Oh how the trolls have come out of the woodwork conjuring my name with oil price dropping the past month.
http://forumserver.twoplustwo.com/11...lling-1482058/
Posters like Row Coach force themselves to believe this dip is a sign of a long term glut and the return of glory days of 3-4% growth. Mainly because they have so much invested in trolling the issue, there's no turning back now.
The problem is that lower oil prices crush investment in unconventional production. It's this enormously expensive, unsustainable crap-grade production here in the U.S. which is the only thing that has maintained lukewarm global total liquids growth the past 9 years, since conventional production peaked. When those companies start going belly up (and it's already beginning), you'll see the price shoot back up, and likely beyond.
The Saudis allegedly flooding the market for a few weeks (to punish Russia and Iran), along with reduced global demand are NOT signs that all is well. Quite the opposite, as the IMF and World Bank's downward revision of global growth forecasts confirm.
But just like in 2008, when oil price dipped over $100 in 2008, and shot right back up... these prices, barring recession, will return to their $100-110 ceiling.
ITT, I will await any single poster here who can:
- show how shale production can continue to increase, exponentially, and offset conventional depletion despite a 1) 40-80% annual decline rate for the average fracked well, and 2) the sudden trickling exodus of foreign investment in U.S. shale plays.
or
- show what countries are ready to ramp up production in order to offset decline elsewhere and still meet the planet's 91.4 million barrel per day appetite (and growing)
or
- whatever alternate narrative you care to present that shows how global growth can return to "normal" when the oil majors have all declared they need global oil price closer to $125-150...
Let's get it on, Row Coach... Please do tell the forum how
"Maybe not everyone can afford $100 oil or $200 oil or $300 oil but some people can," and do include how the .1% will be able to support the entire global economy with their demand.
