RE:RE:The Chess Game ContinuesObscure1 wrote: Fantome: I'm a big fan of your writing as you freely share your considerable intelligence and experience.
However, I respectfully disagree with your thought process in regards to the direction of oil prices in the short to medium term other than the liklihood of Wall St. playing its typical games.
While the demand for oil and gas continues to rise, where is the supply going to come from?
Russia has maxed out its production and in the big picture, it doesn't really matter whether it ships to China or Europe. Migraine has pointed out that oil tanker owners are avoiding Russian oil due to a fear of sanctions. Until Russia extricates itself from the dog house or magically produces new pipelines to China, Russian supply is likely heading in reverse.
OPEC has very little if any potential to increase capacity.
American shale is biding its time because Biden and his puppet masters have made investing in oil too risky. Even with oil and gas at presidency destroying price levels, Biden continues to halt land leases and instead wants to blame gready American oil companies. Until America votes in the midterms and perhaps not even then, America isn't coming to the rescue.
America has guaranteed that Canada oil doesn't have any additional egress to the States. Trudeau has managed to screw up TMX as much as humanly possible along with doing everything in his power to subvert the oil industry in Canada. Canadian oil producers are happy to fill their pockets while focusing on reducing their costs and risk so Canada isn't coming to the rescue even though it could.
Venezuela oil production continues to be thwarted by America and is unlikely to change.
Mexico has announced its intention to halt exports of oil.
Offshore oil projects are years away from providing meaningful supply.
SU's 29 years of proven low cost, low risk supply with plenty of demand and existing egress paints a pretty rosy picture for SU.
The street will eventually get over itself and stop punishing SU if the company stops shooting itself in the foot.
Thanks for your kind words. I for one enjoy reading your posts.
I hope for your sake and other SU longs that you are right.
For now world oil demand is at about the same level that it was four years ago and EIA is predicting a surplus of oil production over demand requirements for the next two years. If they are right then the price of oil will fall. Further as I have posted in the past, continued oil prices above the marginal cost of production results in the price moving towards the marginal cost of production which right now is somewhere in the 70s.
Guess time will tell which of us is right about this.