Start of good times for the industry? Giddy up!
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Russia and OPEC will cut production, but only after increasing their production levels ahead of the "cuts". The result will be a zero net reduction. It's only the appearance of a cut. Same ole same old. The cheating will never stop and the price of oil will not go over $57 for years.
Get ready for a brief climb to the low 50s followed by a long stint in Hugh 30s or low 40s.
Meanwhile glad to see Chevron, esp ETC and PRC, is hiring from the outside to replace the "deadwood" aka non managers.
I agree with all who foresee crude prices languishing below $75/bbl. Too many forces are at work to see it, otherwise. U.S. domestic production is likely to be a prime catalyst for continued lower prices, and based upon Trump's avowed pledge to raise domestic production,... the dye is cast. Personally, I see Mr. Trump's plan, while perhaps detrimental to Big Oil's bottom line, as a shot of adrenaline to the nation's economy (in the long run, and as further impetus to manufacturing growth, jobs, etc.), as well as a means of assuring continued disarray within OPEC (in effect,... lower crude prices become a 'weapon' against Russia and Iran),... the Saudis might want to think about "retiring" to more, shall we say,... hospitable climes (their "peeps" will likely rebel, when the gravy train rolls to a stop). Think of it, this way: Chevron, and every other major, who's had to trim some fat (though, much remains, to be sure), may actually have to give up all the touchy-feely programs they've become mired in. The LBGT crowd will have to mince off, somewhere else, to HR departments, elsewhere. We will all be better off, without them. Looks like a win, win, WIN!
OPEC = bunch of state owned repressive governments who can turn off the taps but are sh-- scared in the main of coup d'etat, ISIS etc. They need huge budgets to placate the pleas. RoW = private enterprise. No contest. Oil WILL go down when when shale comes back. Production needed a 2mill to 3 mill cut p/d to see sustained price.
OilPro on Nov 29 correctly predicted Opec move and said most likely outcome would be short term rise in prices which would stimulate further glut resulting in further downcycling of prices. I think oil is in for hard times. So does Warren Buffett.
OPEC members are not who respect any agreements. It was many times members broke deals. We need time to see something more than just words.
Moreover, Russia already rejected OPEC recommendations to cut Russian production.
Iran is going to increase it.
China economy demonstrates signs of downturn.
So, price can go even down again.
Let's see couple month.
Oil is plenty around the world, and even more plenty here in the US. Once the next administration opens up more federal lands to exploration and production, the world oil glut will increase. That means oil prices will remain low for a long time to come. As soon as one region in the world declares production cuts, another region will increase production. This see saw will stabilize oil prices, but don't expect to see $70 oil for a long time. Technology improvements will continue and lead to lower costs to produce oil and gas. And that will contribute to more oil on the market, hence keeping oil at a sub $70 price.
What are the chances that this cut in production will get filled by US shale producers? They haven't gone away. Have they?
It's a 6 months deal, which can be extended but then uncertainty will plague the market again until it is renewed.
ID: @KDVB0ip-nrx, I think this time it may be different. Previously, Saudis were reneging. Now they want the cut badly. They got an agreement. But then who knows!
Nope...3rd time an "agreement" has been reached. Same result. Short hike followed by decline.