Cyclic Structure.Market indicators point to a structural cycle that is very positive at this point. US shale is still FCF focused and it takes more time and money to realise the same production as last year. Shale production is not falling but the rate of growth is. There is growing doubt that the high costs of labour, services and materials will allow profitable drilling of remaining Tier 2 + 3 acreages in all but the Permian.
2H/23 and 2024 will experience less activity and growth of supply tightness. Demand, especially industrial demand growth will play havoc with a financial oil market skewed to the high inflation and interest narrative and the discounted physical market fundamentals.
The rollover of shares bought at low $.90s must be complete and shareholders' ACB must soon be $1.00 indicating either a rise in share prices or sellers taking losses in a rising price environment.