RE:RE:RE:RE:RE:Shorts are still a drag and Newalta is at 34% short volume
superalias wrote: But how can you have oil scarcity when the USA is now a big net producer of it thanks to Shale, and they're finding more spots for wells every day? The technology improvements in oil extraction is what got us here today. Now that we're so close to $60 and so many wells/rigs are viable again, we're going to eventually meet supply. The question is just a matter of when, not if.
But even within that you have to figure NAL is undervalued. More activity means more work for them.
1) US still imports slightly more as of last year then they do export; we can wait for the end of year firm statistics to cast judgement on what 2017 truly was. Most of the US refiners are still predominatly run off heavier crude and not tight oil, which the US is flooding the market with. US refiners are mostly not set up to accomodate tight oil. Even the US SPR is mostly heavy sour crude, not tight shale oil.
2) Where do you get they are finding "new wells everyday?" While we are reading about production increases, much of the production came online in the past 2-3 years. Shale wells deplete quick. Perhaps I am bias because I am surrounded by pump jacks, but drillers in the Bakken are extremely cautious and there hasn't been much development since price crash. We "hear" the talk, but I don't see the walking of the walk.
For example, this week the rig count only increased 2 in Permian; which shows that US drillers are focusing only on the cheapest and most profitable costs at these prices. Even though the market probably needs mo oil, the US shale producers are cautious and weary of sending out too many rigs as they could crash prices based on sentiment.
So you're assuming that $60 is a lucrative number for US producers and I believe OTHERWISE. There is no "shale boom" at $50 or $60 and some of the more successful companies can only meet the status quo, none are flourishing at those levels and aside from maybe a couple companies in the Permian, none are booming.
Read about "shale well depletion and decline rates" to get a grasp on shale's reality.