Quote:
Originally Posted by heep223
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.
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.
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At least part of the "depression" is that people are hearing from their employers that they're preparing for years of pricing at these levels. So even when you present a case for growth in prices due to declining production despite increased demand, its completely the contrarian position at this point.