900% Increase in Oil Production, Gas Below $3, and Oil to Zero?

Crude Oil is once again making moves that could finally break out of it’s 80-120 range. Gas Prices are below 3 dollars a gallon on average in at least a dozen states.

Today's AverageChart Courtesy: Triple AAA

Crude Oil Futures are down more than 21% since July, now hovering around the 80 point mark {past performance is not necessarily indicative of futures results).

Daily Crude Oil Chart(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz

Hedge Fund managers are dramatically predicting Crude Oil prices to Zero, and oil production is up 15% in 2013, now producing 7.4 million barrels a day.

Oil ProductionChart Courtesy: EIA

But the mindblowing chart of oil comes from production in North Dakota. Over the past ten years, the average annual oil production has increased 967% (2003-2013) WHAT?! That can’t be. Here’s a visual look at oil production from “The Legendary State,” as well as an explanation as to why and how via Five Thirty Eight.

“In the mid-2000s, companies in Texas had figured out how to extract natural gas from dense shale rock near Fort Worth. A few enterprising oil men figured the same approach might work in North Dakota’s oil fields, and after a few false starts, they proved correct. Between 2004 and 2008, North Dakota’s oil production doubled. Then it doubled again. And again.”

North Dakota Oil ProductionChart Courtesy: Five Thirty Eight

The more shocking stat is that the EIA predicts that oil production in North Dakota will continue to rise at this rate until 2020, and gradually fall off because this major uptrend in production is unsustainable. But it’s not just North Dakota that’s experiencing an increase in Oil Production, Texas produced 16 million more barrels this past July, compared to the same time the year prior.

Does this mean we’ll see crude prices drop to zero like some are claiming? Or even to 50? Or at least break lower than than the 80-120 range it’s been stuck in North Dakota crude oil production has been exploding since the late 2000’s, which makes us skeptical to believe it’s the cause behind Crude moving from 105 in July to 82 over the past three months.  Crude oil could be dropping because of a major uptrend in the U.S. Dollar, and growing economy, both of these reasons, or none of these reasons.

We won’t try to string together a real reason for the fall, but we will encourage the downward trend to continue. Not because we can fill up at the pump for less, but for the Managed Futures strategies that can capitalize off of shorting energy markets. Something that’s not even an option for some claiming to be “Managed Futures” strategies.

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  1. […] wells not lasting very long. This chart seems to contradict that. Good article on "fracking". 900% Increase in Oil Production, Gas Below $3, and Oil to Zero? | Attain Capital Managed Futures Blo… Great article on the current oil situation. 11 things you should know about the Crude Oil Drop | […]

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Disclaimer
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Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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