RE:KelvinGood afternoon CountryBoy69, I was out picking a pile of mangoes this morning and also got two big date bunches from date palms. Got lots of work to do processing all of this bounty.
Yes bte, On Friday I looked at Brent oil price from its low in 2021 of around $45 during the pandemic to now. It spiked in the spring of 2022 at around $100 just after the Russian invasion of the Ukraine. So I reckoned that worst case for demand destruction is about $45. Worst case for supply destruction is about $100.
There seems not to be much of a downside risk to demand destruction and even if there were another pandemic like event it is unlikely for oil prices to drop below $45. My own tracking is showing a steady increase in demand. But my tracking is crude. I am in the process of learning linear regression to better quantify the trends. I think that some spread sheet features will do linear regressions which I haven't checked out yet.
Now, Biden et all need to keep a lid on the oil price in order to control inflation and interest rates If they let it rise too high then inflation increases too much. So I imagine that the big push is on to increase domestic supply and it will intensify especially if we get Iran shutting down the Straits of Hormuz or something.
My oil patch network (I worked in exploration) tell me that work is picking up all over despite what Baker Hughes reports in the North American rig count and demand is picking up everywhere despite what people report about China.
This board is pretty miopic really. China, China, China and NA rig count. Not much about deepwater globally, Argentina's massive shale oil and gas reserves etc. Plus West Africa from Namibia to Morrocco is supposed to be loaded with all kinds of turbidite fan structures of the kinds found offshore Guyana and Suriname which used to be connected to Africa about 200 million years ago on the super continent called Pangea.
So I reckon that oil price will stay in a narrow range for quite a long time. If there's long term predictability in oil price then it allows producers to better plan and deploy resources for capex. Not to say that there isn't a lot of regulatory risks from the twitty twonks in Washington and Ottawa. I refer to them as farty pants and twinkle toes. Some of the posters who I have ignored remind me of those two.