RE:RE:RE:RE:RE:YESTERDAY WAS A LOST, TIME FOR OBE TO MAKE IT UP TODAYThat maybe what your friend is seeing.
My friends saw a lot that equipment get sold (or foreclosed) for scrap over the last 2 years, and the operators get jobs elsewhere.
All the unused equipement from 2019 and all their crews, have not been standing on the sidlines waiting to go back to work. Must of that stuff has been sold off, and the crews are doing other things.
Most of those oil firms don't have bank lines they can use for credit. They are still stuck paying down debt, and using internal cash flow to support this year's Capex. Many of which are still stuck with oil priced they hedged this time last year. Between now and the end of May, they will be getting last years prices - spot back then was in the $50's and $60's, and hedge prices were lower.
They will have more cash for drilling and completions as the year goes by, but nothing like the past.
These horizontal multip frac wells decline fast. For every one you put on line today, you have to put on 2 or 3 next year to maintain production or show growth. They could do that when banks were lending freely.
They can't do that now.
Yes new wells will get drilled. Will the net change to US production be much different between now and this time next year? No. A few hundred thousand extra BOE per day if they are lucky.
Russia can't even maintain its own production.............lol
OPEC is producing about 625,000 boe less than its monthly 400,000k increase allow. Thats because much of OPEC is maxed out. Its unclear how that will work out - OPEC is a quota limiting agreement. If one Country can't meet its quota, its not as if another can step in and fill the gap. That sort of thing could break OPEC, so don't expect it to happen anytime soon.
There is an energy crisis presently underway. Bitcoin is doubling its energy consumption about every 12 months. Banks are being restricted in their ability to lend to none ESG companies. Biden and Trudeau are making oil production difficult.
Do I expect current oil prices to change all that? NO.
Oil prices inelastic. Demand in Asia is increasing as consumer wealth increases.
$100 dollar oil is just a matter of time now. Will it change production much - I don't think it will make a difference.
The biggest risk I see is Biden prohibiting US oil exports, or worse yet, refined products. Canada's oil goes out through the US. IF US companies can't export refined products, then they won't need all of Canada's oil. That would be a very bad idea for the US, and the US oil and refinery business - but who knows is Biden is stupid enough to make a decision like that.
Indonesia recently banned export of its coal - the ban didn't last because of pressure from foreign Countries.
Mexico has said it will ban export of its oil (so it has enough for its own refineries and consumers)
My guess is even if the US did implement an oil and refined products export ban, it would be mostly the Canadian oil sands that would be affected, leaving others like OBE largely unaffected given demand for their products.