RE:RE:RE:RE:RE:RE:RE:RE:Refrac, a game changer by all accounts.Frank the world could be consuming 200 million bpd and XOM producing their normal 4 million bpd but if supply is only 199 million bpd then the price will go up.
Right now there is more supply coming on line than the demand growth. If Venezuela ever came back online then the surge in supply growth would crash the oil price.
Anyway, trying to predict future oil prices is too difficult for me because many factors can affect the outcome. The only thing that producers have some control over is their breakeven costs.
If I were an XOM I'd be looking to acquire reserves at a discount rather than explore for them. John D Rockefeller drove prices down in order to drive his competition out of business. He'd buy up the bankrupt companies at a steep discount. He consolidated so many American oil producers under his Standard Oil brand that he pretty much owned the American oil infustry until they broke up Standard Oil. Exxon was Standard Oil of New Jersey, Mobil was Standard Oil of NY, Chevron was Standard Oil of California etc.
I'm not saying that XOM is behind the price drop but it wouldn't surprise me. So what if they don't make as much money in the short term if they can pick up reserves inexpensively from distressed companies to later make a pile of cash when prices go back up.
Anyway, for me, it's something that I always keep in mind. If XOM is behind this, it implies that they have some control, at least, over the oil price. If that's true then my bet is that we'll see further oil price decresses along with the sp of many oil producers.