Wow the depression is strong here. I guess to be expected.
With OPEC operating at full capacity (first time ever I believe), the US is the new swing producer. The market hasn't priced this in yet as US production will soon drop off a cliff. Could drop more than 1M, and Canadian supply is going to drop, and Russian supply is going to drop, and Chinese supply is going to drop. That will rebalance the market through 2016. Price will go back to equilibrium levels, which are debatable, but certainly at least $45-$50.
Then if something, anything happens with OPEC production, price is going to spike through the roof.
I know it's tough to see right now but things are going to get better.
Quote:
Originally Posted by peter12
It looks like they have been able to scale even with a massive decrease in rig count.
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No, there's a lag between production and drilling activity. There's nothing to replace the huge declines, and production will follow activity like a magnet as per the historical chart.