RE:Target 2.5-3$It is worth watching drilling activity as it is a necessary step 1 to increased production in the USA. BUT, also keep in mind how low and for how long drilling had to crash before we saw a significant decline is production and even longer before we saw a decline in domestic inventory. Also watch for exports of oil as % domestic production in USA. If exports start growing rapidly, I take that as a bearish early warning data point. When the USA is a net exporter and growing, I see either excess domestic production or weak domestic demand, take your pick, but the result will be higher USA inventory and lower domestic prices. We are nowhere near that trigger. Maybe next year.
ManitobaCanuck wrote: Fingers crossed . I expect another double from here to 2.5- 3$ if Oil stays above 85$ .
Was seeing on general forums .People are still underinvested in Oil . Opec production is in decline due to less investments ,years of underinvestment .
I dont think any of these OPEC countries except low cost producers would invest in oil production increase . Possibly sustained Oil above 100$ for 1-2 years might see new investments on Oil/Gas which is seen as a sunset industry by many.
For example look at used car markets , Lol used cars are 40% above market price for past 14 months .
I sold my used car for more than I bought it 2 years back and still markets are tight . Supply chain issues persist . Similarly if they start drilling , where do they get chips/equipment for new rigs.