Oil Price /Stock PriceA lot of speculation regarding the price of Oil . Currently a small surplus in production ,however given that cash flow has been decimated ,how long will that surplus last and when will it turn to a shortfall? In canada somewhere in the vicinity of $30Billion has been cut from essentially drilling budgets, it is no different worldwide , a cut of $50.00 in the price leaves less than half of the cash flow available to drill with as well,equity infusions by the way of stock issuance has dried up .
Consumers are enjoying low prices at the pumps,however I do not see that lasting very long . With very little drilling to offset depletion the industry will be hard pressed to supply the market for Oil a year from now. Depletion of 6% on the base of 90million BBL/day amounts to 5.4 million BBL/D that needs to come on production during the next 12 months ,given that budgets have or will be decimated where will that kind of production come from?
For those that have the patience and the cash now is the time to start to accumulate .