Thread regarding ConocoPhillips layoffs

A combination of supply > demand + FED talking about tapering and hiking interest rates. 6 years of 0% interest rates inflated the oil bubble. Many EP companies leveraged up to their necks borrowing essentially free credit to drill for expensive frack wells, now that the cheap money is coming to an end with the anticipation of 4 more rate hikes coming this year, oil traders are pricing in a stronger dollar which is driving oil (and all commodities, just look at copper, steel, aluminium... etc) down. It was no coincidence that when the FED talked about tapering in September 2014 was the same time when oil prices dropped. When the FED reverse course, drops interest rates back to 0 and announces QE4, you will see oil and other commodities reach new highs. Most people don't know this, but it's all about the dollar.

The oil producing countries in the middle east might not have been the root cause of the drop but they certainly had an influence in devaluing oil prices.

Natural gas on the other hand, well the good ole domestic drillers hammered that coffin nail on their own.

you don't need any other answers.. the statement below says it all. The incredible greed and stupidity of Harold Hamm and his ilk have brought to this time,

Stop drilling these short life horizontal wells and go back to drilling production that will be slow and steady so that you can weather the dips in the prices and kick out the private equity money

OPEC did not lower the price. OPEC continued to supply to the market and demand determined the price. Do not give OPEC credit for the current situation. North America doubled production in the past 10 years so blame North America if you must blame.

Horizontal domestic drilling is the root cause of the price drop. Contributing to that is the influx of private equity money allowed the "start-up" to drill oil wells with high initial production but lower economic life.

1. Lots and lots of cheap money

2. The false allure of horizontal drilling

3. Drilling wells with shortened economic life leads to increased drilling activity

4. Increased activity leads to service company price increases

5. Increased drilling prices leads to lower returns

6. The complete lack of geological evaluation from well to well

Shale plays and horizontal drilling caused this. OPEC saw the US production increased and decided to put us in our place but dropping the price to levels that they thought we couldnt survive. What they didn't take into consideration was that people were drilling under screwed up economics because their funding was not internally generated but dolled out by private equity. Give Aubry another billion and see if he spends it wisely and conservatively or if he goes out and spends it as fast as he can.

Stop drilling these short life horizontal wells and go back to drilling production that will be slow and steady so that you can weather the dips in the prices and kick out the private equity money