Inside Energy’s Leigh Paterson reports on one company’s bid to get in the game.

Stephanie Joyce

A year ago, a petroleum engineering degree seemed like the ticket to a bright and well-paid future. With six-figure starting salaries for a bachelor’s degree and endless optimism about the shale revolution, enrollment climbed rapidly in petroleum engineering programs across the country. But now that the oil price slide has turned to an oil price slump, the luster is wearing off.

When Evan Lowry first enrolled at the University of Wyoming, his plan was to be a chemical engineer, like his dad, but the oil industry was booming and he quickly changed his mind.

INSIDE ENERGY: Meet The Men Who Study Man Camps

Feb 6, 2015
Andrew Cullen

“Man camps,” or temporary worker housing, are a defining characteristic of an oil boom. Development happens so fast, there’s never enough time to build adequate permanent housing. When oil prices come crashing down, the man camps empty out.

Wikimedia Commons

The budgets of oil states are going to be hard hit by the recent slide in oil prices. Measured in dollars, Texas is the clear loser, but in terms of actual on-the-ground impacts, it isn't quite so simple. In the country’s number two oil-producing state, North Dakota, falling prices have barely caused a ripple, while in Alaska (ranked fourth), lawmakers are calling it a “fiscal apocalypse.” In Wyoming (ranked eighth), reaction has been subdued, but that may not last.

Stephanie Joyce

Legislators had lots of questions for oil company representatives at a special seminar convened Monday to discuss the recent oil price slide. Oil prices are down more than 60 percent since June. The State of Wyoming gets roughly 20 percent of its revenue from oil, so prices have been a hot topic in the halls of the Legislature.

Devon Energy representative Aaron Ketter said his company’s best-case scenario has oil prices rising in as little as 6 months. The worst-case scenario is for 24 months. But he cautioned, rising doesn’t mean returning to previous levels. 

Stephanie Joyce / Wyoming Public Radio

 

 

 

Last week, we brought you what falling oil prices mean for North Dakota, in five numbers. This week, we bring you Wyoming’s outlook, again in five numbers.

1) $37.90 per barrel.

Emily Carpeaux for Inside Energy

We’ve been hearing a lot about crashing oil prices lately. Crude oil is selling for $46 barrel today compared to over $90 a year ago. The price drop is great news for consumers and terrible for oil companies. But not all oil companies -- or oil fields -- are created equal. When oil prices drop, size and location matters.

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