Drilling Deep

Here are a couple of short, but informative reads on oil and gas. The first is from the Financial Times' Alphaville Blog and explores whether Europe can replicate the shale boom experienced in the United States.  Short answer:  yes, but Europe is years behind the US.  Here is an interesting fact that shows how far the US leads the rest of the world in drilling technology:

Citing Baker Hughes, Maugeri notes that more than half of the world’s drilling rigs are employed in the United States. Ninety percent of them are equipped to drill horizontal wells, and almost all oil and gas wells in the United States are now fractured to stimulate production. In the rest of the world, by contrast, fracturing is used on fewer than one well in 10.

The second post is from Calculated Risk, and it notes the shrinking spread between the West Texas Intermediate (WTI) crude and Brent crude.  The post notes that at one point a barrel of Brent crude was 25% higher than a barrel of WTI crude, and the spread is now only 7%.  A big part of this drop is improved pipelines and other transportation means that are moving oil from the middle of the United States to demand centers and refineries on the coasts.  The domestic oil lowers demand for higher priced foreign imports, leading to the drop in Brent crude prices
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