Osage Exploration and Development Inc (OEDVQ)

[swanlinbar]

What is your longer term prediction for when Oil Price starts to rise for multi-month period.

Am hoping this long term uptrend will begin in 2H2015.

/uploads/7638/files/MSCrudeOilReport12-5-14.pdf
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My thoughts are Saudis will be able to get sufficient enforcement measures to ensure that OPEC quotas are not violated by other OPEC members after 7 more months of pain (i.e. oil prices below $70). With any luck, Saudis may be able to get quotas followed by certain other non-OPEC members feeling the pain, like Russia.

Right now, and in the future, Saudis in no mood to unilaterally cut oil production. Either quotas strictly enforced (with penalties) and verifiable or I doubt Saudis will participate, and free market oil pricing shall reign.

Saudis in no hurry right now, OPEC and non-OPEC producers need to feel much more pain to get in the mood for verifiable, enforced quotas. But any rational producer/country would rather fetch > $80 for their oil and deliver 95% of current production than fetch only $60 for 100% of their current production. After all, current production is 92 Million BOPD versus current demand on 91 Million BOPD. That's a surplus of only 1 Million BOPD (about 1% production cut). Eventually, even OPEC past quota violators will figure out the math..., and agree to quotas.

Doing the math...
$80 * 95% (= $76) versus $60 * 100% (= $60)
26.7% more revenue if and when they do the math..., and agree to enforced quotas.

In the meantime, if Venezuela, Nigeria and/or other major producer slips into political overthrow/chaos from these low oil prices, then that lost production alone will cause a 1 Million BOPD fall in oil supply. Also in the meantime, Saudi geopolitical enemies Iran and ISIS hurt more than other oil producers (given sanctions and higher operating costs respectively).

So which comes first, the chaos or the math...from the s i board!