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Originally Posted by burn_this_city
I don't buy into any forecast that puts this rut longer than 3-5 years. The replacement cost for a barrel is just too high now and demand growth hasn't stagnated significantly. I also don't buy into the bull#### about how producers have been able to reduce costs by 30-40% permanently. 30+% of production is uneconomical at these prices, there's no way this is a 20 year trough unless Saudi discovers two more Ghawars.
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It's tough to find current info on Ghawar, but my personal conspiracy theory (maybe others have predicted this but I haven't seen it) is that the Saudi's are driving the price down enabling them to scoop up cheap reserves from failing companies in other parts of the world to replace the inevitability of Ghawar declining dramatically. Then, once complete, they announce Ghawar can't maintain it's 5MMbbl/day pace. We instantly go from oil surplus to deficit, the price of oil sky rockets, and they're set. I haven't been able to find evidence of this yet though
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