(OilJobsND) – It won’t be long now, until the U.S. Shale Oil Industry will bankrupt Saudi Arabia, and claim victory against OPEC. The war isn’t over yet, but America has already won, it’s just a waiting game now.

On Friday, December 18th 2015, President Barack Obama officially signed off on ending the 40 year ban on the export of crude oil. President Obama basically signed the death certificate of OPEC. By passing this new law, the US Shale Oil Industry will crush OPEC in the long-term.

For years now Saudi Arabia has been a major powerhouse in the oil and gas industry. When you think Saudi Arabia, you think of oil. Most people assume OPEC is the one calling the shots and setting the oil prices, it’s not, it’s Saudi Arabia and it’s been them this whole time. Why do you think the Bush Administration was in bed with them?

For the last few decades Saudi Arabia has printed money faster than they can pump oil, and they pump a tremendous amount of oil. When the markets swung up and down, it was due to the Saudi’s actions. Saudi Arabia has been the muscle in the oil industry for the longest time, until US operators cracked the shale oil code.

At the current time, oil accounts for 80% of the Saudi government’s budget revenues, 90% of its export earnings, and 45% of its overall GDP. So far, it’s estimated the oil crash has cost OPEC countries $500 billion a year. Saudi’s crude oil exports rose to 7.364 million barrels per day, from 7.111 million in September.

It won’t be long before Saudi Arabia shoots themselves in the foot and goes broke due to their refusal to decrease oil production. They may have started the oil war, but the US Shale Oil Industry is going to finish it. Saudi has gone from a budget surplus of 12% of GDP in 2012 to a projected deficit of 21.6% or roughly US$150 Billion in 2015. They can only keep their heads above water for so long at this pace. Saudi needs crude at US $106 a barrel to balance its budget, way higher than a once needed $69 a barrel back in 2010.

What the US operators need to do to bury OPEC 6 feet under the ground is ramp up production to further flood the market and drive the price of oil down. This could be done very quickly. And it just may happen now that we’ve all of a sudden discovered that there is a huge market for the oil we have here. Before the ban was lifted, everybody said it would do us no good because there was simply no market for the light sweet crude. Well, game changing news was announced just the other day about a huge deal being reached to start exporting oil right away. Texas is going to begin exporting mass amounts of oil within the next couple weeks. This is the news we’ve all been wondering about. Will they buy if we open up exports? Yes is the answer, and it took a matter of days for the first deal to be done. In our next post we will discuss the details of the coming exports.

If the call came in to open up the spigot now, Bakken oil production could be boosted up to 2 million barrels a day within a matter of hours, all they have to do is send out the lease operators (pumpers) and opening up the wells bringing production up over an extra million barrels a day. The production numbers we are looking at in North Dakota are holding steady with a low amount of rigs. If one were to bring 150 more rigs out, it could get mighty interesting. When we talk about upping the rig counts in North Dakota, one should not be surprised to see some new, major oilfield companies coming to the state and staking their claim in the Bakken.

Since the price of oil started sliding down, most of the new wells are either being capped, or choked way back. Why would an oil company pump the wells out for a huge loss to store the oil somewhere else? Where’s the cheapest place to store oil you might wonder? Right where it is in the ground.  The oil isn’t going anywhere, it can sit and wait longer than the Saudi’s can. The game is Chess, and OPEC has just been put in check mate.

When you read the mainstream media, they talk about what number is needed for break-even numbers when drilling for oil. The main stream media has been wrong all along. The numbers they report are numbers that consist of unproven oil grounds. The thing is, in North Dakota and Texas, the operators have already pinpointed the sweet spots of the oil plays. They know where to drill to squeeze out the greatest amount of oil at the best price. The true break even numbers haven’t even been reported yet. Let’s just say the operators are still making money even with oil in the $30 range, and there’s still wiggle room. I’ve said it all along, and I’ll say it again, there’s more oil in North Dakota than we know what to do with. All said and done the Bakken will go over 100,000 wells, actually well over that number. Right now, we’ve barely got the patch percolating at the upper 13k current well count. As the oilfield companies perfect their drilling strategies, the number of recoverable barrels of oil just keeps going up.

Saudi Arabia and OPEC will eventually fall at the hand of their own weapon, oil. The US has more oil than it knows what to do with at this time. This is just one area we are talking about. The Bakken is just one oil play in the lower 48. Let’s bring Texas into the picture where it’s home to many oil plays that are prime grounds. Speaking of Texas, the Barnett just broke massive news about newly estimated reserves of twice the original numbers. According to a recent U.S. Geological Survey Assessment (USGS), the Barnett shale has estimated mean volumes of 53 trillion cubic feet (TCF) of shale natural gas, 172 million barrels of shale oil and 176 million barrels of natural gas liquids. And that folks, is just one of the several oil plays in Texas. Let’s not forget the Eagle Ford in south Texas or the Permian Basin and what’s happening there.

We will not be controlled by OPEC anymore. We (US) will be the dominant force in the oil and gas industry, it’s only a matter of time. Our economy is much more diverse as opposed to Saudi Arabia. Their economy relies on oil. We do not. Who do you think will last longer? Sit tight, and watch the events unfold. America is the new powerhouse in the oil and gas industry, thanks to the shale oil revolution.

The sooner the price wars are over the better. When Saudi and OPEC wave their white flags, the markets will steady, and the prices will rise. We will go back to an all out wild west oil boom across America. It’s not a matter of if at this point, it’s a matter of when.

Soon after the deal was reached to lift the ban, company stock in a few major operators have steadily been climbing. As of late, the dollar is falling. When the dollar falls, oil price goes up. Some said the oil patch would stay stagnant throughout 2016, but with this late news about oil exports beginning right away it looks to be the opposite. We will pray for all involved in the oil and gas industry that the future plays out in their favor. The timing of all this in the last few days is amazing. As we have seen in the past, things can happen very fast in the oil and gas industry. Let’s get the people back to work as soon as we can.

Correct me if im wrong. This fracking activity is environmentally unfriendly?

I don't think that is accurate. Regardless of the reservoir type/properties (shale or not), you would still need to consider the method of crude evacuation. (Subsea/wellhead platform in either shallow/deep water)

One of the enablers for deep water developments, subsea is here to stay.

If the reservoir is big, there's a need of multiple "channels" to transport the liquids to surface. So big footprint on the surface is still there even though one multiple drilling is made on one hole.

For an analogy, look at the size of the monsoon drains that we have plenty  in our rain-drenched country. Compare those with the drains in dry countries.

I think your friend is confused. What shale oil has been doing has been done by offshore oil development since the 1970s. Horizontals? Pad Drilling (That's the same as drilling from one drill centre in offshore). Why would you want to do fracking offshore as the cost would be so much higher than on-shore and the UTC would be in the hundreds of dollars per barrel. We have to remember that fracking shale oil is only economical due to high oil price and for the ability to drill well one after another (thus on-shore). Shale oil wells have one characteristics that is unique, the well goes into decline almost from day 1 thus the need to drill more and more wells to maintain production. A shale oil well declines at an average rate of 50% per year so by 6 months or a year, that well will die.

It was not thought of before because previously it was expensive as compared to the conventional drilling. Now if you look at history, people always drill vertical wells when the drill onshore. It just does not make economic sense at the time to drill horizontals on-shore. Offshore wise, people drill highly deviated/horizontals wels or multilaterals because it does not make any sense to drill verticals from a single platform. So what you are seeing now is onshore activities that uses the technology from offshore. As for fracking, you frack because the permeability of the rocks are non-existent. You are basically creating the permeability for the rocks by injecting at high pressure the fracking fluids. Now unless it is economical to do that offshore, then we will see it happening. It all boils down to UTC, Saudi Arabia can produce their oil at a UTC of 2 dollars. If they want you to shit down your operation, they will let the oil price to come down to 10 bucks. That is what they are doing now. That is why you keep hearing OPEC saying that they want high cost producers to get a reality check.

KUALA LUMPUR:  Crude West Texas Intermediate (WTI) continued a ruthless downward spiral amid extended its selloff since the start of the new year, knocking prices down another US$1.75 to close at US$31.41 a barrel on the New York Mercantile Exchange on Monday.

Oil remains in the red territory in early electronic Asia trading on Tuesday.

Sentiment was decisively frail, with WTI suffering significant losses for six consecutive day, as turmoil in China's stock market in the wake of renewed signs of a dramatic slowdown in the world's second-largest economy, sent oil investors running for cover.

Growing inventory glut added to the downbeat mood.

Based on the daily chart, WTI had slipped below the ebb of the previous bearish cycle of RM32.40 to reach a low of US$30.88 during intra-day session on Nymex on Monday, the worst since December 2003, thus triggering a major breakdown.

Theoretically, crude oil prices are in great danger of suffering more losses on bearish extended-mode going forward.

The next probable downside to look for would be the US$25-US$25.20 band and from what we could see on the historical chart, crude oil prices do enjoyed some degrees of support at this level in the past.

If history is a reliable and trustworthy guidance, investors can expect the bears to receive some cushions at the same place again this time round.

Elsewhere, the daily slow-stochastic momentum index was negative, with the oscillator per cent K and the oscillator per cent D on bearish extended-mode despite reaching the bottom.

Also not looking good, the 14-day relative strength index fell to a reading of 18 and it showed no sign of changing direction just yet.

In addition, the daily moving average convergence/divergence histogram expanded downward against the daily signal line to keep the sell call.

Technically, indicators are weak, implying crude oil prices are likely to stay under pressure and should there a relief rebound, it is not sustainable, unless there is an apparent change in the underlying sentiment.

Initial support is envisaged at the US$30 psychological level.

To the upside, WTI will now encounter stiff resistance at the recent breakdown point of US$32.40, and face strong challenges at the US$35.40-US$35.47 range in the immediate term.