World oil production decline ratesJust a reminder of the real decay of world oil production.
https://www.reuters.com/article/oil-production-kemp-idUSL5N11L26U20150915 https://energyfuse.org/the-long-decline-of-the-worlds-largest-oil-fields/ World oil production decay of around 2.4 million barrels per day is very plausible for 2016 and 2017 if not more. Add an increase of 1 million barrels per day consumption each year and supply/demand balance is here. 2016 ends up being a 3.4 million barrel per day deficit and by 2017 it's a possible cumulative 6.8 million barrels per day deficit.
Some fields will come on stream to fill the void. However, we'll use the dirty little secret that oil needs to be at least $65 to bring fields back into play and you can see there might be a supply problem or a rapid increase in oil prices in 2017 and for sure by 2018.
$50 oil or less really doesn't incentivize anyone to increase production.
Can't say I believe oil price will go much higher and I certainly don't believe it will crash either. What I am expecting is that oil will remain substantially higher than last quarter and we are coming to the end of 2Q. MEG shares will increase from here as oil remains high.
All IMO.