we have to realise this is uncharted territory, no one knows what will happen ~ $50 regarding restarts. Uncertainty spooks the hell out of markets!
I think a week or two of testing $50 and keeping an eye on US rig count will either create a bombshell and kickstart a drop in POO - or settle a lot of nerves and allow the break through above $50. Its just a case of sitting tight, and keeping your fingers crossed.
we will have to wait and see! The fundamentals havnt changed and if sa want to have an ipo of aramco they have already stated they will boost market share they have already increased production from one well with an increase of 250k bopd and they plan to increase more to capitalise on the ipo. Opec will have no freeze i reckon many may even ramp to survive and reduce their deficit
I think one or two rigs may restart above $50, but i read a while ago the vast majority are break even above $55-60 so would need that to restart. (don't have a link sorry, it was months ago). I would say less than $55 is a sustainable level for the Saudis in terms of limiting shale. Maybe even $60.....but what I think is irrelevant, its what the market thinks that counts.
I just think this drop is a natural reaction as a bounce from the ceiling of $50, I think it will probably test it… Read More
Hi Kaimirza, Shale cannot start pumping. Even a big jump in rigs would just slow the decline. Add to that the fact that many will have no access to financing so will have to try and pay down debt first. Nigerian outages may be temporary, but as the oversupply narrow they become more significant.
doesnt really matter as opec seems to be picking up the slack. its only 800k iran is nearly at full steam. shale will start pumping at these prices. still a lot of rebalancing to do. us opens shortly i imagine markets may drop again
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