CPG will weather this? Yes, but just (another divy cut )Johnny 41 wrote...."Look out 6 months and there are more things to push oil up than down. The inventories are going to start to drop once the refining season starts in the late spring."
I don't know what you're smoking, but the opposite is more likely. Today (over the weekend) Malayasia (which almost everybody had forgotten about) came back in to the oil cartel pushing oil down. Russia's comments that the price action for oil Friday was silly didn't help not to mention that it was probably them that floating the trial balloon that the Saudis' were close to a deal to cut production. They have not come this far to give up when they are about to see the benefits of their strategy. The bankruptcies in the US shale will come in the 2ndQ is my guess. Why not sooner? The regional banks in Dallas, Oklahoma etc. did not want to push these oil companies over the limit as this would bring the focus to their balance sheets which are not in good shape & if they go under more job losses etc..
Then we still have all those supermax tankers going in circles around the oceans of the world just waiting for a blip up in prices ($36-37) which may happen according to Struzillo, but you should sell at that point because it will not last. This will force oil down again.
Then we still don't know how much Iran will pump into the market. Surprise! And Don't forget they have some oil in them tankers too.!
Production declines in the US is still too slow & made up by the likes of Malayasia.
Demand which is strong now (relatively speaking) will probably tail off (how much ?) as the US will dips into recession in the 2ndQ/3rdQ. They will be the last do so & the last to get out of it too. Also it is not as simple as flipping a light switch to get oil flowing again. It takes money to do that (& labour) & there isn't the risk capital to do that.
The volatility in oil will be the straw that break some that on any spike up in the oil price will gamble all trying to get even & then a black swan event will drive oil down close to $20 & cause them to give in finally.
Politically in the US during he election process there are no talking points about the economy. Its all about IS & bashing healthcare, each other & not what's ailing the US economy, tax reform etc..
They (US) have no quick plan to increase jobs, wages & with no meaningful wage increases no buying power. People who worked in the oil sector are being laid off & those that are left don't have the money they once had. Even the collectible car market suffered a decline in sales the first time in 5 years. People either didn't show up &/or as some are reporting selling their collectibles to pay their bills.
Even high-end retail (i.e. Saks) according to CNBC are having troubles.
The last straw maybe Alberta getting a handout!
carlos