My management team saw the writing on the wall for the industry last summer in terms of massive underinvestment. Pricing is going to keep rising - its a simply supply and demand issue and when you take billions and billions of capital off of the table over the past half decade you are going to run into problems.
Add to the fact that our demand is expected to reach 100 mmbopd by the end of 2021 (back to almost precovid) levels without jet fuel demand really coming back, we are going to see supply increasing as well. All of this storage draw down over the past couple of months is scaring traders.
Now, the ESG movement and shareholder paradigm shift (give me $ back rather than growing our reserves), is going to put a great amount of pressure on the mid caps and majors. This is going to leave the privates, the small publics, and OPEC (state owned) producers left to fill the void. OPEC is certainly going to win overall from this whole movement and frankly their carbon footprints are quite large compared to other producers. Ironically speaking, the ESG and climate minded investors are creating an environment that is absolutely going to be more harmful than when they first pushed for this.
In summary, we are absolutely headed for a supply side issue on the oil and natural gas side globally which is going to create a huge number of issues including but not limited to increased costs of transportation, costs in consumer goods all while being at the detriment of the climate.
My two cents anyway.
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