Nick Exarhos indicates that the decline in U.S. oil production hasn't come about with the speed or magnitude most experts were expecting... But in the details of production data, he finds a dynamic that could support higher crude prices next year. http://finance.yahoo.com/news/cibc-crude-glut-might-cured-152552868.html
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That's what is known in the financial world as a pump piece. It's an article that is intended to move the price of a security upward a bit so someone can make money on an option. Every time a stock or commodity drops a lot in a short period of time, someone out there buys call options or opens a long position, and then publishes an article saying the price is going to increase. The article is usually enough to move the value a few basis points, so they can sell and make money on the difference. When a security or commodity is down, they do the opposite. That's called a dump piece.
Whatever makes feel good and let's you sleep well at night. Tell yourself or think what you want, the bottom line is when companies lose money then money is lost they don't get it back in a year. Lower for longer means it could be this way for up to 5 or 3 or 26 years know one knows. Shit will happen and there will be more people let go, get use it!
Predicting L48 production for 2016 is not speculation, it can be done. Demand / Supply balance can also be predicted within a reasonable range of uncertainty. What can't be predicted is the unexpected - just as Libya offline balanced the market before the fall the unexpected will balance the market in 2016. Cateris Paribus lower for longer ... in reality it's most likely not going to be that bad.
A decrease in non conventional production will be met immediately with an increase in conventional production.
E&P Independents have been prioritizing IP over uktimate recovery leading to more aggressive decline rates for 2015 in comparison to 2014. Forecasts of 500,000-bbld decline for first half 2016 from the L48 do not include this factor. The article is good ...
Everyone has a speculation about prices going back up. Drop it. Deal with today.
WTI is down 6% today to under $38 today and you are prediction support for higher crude oil prices?